Law:

Section:

Tax should be deducted at source under section 194H on amount available to agents being difference between air fare fixed by Airlines and price at which agents are enabled to sell tickets Section 194H of the Income-tax Act, 1961 - Deduction of tax at source - Commission or brokerage - Appellant-agents received commission from respondent-airlines for sale of air tickets - Respondents treated difference between air fare fixed and price at which agents were enabled to sell tickets as 'supplementary commission' - Proceedings for recovery of TDS on said commission were initiated against respondents - Appellants got an interim injunction for restraining respondents from recovering any amount as TDS from them - Interim injunction was subsequently vacated - Whether liability for payment of tax arises in terms of statute and perception of appellants could not determine true content of statutory provisions and could not afford a sound basis for Court injuncting person, who may otherwise be liable to deduct tax, from deducting tax on payment made to agents - Held, yes - Whether, therefore, Single Judge was justified in vacating injunction - Held, yes FACTS The appellant-travel agents received commission on sale of air tickets of the respondent-airlines. The respondents treated the difference between the air fare fixed and the amount at which the agents were enabled to sell the tickets to the passengers as 'supplementary commission' paid to agents. The appellants were called upon to pay TDS under section 194H and, accordingly, recovery proceedings were initiated against the respondents for recovery of TDS. Consequently, an interim injunction was sought by the appellants restraining the respondents from recovering any amount by way of deduction of tax at source. Though initially interim order was granted, it was later vacated. On writ appeal : HELD Section 194H is unambiguous. It refers to commission. So long as what is being deducted is tax on commission, it is not only lawful but is obligatory on the person who makes the payment. [Para 6] The injunction sought by the appellants to restrain the airlines from deducting tax was not an injunction that could be granted. The…

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