The Advertising Club and Another vs The Central Board of Direct Taxes and Others

P. Venkatarama Reddi, J.—The relief sought for in this writ petition is similar to the one in W.P. Nos. l5568/94and batch dated 30-11-1995 disposed of by a common judgment. The validity of circular No-681, dt.8-3-94 issued by the Central Board of direct taxes in so far as it requires the deduction of tax at source u/s 194-C of the Income Tax Act in respect of service contracts is being challenged in those writ petitions. The only difference between the present writ petition and the other writ petitions which we disposed of on 30-11-95 is that the present writ petition relates to a contract for advertising whereas in the other batch of writ petitions the contracts pertain to transport of goods. The facts and circumstances set out in the batch of writ petition mutatis mutandis apply to this writ petition as well. Therefore, following our judgment in W.P. No. 15568/94 and batch dt.30-11-95 we dispose of this writ petition with the same directions which we set out herein.

(1) that the petitioners, including the members of the 1st petitioner club who are assesses, should file returns if not already filed, within four weeks from to-day disclosing the amounts received by them in respect of advertisement contracts from one or more entities/authorities or institutions mentioned in Section 194-C of the Act together with the tax due to be paid as per the self-assessment procedure;

(2) those petitioners who are not assessees and who have received payments tin connection with their contracts from the specified entities/authorities or institutions mentioned in Section 194-C of the Act should furnish returns of income within four weeks if the gross payments received by them during the year 1995-96 from out of the advertisement contracts together with the income from other sources exceeds the minimum taxable limit. Even if the gross income does not exceed the minimum taxable limit, the petitioners will furnish the information regarding the payments they have received from the persons/entities aforementioned during the assessment year 1995-96 i.e., during the year ending 31-3-1995; and

(3) if the returns are not filed or the information is not furnished as stipulated above, the Income Tax authorities concerned can take steps according to law calling upon the petitioners including the members of the 1st petitioner Club to file the returns or to furnish information and to make ex parte assessments wherever warranted.

Failure to comply with the above directions by any of the petitioners including the members of the first petitioner Club, shall be deemed to be a violation of the order of this Court and appropriate proceedings under the Contempt of Courts Act can be initiated against them.

The writ petition is disposed of accordingly. No costs.