Income tax Officer, TDS, Ward -3(6), Tirupathi V. District Rural Development Agency (DRDA), Kadapa

CO 130/HYD/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9403 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 17-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K HARITA
• Section: 133A; 194C; 201(1); 6; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.940/HYD/2013 ASSESSMENT YEAR 2009-2010 ITO, (TDS), WARD-3(6) TIRUPATI VS. THE PROJECT DIRECTOR DISTRICT RURAL DEVELOPMENT AGENCY (DRDA), KADAPA PAN HYDYO 0285F (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.130/HYD/2012 ARISING OUT OF ITA.NO.940/HYD/2013 - ASSESSMENT YEAR 2009-2010 THE PROJECT DIRECTOR DISTRICT RURAL DEVELOPMENT AGENCY (DRDA), KADAPA PAN HYDYO 0285F VS. ITO, (TDS), WARD-3(6) TIRUPATI (APPELLANT) (RESPONDENT) FOR REVENUE : MS. K. HARITA FOR ASSESSEE : -NONE- DATE OF HEARING : 06.03.2014 DATE OF PRONOUNCEMENT : 21.03.2014 ORDER PER B.RAMAKOTAIAH, A.M. THE MAIN APPEAL IS BY REVENUE AGAINST THE ORDER OF THE CIT(A), GUNTUR PARTLY ALLOWING THE ORDER OF A.O. UNDER SECTION 201(1) AND 201(1A) RAISING DEMANDS. ASSESSE E FILED CROSS OBJECTION MAINLY SUPPORTING THE ORDER OF CIT( A). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SUR VEY UNDER SECTION 133A WAS CONDUCTED ON 15.02.2010 TO V ERIFY THE 2 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA COMPLIANCE WITH THE PROVISIONS OF CHAPTER XVII-B OF THE ACT, WITH REFERENCE TO TDS. THE PROJECT DIRECTOR OF DRDA , KADAPA IS THE DRAWING AND DISBURSING OFFICER. AS PART OF RURA L DEVELOPMENT ACTIVITY FOR PROMOTION OF RURAL ECONOMY , DRDA WAS FORMED AND ONE OF THE ACTIVITIES BEING EDUCATIO N OF RURAL UNEMPLOYMENT YOUTH IN COMPUTERS AND ELECTRONICS SYS TEMS. IT ENTERED INTO CONTACTS WITH VARIOUS GOVERNMENT AN D NON GOVERNMENT AGENCIES. FOR THIS ACTIVITY, ASSESSEE DE DUCTED TAX AT 2.261% ON THE PAYMENTS MADE UNDER THE AGREEMENTS . A.O. HOWEVER, WAS OF THE VIEW THAT THE PAYMENTS TO FACUL TY FROM M/S. CMD LTD., KEERTHI INFOTECH, MR. V. INSTITUTE O F EXCELLENCE AND SKYLARK INFOWAYS PVT. LTD. HYDERABAD COME UNDER THE PROVISIONS OF 194J OF THE ACT TOWARDS THE PAYMENT F OR PROFESSIONAL CHARGES AND TAX WAS SHORT DEDUCTED. TH E DETAILS OF THE AMOUNTS PAID AND SHORT DEDUCTION AND INTERES T WORKING IS AS UNDER : FINANCIAL YEAR GROSS AMOUNT PAID (RS.) ACTUAL DEDUCTABLE TDS (RS. TDS MADE (RS.) SHORT DEDUCTION (RS) INTEREST U/S.201(1 A) (RS.) 1 ZILLA SAMAKHYA 2008-09 14,58,970 1,59,759 33,069 1,26,690 21,584 2 DRDA 2008-09 1,01,18,296 12,17,298 4,85,865 7,31,433 1,09,846 3. BEFORE THE LD. CIT(A), ASSESSEE