High Court of Delhi · Judgments and reasoned final orders
Commissioner of Income Tax, Delhi-XVII v. Royal Jordanian Airlines
ITA 187/2008 ·
Liability of airlines to deduct TDS under Section 194H on supplementary commission retained by travel agents following Singapore Airlines Ltd. v. CIT (2023) 1 SCC 497; recovery restricted to interest under Section 201(1A) on revenue-neutrality grounds without requiring the airline to prove tax payment by travel agents.
1. FACTS OF THE CASE
The Revenue filed ITA 187/2008 challenging the ITAT order deleting TDS demand under Sections 194H and 201(1)/(1A) against Royal Jordanian Airlines on commission retained by travel agents. Although the tax effect was approximately Rs. 26,00,000/-, the Revenue contended the appeal was maintainable under Clause 3.1(l) of CBDT Circular No. 5/2024 (TDS disputes) and covered on merits by Singapore Airlines Ltd. v. CIT (2023) 1 SCC 497.
2. DISCUSSION BY THE COURT
The Division Bench noted that in Singapore Airlines Ltd. v. CIT (2023) 1 SCC 497 (paras 68–71), the Supreme Court held that while airlines are liable under Section 194H on supplementary commission retained by travel agents, the principal TDS demand should not be recovered due to revenue neutrality (since travel agents are assessed on their income) and penalty is barred under Section 273B, leaving only interest under Section 201(1A) payable. Accepting the assessee's submission that after more than ten years it would be impossible to gather tax records of numerous travel agents, the Court directed that the AO shall only compute and demand interest under Section 201(1A) without inquiring into whether the agents paid tax.
3. JUDICIAL DECISION
Disposing of the appeal in terms of paragraphs 68–71 of Singapore Airlines Ltd. v. CIT (2023) 1 SCC 497, the High Court directed the AO to issue a demand notice solely for applicable interest on the TDS amount (to be deposited by the assessee within two months of receipt) without inquiring into tax payment by the travel agents.
4. OUTCOME
Mixed - Appeal disposed of in terms of Singapore Airlines Ltd. (SC); recovery restricted strictly to Section 201(1A) interest without requiring proof of travel agents' tax payments.
5. AKHB REVIEW POINT
In legacy airline-commission TDS appeals governed by Singapore Airlines Ltd. (2023) 1 SCC 497, the Delhi High Court bars AOs from demanding proof of travel-agent tax compliance and restricts recovery solely to Section 201(1A) interest.
Source and verification
4-page official High Court of Delhi judgment PDF (DLHC011398162007_1_2026-01-22.pdf, 94,082 bytes).
Original PDF: 4 pages · SHA-256: 359206d1771adb2f66660762cbd4882f7b6e3acd55af7e6df01a56c1d7e41c3a
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Applies Sections 194H, 201(1), 201(1A), and 273B of the Income-tax Act, 1961. Income-tax Act, 2025 equivalence is not verified.
Full 4-page primary judgment PDF text read and verified page-by-page. Applies paragraphs 68–71 of Singapore Airlines Ltd. v. CIT (2023) 1 SCC 497 and Clause 3.1(l) exception of CBDT Circular No. 5/2024.
AI disclosure and professional disclaimer
AI-assisted source review. Independent human approval is not represented.
General research only. Read the complete judgment and verify applicable law and subsequent treatment before reliance.