The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT ) held that transport aggregator Ola ( ANI Technologies Private Limited ) is not responsible to deduct withholding TDS deductions on driver payments.
ITAT ruled that Ola acts as the only intermediary. The role of Ola would be restricted to handling and functioning the OLA applications, which eases the transport services by the driver to the rider and the payment collection through the e-wallet on the driver’s side. It is specified that in the case of an accident or any incident only the driver is responsible for involving a vehicle providing a taxi service and OLA is not responsible for any incident as per the agreements between them. It mentioned that the former and the driver are independent contractors.
The Tribunal bench comprising Judicial Member Sudhanshu Srivastava and accountant Member Vikram Singh Yadav ruled that it is transparent from the contracts between ola and the driver and with the rider within the contract for the transportation services between the driver and the rider.
Tribunal sees that the driver is qualified for the fare towards providing the transportation services to the rider and the individual is liable for the payment, in that case, is the only rider and not Ola. Before that the assessing officer would have highlighted the contractual relationship between the rider and the driver which was sustained via the commissioner of income tax (appeal).
During permitting the petition, the tribunal sees that the assessing officer along with the commissioner mistaken in concluding that Ola was furnishing the transportation services which was sub-contracted to the driver, and as per the result it holds that Ola was obligated to deduct tax at source (TDS) for the assessment year 2018-19.