SUBMITTED THAT THE PAYMENTS CONSIDERED BY THE A.O. WERE IN FACT PAID T O FOUR PERSONS M/S CMC LTD., KEERTHI INFOTECH, SKYLARK INF OWAYS PVT. LTD. AND MR. V. INSTITUTE OF EXCELLENCE. IT WAS SU BMITTED THAT EVEN THOUGH ASSESSEE DEDUCTED TAX, THE A.O. WAS OF THE OPINION THAT THE ASSESSEE SHOULD HAVE DEDUCTED HIG HER AMOUNT AND RAISED THE DEMAND. RELYING ON THE PRINC IPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HI NDUSTAN COCA-COLA BEVERAGES PVT. LTD. 293 ITR 226, IT WAS S UBMITTED 3 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA THAT THE DEDUCTEES HAVE FILED THEIR RETURNS OF INCO ME AND PAID TAX AND FURNISHED EVIDENCE WITH REFERENCE TO FIRST THREE COMPANIES. WITH REFERENCE TO FOURTH, M/S MR. V. INS TITUTE OF EXCELLENCE, THE DETAILS WERE NOT AVAILABLE WITH THE ASSESSEE. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS AND FA CTS, DECIDED THE ISSUE AS UNDER : 4.2. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT, GONE THROUGH THE ORDER OF THE A.O. AND A LSO PERUSED THE CITATIONS RELIED ON BY THE APPELLANT. T HE APPELLANT ENGAGED FACULTY FROM CMC LTD., KEERTHI IN FOTECH, MR V INSTITUTE OF EXCELLENCE AND SKYLARK INFOWAYS P VT. LTD. HYDERABAD AND HAS PAID PROFESSIONAL CHARGES. THESE FOUR PARTIES ENGAGED IN IMPARTING CALL CENTRE TRAINING, TRAINING IN HOTEL MANAGEMENT, GARMENT MAKING AND COMPUTER ACCOUNTING RESPECTIVELY. ON AN EXAMINATION IT IS SE EN THAT TDS IS ATTRACTED IN PAYMENTS MADE TO ALL THE FOUR P ARTIES, THE DETAILS OF WHICH ARE IN THE BODY OF THE ORDER U NDER SECTION 201(1) AND 201(1A). IN THE MEANWHILE, THE A R TOOK THE PLEA THAT IN CASE THE RECIPIENT PAID ADVANCE TA X ON HIS TOTAL INCOME INCLUDING THE AMOUNTS PAID BY THE APPE LLANT, IN THAT CASE TDS NEED NOT BE MADE, THUS ANSWERING THE OBLIGATION UNDER SECTION 201(1); WITH PARTICULAR RE FERENCE TO APEX COURTS COCO COLA CASE BUT IN RESPECT OF 201(1 A), LIABILITY IT IS TILL THE DATE OF 140A PAYMENTS. IN LIGHT OF THE COCO COLA CASE, AS PER THE INFORMATION FURNISHED BY THE AR, THERE IS NO LIABILITY UNDER SECTION 201(1) IN THE F IRST THREE CASES, INASMUCH AS THE LIABILITY UNDER SECTION 201( 1A) IS CONCERNED, 2 ND AND 3 RD PARTIES HAVE COMMITTED DEFAULT AND AS SUCH INTEREST IS LEVIED TILL THE DATE OF ADVANCE TAX CUM 140 PAYMENT AND THE A.O. IS DIRECTED TO REWORK THE LIABILITY ACCORDINGLY. IN AS FAR AS THE 4 TH PARTY IS CONCERNED, THERE IS A DEFAULT BOTH IN TERMS OF SECTION 201(1) AND 201(1A) AND THE LIABILITIES FOR BOTH THESE SECTIONS ARE RETAINED. 