THE AMERICAN SCHOOL OF BOMAY EDUCATION TRUST, MUMBAI V. DCIT (TDS) 1(1), MUMBAI

CO 22/MUM/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8384 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 15-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Assessee Lawyers: BRIAN FERNANDES
• Keywords: Non-deduction of tax
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO. 8414/MUM/2010 (ASSESSMENT YEAR: 2003-04) ADD. CIT (TDS) RANGE - 1 AMERICAN SCHOOL OF BOMBAY 8TH FLOOR, ROOM NO. 803 EDUCATION TRUST SMT. M.B. MITTAL HOSPITAL BLDG. VS. G-BLOCK, BANDRA KURLA COMPLEX CHARNI ROAD, MUMBAI 400002 BANDRA (E), MUMBAI 4000 51 PAN - AAATT 9038 K APPELLANT RESPONDENT CO NO. 22/MUM/2012 (ASSESSMENT YEAR: 2003-04) AMERICAN SCHOOL OF BOMBAY DCIT (TDS) RANGE 1(1) EDUCATION TRUST 8TH FLOOR, ROOM NO. 803 G-BLOCK, BANDRA KURLA COMPLEX VS. SMT. M.B. MITTAL HOSPITAL BLDG. BANDRA (E), MUMBAI 400051 CHARNI ROAD, MUMBAI 4000 02 PAN - AAATT 9038 K CROSS OBJECTOR APPELLANT IN APPEAL REVENUE BY: SHRI SURINDER JIT SINGH ASSESSEE BY: SHRI DIVESH CHAWLA & SHRI BRIAN FERNANDES DATE OF HEARING: 28.03.2013 DATE OF PRONOUNCEMENT: 28.03.2013 O R D E R PER D. MANMOHAN, V.P. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 30.09.2010 PASSED BY THE CIT(A)-14, MUMBAI. 2. PENALTY LEVIED BY THE AO UNDER SECTION 271C OF THE INCOME TAX ACT, 1961 HAVING BEEN SET ASIDE BY THE CIT(A), REVENUE I S IN APPEAL BEFORE US AND THE ASSESSEE FILED A CROSS OBJECTION SUPPORTING THE STAND TAKEN BY THE CIT(A). 3. WE HAVE HEARD THE LEARNED D.R. AS WELL AS THE LEARN ED COUNSEL FOR THE ASSESSEE IN THIS REGARD AND CAREFULLY PERUSED THE R ECORD. THE FACTS NECESSARY ITA NO. 8414/MUM/2010 & CO 22/M/12 AMERICAN SCHOOL OF BOMBAY EDUCATION TRUST 2 FOR DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. ASS ESSEE IS RUNNING A SCHOOL IN THE NAME AND STYLE OF AMERICAN SCHOOL OF BOMBAY ED UCATION TRUST. A SURVEY UNDER SECTION 133A WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 24.01.2006 WHEREIN IT WAS FOUND THAT THE ASSESSEE F AILED TO DEDUCT TAX AT SOURCE FROM THE SALARIES PAID TO THE EXPATRIATE TEA CHERS BY SOUTH ASIA INTERNATIONAL EDUCATIONAL SERVICES OUT SIDE INDIA. ACCORDING TO THE AO THE ASSESSEE SHOULD BE TREATED AS DEFAULTER IN TERMS OF SECTION 201(1) AND ALSO INTEREST UNDER SECTION 201(1A) SHOULD BE CHARGED FO R FAILURE TO DEDUCT TAX AT SOURCE UNDER SECTION 194C OF THE INCOME TAX ACT. CO NSEQUENTLY THE AO REFERRED THE CASE TO THE ADDITIONAL CIT (TDS), RANG E-1, MUMBAI FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271C OF THE ACT. 4. THOUGH THE ASSESSEE EXPLAINED THE REASONS FOR NON-D EDUCTION OF TAX AT SOURCE THE AO PROCEEDED TO LEVY PENALTY UNDER SECTI ON 271C AND HENCE THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHER EIN IT WAS CONTENDED THAT THE VERY BASIS FOR LEVY OF PENALTY NO LONGER S UBSISTS IN THE LIGHT OF THE DECISION OF THE ITAT L BENCH MUMBAI WHEREIN THE P ROCEEDINGS INITIATED BY THE DCIT (TDS), RANGE 1, MUMBAI UNDER SECTION 201( 1) OF THE ACT WAS SET ASIDE BY THE TRIBUNAL. HAVING REGARD TO THE CIRCUMS TANCES OF THE CASE THE LEARNED CIT(A) CANCELLED THE PENALTY BY OBSERVING I N PARA 6 OF HIS ORDER AS UNDER: - 6. I FIND THAT THE HON'BLE I.T.A.T. VIDE ORDER DAT ED 8-3-2010 IN ITA NO. 3628/2007 HAS SET ASIDE THE PROCEEDINGS ON THE GROUND OF NON- INITIATION OF PROCEEDINGS AGAINST THE PAYEE AND HEL D THAT THE BENEFIT OF ARTICLE 22 WILL BE AVAILABLE TO THE EMPLOYEES. IN T HE INSTANT ORDER THE HON'BLE ITAT HAS FOLLOWED ITS OWN ORDER FOR THE EAR LIER YEARS AND THE CASE OF THE APPELLANT AS WELL AS THE DECISION IN TH E CASE OF MAHENDRA & MAHENDRA LTD. KEEPING IN VIEW OF THE FACT THAT THE QUANTUM APPEAL IS DECIDED IN FAVOUR OF THE APPELLANT, AND ALSO TAKING INTO ACCOUNT THE ORDER OF THE A.O. GIVING EFFECT TO THE ITAT ORDER D ATED 28.-6-2010. THE PENALTY LEVIED U/S. 271C OF THE IT ACT IS DELETED. 5. FURTHER AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING THE LEARNED COUNSEL PLACED BEFORE AS AN ORD ER OF THE ITAT L BENCH MUMBAI (ITA NO. 3628/MUM/2007 DATED 08/03/2010) TO SUBMIT THAT THE ORDER PASSED BY THE CIT(A) DOES NOT CALL FOR ANY IN TERFERENCE SINCE THE SAID ORDER, IN TURN, IS BASED UPON THE DECISION OF THE I TAT. ITA NO. 8414/MUM/2010 & CO 22/M/12 AMERICAN SCHOOL OF BOMBAY EDUCATION TRUST 3 6. ON THE OTHER HAND, THE LEARNED D.R. SUPPORTED THE S TAND OF THE AO. 7. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE D O NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE CIT(A) AND THE REFORE WE DISMISS THE APPEAL FILED BY THE REVENUE. SINCE THE PENALTY LEVI ED BY THE AO IS DELETED, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES I NFRUCTUOUS AND ACCORDINGLY DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2013. SD/- SD/- (R.S. SYAL) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 28 TH MARCH, 2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 14, MUMBAI 4. THE CIT (TDS), MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.