2009 (9) TMI 526 - KARNATAKA HIGH COURT

Deduction of Tax at source- The Tribunal had allowed appeals filed by resident assessee in respect of different assessment year holding that the resident assessee were not liable to deduct any part of the payment made by them to non resident suppliers as price (for consideration) for the software which the resident assessees had acquired/ purchased from the non-residents for the purpose of the activities/ business of the resident assessee, thus the payment is not the nature of royaly income thus no deduction is to be made. The Commissioner (Appeals) upheld the order of Assessing officer. Tribunal allow the appeal of assessee. Held that- there was to be a payment to the non-resident and admittedly the payers having not taken any steps or not having invoked the reliving provisions of sub section (2) of section 195 of the Act, such obligation on the resident payers remaining intact and having regard to the limited scope for examination in an appeal u/s 246A(1)(ha) of the Act there was absolutely no way in law, for the tribunal, while exercising its appellate power u/s 250 of the Act and, therefore all orders passed by Tribunal for allowing the appeals of the assessee filed under section 253 of the Act and, therefore order passed by the Tribunal declared illegal and not sustainable.