4. THE REVENUE IS AGGRIEVED AND RAISED TWO GROUNDS WHICH ARE AS UNDER : 1. THE LD. CIT(A) IS ERRED IN PASSING THE APPELLAT E ORDER WITHOUT JURISDICTION AND THAT THE ORDER IS NOT ACCE PTABLE ON MERITS ALSO. 4 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION MA DE U/S. 201(1) BASING ON THE GROUND THAT THE RECIPIENT HAS PAID THE ADVANCE TAX ON ITS TOTAL INCOME INCLUDING THE AMOUN TS PAID BY THE ASSESSEE AND THE TDS NEED NOT BE MADE U/S.20 1(1) WITH REFERENCE TO APEX COURTS COCA-COLA CASE. 5. ASSESSEE IN ITS CROSS OBJECTIONS RAISED THE FOLLOWING GROUNDS, PARTLY IN SUPPORT OF THE ORDER O F THE CIT(A) : 1. THE LD. CIT(A) HAS NOT ERRED IN PASSING THE APP ELLATE ORDER DATED 27.07.2011 AND IS ACCEPTABLE ON MERITS WITH R EFERENCE TO SUPREME COURT CASE IN HINDUSTHAN COCA COLA (2007 ) 243 ITR 226 (SC). 2. THE LD. CIT(A) HAS CONSIDERED THE FACTS OF THE C ASE JUDICIOUSLY CONSIDERING THE TAXES HAVING BEEN PAID BY THE TDS DEDUCTEES ON THEIR TOTAL INCOME AND FILED IT RE TURNS. 3. THE LD. CIT(A) HAS PARTLY ALLOWED THE CASE TO RE WORK INTEREST ONLY FOR ANY DEFAULT IN ADVANCE TAX CUM 140A PAYMEN T IN RESPECT OF ONE DEDUCTEE ONLY. 4. THE RESPONDENT DEDUCTED TAXES AT SOURCE FOR CONT RACT WORK OF IMPARTING TRAINING TO BENEFICIARIES U/S 194C OF IT ACT AND AFTER RECEIVING PROPER ADVICE DEDUCTED U/S 194J AT HIGHER RATES AND PAID TAXES. 5. THE APPELLANT HAS ATTACHED THE BANK ACCOUNT OF T HE RESPONDENT UNDER SECTION 226(3) ON 24 TH JAN. 2012 AND OBTAINED BANK DRAFT FOR RS.989553 BEING THE TOTAL D EMAND. 6. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE BUT ASSESSEE HAS FILED WRITTEN SUBMISS IONS ON RECORD BY THEIR LETTER DATED 11.01.2013 WHICH WAS C ONSIDERED AFTER HEARING THE LEARNED D.R. 7. THE FIRST GROUND RAISED BY THE REVENUE IS THAT THE ORDER PASSED BY THE CIT(A), GUNTUR IS WITHOUT JURIS DICTION AS THE APPEAL HAS TO BE DECIDED BY CIT(A), VIJAYAWADA VIDE NOTIFICATION DATED 10.11.2010. THIS GROUND IS NOT M AINTAINABLE BEFORE US FOR MANY REASONS. AS SEEN FROM THE NOTIF ICATION DATED 10.11.201 PLACED ON RECORD, THE CIT(A), VIJAY AWADA HAS 5 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA JURISDICTION OVER ALL CASES OF CIT, VIJAYAWADA AND CIT-TDS, HYDERABAD. AGAINST COLUMN-4, IT WAS MENTIONED THAT ALL APPEALS EMANATING FROM THE ORDERS OF THE ADDL. CIT/JCIT/DCIT/ACS-IT/ITOS OF RANGE-3, VIJAYAWADA AR E UNDER CIT(A), VIJAYAWADA. WHETHER ITO-TDS-2, TIRUP ATI IS COVERED IN THE OFFICERS REFERRED TO IN COLUMN-4 IS NOT PLACED BEFORE US. AS THE ORDERS OF 201(1A) WAS PASSED BY INCOME TAX OFFICER, TDS-2, TIRUPATI, WHETHER THE SAID OFFICER WAS WORKING UNDER ANY OF THE OFFICERS SPECIFIED IN COLUMN-4 OF THE NOTIFICATION WAS NOT SPECIFIED. 