Assessee Company USIPL appointed by Uber B.V., under an Inter-company service agreement was providing support services viz to act as payment & collection service provider of Uber B.V. for a fixed monthly consideration. It was Uber B.V. who provided lead generation services to driver-partners who were interested in providing transport services to riders (users) through Uber App.
A.O held the assessee company would be a “person responsible for paying” within the meaning of Sec 194C r/w s. 204, and thus was treated as an ‘assessee in default’, ignoring the observations made in the order u/s 143(3), treating the assessee company as being engaged in business of providing marketing and support services to Uber B.V. and not as a transportation service provider, and passed Order u/s 201/201(1A).
On appeal the Tribunal considered the following facts viz:
- a) Role of assessee company is limited to act as a payment and collection service provider of Uber B.V.
- b) The assessee company does not have any agreement with the driver-partner.
- c) As the transportation service is provided by driver-partner to users directly, for which user is making the payment, so it is the user who is the person responsible for paying and nit the assessee.
- d) Also in a situation where user makes direct cash payment to driver-partner the assessee is not even made aware and making them liable for deducting Tax would result in impossibility of performance.
Based on above facts and reasoning it was held that the provisions of section 194C are not applicable and no order could be passed against assessee u/s. 201/201(A). (AY. 2016-17 & 2017-18)