7.1. IT WAS ALSO NOTICED THAT SURVEY WAS CONDU CTED ON 15.02.2010 AND ORDER WAS PASSED ON 29.03.2010. THE APPEAL WAS PREFERRED BEFORE THE CIT(A), GUNTUR ON 22.04.20 10. THE JURISDICTION ORDER ON WHICH GROUND WAS RAISED AND C OPY PLACED ON RECORD WAS PASSED ON 10.11.2010. SINCE THE NOTIF ICATION ASSIGNING THE JURISDICTION TO CIT(A), VIJAYAWADA WA S ISSUED AFTER THE APPEAL WAS PREFERRED BEFORE THE CIT(A), G UNTUR, ON THIS REASON ALSO WE DO NOT SEE ANY REASON TO CONSID ER THE REVENUE GROUND. 7.2. MOREOVER, THE D.R. WAS SPECIFICALLY ASKED WHETHER THE JURISDICTION OF THE CIT(A) TO WHOM ASSESSEE SHOULD PREFER APPEAL WAS MENTIONED IN THE NOTICE UNDER SECTION 15 6 ISSUED, AT THE TIME OF RAISING THE DEMAND UNDER SECTION 201 . THE NOTICE UNDER SECTION 156 SHOULD SPECIFY, IN CASE AS SESSEE IS AGGRIEVED ON THE ORDER, TO WHOM ASSESSEE SHOULD PRE FER THE APPEAL. IN THE ABSENCE OF ANY SPECIFICATION IN THAT NOTICE, THE ASSESSEE MIGHT HAVE PREFERRED THE APPEAL TO CIT, GU NTUR UNDER WHOSE TERRITORIAL JURISDICTION IT IS FUNCTIONING, A S THE CASES OF CIT, GUNTUR/ TIRUPATI WERE ASSIGNED TO CIT(A), GUNT UR. 6 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA FURTHER, WHEN THE APPEAL MEMO WAS FILED BEFORE THE CIT(A), GUNTUR, HE SENDS THE COPY OF THE APPEAL MEMO TO TH E A.O. FOR EXAMINATION OF THE CONTENTS THEREIN. THERE IS NO OB JECTION AT THAT POINT OF TIME BY A.O. BEFORE THE CIT(A) ABOUT THE JURISDICTION. HAVING PREFERRED THE APPEAL AND HAVIN G ENTERTAINED BY THE CIT(A), GUNTUR, IT IS TOO LATE I N THE DAY TO RAISE THE ISSUE OF JURISDICTION. IT IS SURPRISING T O KNOW THAT AT PRESENT ITO, WARD 3(6), TIRUPATI IS SUBMITTING THE RELEVANT DETAILS, WHEN IN FACT THE JURISDICTION PERTAINS TO ITO, TDS(2), TIRUPATI WHO WAS HAVING JURISDICTION AT THE RELEVAN T POINT OF TIME. IN THE ABSENCE OF ANY DETAILS ON RECORD, THIS GROUND RAISED BY THE REVENUE, WHICH DOES NOT ARISE OUT OF THE ORDERS OF THE CIT(A), GUNTUR BECOMES AN ADDITIONAL GROUND BEFORE US. ADDITIONAL GROUND CANNOT BE ADMITTED, UNLESS THE FA CTS ARE ON RECORD. IN VIEW OF THIS, THIS GROUND IS REJECTED AS NOT MAINTAINABLE. 8. GROUND NO.2 PERTAINS TO THE ISSUE OF RELIEF GRA NTED BY THE CIT(A), GUNTUR ON THE ISSUE OF TDS. ASSESSEE SUBMITTED DETAILS OF THE TDS CONSIDERED BY THE A.O. (WHICH AR E NOT MENTIONED IN THE ORDER OF THE A.O.) AS UNDER : SERIAL NO. PAN DEDUCTEE AAACC2030K CMC LTD. HYDERABAD AAIFK0772D KEERTHI INFOTECH, HYDERABAD AAKCS4894D SKYLARK INFOWAVES HYDERABAD MR V INSTITUTE OF EXCELLENCE TOTALS DRDA AMOUNT PAID TO DEDUCTEE 7148723 3159235 1183715 85593 11577266 TDS @ 10.3% 736318 325401 121923 8816 1192458 TDS MADE BY DRDA 28579 158808 72407 1940 518934 SHORT TDS 450539 166593 49516 6876 673524 7 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA 8.1. OUT OF THE FOUR ITEMS, ASSESSEE COULD FURNISH THE DETAILS OF RETURNS FILED WITH REFERENCE TO FIRST TH REE ITEMS. CONSIDERING THESE FACTS, THE LD. CIT(A) PARTLY CONF IRMED THE ORDER AS EXTRACTED ABOVE. AFTER CONSIDERING THE FAC TS ON RECORD, WE DO NOT SEE ANY REASON TO DEVIATE FROM THE ORDER OF THE CIT(A). WE CONFIRM THE SAME. ACCORDINGLY, REVENUE G ROUND.2 IS REJECTED. 9. AS FAR AS THE ASSESSEES CROSS-OBJECTION IS CONCERNED, IT IS PARTLY IN SUPPORT OF THE ORDER OF THE LD. CIT(A)AND ALSO EXPRESSING GRIEVANCE ON RELIEF WORKE D OUT AND EXCESS RECOVERY. IT IS NOTICED THAT EVEN THOUGH RE LIEF WAS GRANTED BY THE LD. CIT(A), GUNTUR, CONSEQUENTIAL OR DER ENCLOSED TO THE WRITTEN SUBMISSIONS OF THE ASSESSEE DO INDICATE THAT THE RELIEF WAS GRANTED PARTLY BY THE A.O. WITH OUT EXAMINING THE FACTS. AS FAR AS THE ASSESSEES SHORT DEDUCTION OF TAX IN THE CASE OF MR. V INSTITUTE OF EXCELLENCE IS CONCERNED, THAT IS ONLY RS.6876/- WHEREAS, CONSEQUENTIAL ORDER CONFIRMS THE AMOUNT TO THE EXTENT OF RS.1,65,750/-. THIS REQ UIRE RE- EXAMINATION BY THE A.O. THE LEVY OF INTEREST ALSO, EVEN THOUGH NOT STATED EXACTLY, ULTIMATELY AMOUNT CONFIRMED SEE MS TO BE RS.35,583/- ON WHICH ASSESSEE SEEMS TO HAVE NO GRIE VANCE. FURTHER, ASSESSEE HAS RAISED TWO OBJECTIONS IN THE CROSS OBJECTIONS - THAT THE A.O. ATTACHED THE BANK ACCOUN T ON 24 TH JANUARY, 2012 I.E., AFTER THE CIT(A) HAS PASSED THE ORDER GIVING RELIEF, WITHOUT GIVING EFFECT TO THE CONSEQUENTIAL ORDER AND RECOVERED AN AMOUNT OF RS. 9,89,553/-. AS PER THE CONSEQUENTIAL ORDER PASSED ON 03.05.2012, THE NET D EMAND PAYABLE WORKED OUT TO ONLY RS.2,04,333/-. THERE SEE MS TO BE NO DIRECTION FOR GRANTING THE EXCESS RECOVERY. THER EFORE, WE DIRECT THE A.O. TO VERIFY THE ACTUAL SHORT DEDUCTIO N AND RE- 8 ITA.NO.940/HYD/2012 & CO 130/HYD/2012 DISTRICT RURAL DEVELOPMENT AGENCY (DRDA) KADAPA DETERMINE THE AMOUNT PAYABLE AND REFUND THE EXCESS AMOUNT COLLECTED TO THE DDO, DRDO IMMEDIATELY WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED AND CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.03.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED 21 ST MARCH, 2014 VBP/- COPY TO : 1. ITO, (TDS), WARD 3(6), RAJASVA BHAVAN, 4 TH FLOOR, VARADARAJANAGAR, TIRUPATI 517 501. 2. THE PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AG ENCY (DRDA), PRAGATHI BHAVAN, KADAPA 3. CIT(A), GUNTUR. 4. CIT (TDS), HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.