The District Medical & Health Officer, Khammam V. THE ITO (TDS), WARD - 3(2), Vijayawada

CO 40/VIZ/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3381 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 07-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V APPALA RAJU
• Keywords: Competent authority
• Section: 201(1); 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO S . 53 & 54 / VIZ /201 4 (ASST. YEAR : 20 1 0 - 11 & 20 11 - 12 ) ITO (TDS), WARD - 3(2), VIJAYAWADA. V S . THE DISTRICT MEDICAL & HEALTH OFFICER, 11 - 04 - 73/32, BEHIND GOVERNMENT HOSPITAL, NEHRU NAGAR, KHAMMAM. T AN NO. HYDD 01823 D (APPELLANT) (RESPONDENT) C.O.NOS. 40 & 41/VIZ/2017 ( ITA NO S . 53 & 54 / VIZ /201 4) (ASST. YEAR : 20 10 - 11 & 2011 - 12 ) THE DISTRICT MEDICAL & HEALTH OFFICER, 11 - 04 - 73/32, BEHIND GOVERNMENT HOSPITAL, NEHRU NAGAR, KHAMMAM. VS . ITO (TDS), WARD - 3(2), VIJAYAWADA. T AN NO. HYDD 01823 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI V. APPALA RAJU SR. DR DATE OF HEARING : 20 / 1 2 /201 7 . DATE OF PRONOUNCEMENT : 22 / 1 2 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH E S E APPEAL S BY THE REVENUE AND THE CROSS OBJECTION S BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA , BOTH DATED 14/11 /201 3 FOR THE ASSESSMENT YEARS 20 1 0 - 11 TO 20 11 - 1 2 . 2 ITA NO. 53 & 54 /VIZ/2014 C.O.NOS. 40 & 41/VIZ/2017 ( THE DISTRICT MEDICAL & HEALTH OFFICER ) ITA NOS.53 & 54/VIZ/2014 2. FACTS OF THE CASE, IN BRIEF, ARE THAT IN ASSESSEES CASE , AN ORDER UNDER SECTION 201(1) & 201(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') WAS PASSED BY THE ASSESSING OFFICER BY RAISING A DE MAND OF RS. 24,58,254/ - ON THE GROUND THAT ASSESSEE FAILED TO DEDUCT TAX UNDER SECTION 192, 194C, 194H & 194J OF THE ACT ON THE PAYMENTS MADE ON ACCOUNT OF EUROPEAN COMMISSION, PHARMACIST, CIVIL ASSISTANT SURGEONS AND ADVERTISEMENT. SUBSEQUENTLY, THE ASSESSEE HAS FILED AN APPLICATION FOR RECTIFICATION UNDER SECTION 154 OF THE ACT BY SUBMITTING THAT DISTRICT MEDICAL & HEALTH OFFICER (DMHO), KHAMMAM IS NOT THE DRAWING & DISBURSING OFFICER (DDO) FOR THE PAYMENTS MADE , AND THE MEDICAL OFFICER S OF VARI OUS PRIMARY HEALTH CENTRES ARE THE DDOS , WHO ARE LIABLE FOR DEDUCTING TDS. THE ASSESSING OFFICER REJECTED THE SAID APPLICATION BY STATING THAT THERE IS NO MISTAKE APPARENT FROM THE RECORD. WHILE DOING SO, THE ASSESSING OFFICER STATED THAT IN RESPECT OF T HE PAYMENTS MADE TO THE PHARMACISTS AND CIVIL ASSISTANT SURGEONS DEP L OYED ON CONTRACT; THESE PAYMENTS ARE SALARY DISBURSEMENTS, ATTRACT TDS PROVISIONS OF SECTION 192 OF THE ACT. BUT, AS PER THE COPY OF NOTIFICATION PUBLISHED IN EENADU DAILY NEWS PAPER, KH AMMAN EDITION DATED 15/03/2001 CALLING OF APPLICATIONS FOR VARIOUS POSTS 3 ITA NO. 53 & 54 /VIZ/2014 C.O.NOS. 40 & 41/VIZ/2017 ( THE DISTRICT MEDICAL & HEALTH OFFICER ) BY THE ASSESSEE, IT WAS CLEARLY MENTIONED IN CLAUSE I OF THE ADVERTISEMENT THAT THE APPLICATIONS WERE INVITED FOR VARIOUS POSTS ON CONTRACT BASIS. IN RESPECT OF EUROPEAN COMMISSION, IT WAS NEVER MADE A PLEA THAT IT WAS THE PAYMENT OF SALARY TO THE REGULAR EMPLOYEES AND NOT A COMMISSION PAYMENT ON ACCOUNT OF ADVERTISEMENT CHARGES , I T WAS STATED THAT THE PAYMENTS WERE MADE TO THE DIFFERENT ADVERTISEMENT AGENCIES AND THE PAYMENTS INCLUDE FROM FINANCIAL YEAR 2007 - 08 TO 2010 - 11. BUT I T IS A FACT THAT THE SAME WAS NOT BROUGHT TO THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 201(1) OF THE ACT, WHICH WAS NOT DONE SO. IN VIEW OF THE SAME, THE PETITION F ILED BY THE ASSESSEE FOR RECTIFICATION , IS REJECTED. 3 . ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE COMPETENT AUTHORITY TO DEDUCT TDS ON PAYMENTS MADE TO VARIOUS PARTIE S IS NOT THE ASSESSEE, THE CONCERNED MEDICAL OFFICERS OF THE PRIMARY HEALTH CENTRE S . THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE AND ALSO DETAILS SUBMITTED, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 51. ON A PERUSAL OF THE SUBMISSIONS OF THE APPELLANT AND THE DETAILS FILED THEREON, I FOUND THAT THE APPELLANT IS A GOVERNMENT ORGANIZATION AND HEAD OF MEDICAL AND HEALTH 4 ITA NO. 53 & 54 /VIZ/2014 C.O.NOS. 40 & 41/VIZ/2017 ( THE DISTRICT MEDICAL & HEALTH OFFICER ) DEPARTMENT FOR KHA M MA M DISTRIC T AN D APPOINTING CONTRACT EMPLOYEES IN THE DES IGNATIONS OF MPHA (M), MPHA (F), LAB TECHNICIAN GR - 11, PHARMACIST GR - 11 AND MEDICAL OFFICER FOR CARRYING OUT THE ACTIVITIES RELATING TO RURAL FAMILY WELFARE SERVICES. IN THE PROCESS OF IMPLEMENTATION OF THE SAID WELFARE SERVICES, FUNDS WERE BEING GRANTED B Y THE GOVERNMENT OF ANDHRA PRADESH TO THE APPELLANT, WHO IN TURN IS ALLOCATING THE BUDGET AMONGST THE MEDICAL OFFICERS OF VARIOUS PRIMARY HEALTH CENTRES WORKING UNDER HIS CONTROL. IN FACT THE PAYMENTS TO THE CONTRACT EMPLOYEES WERE BEING MADE BY THE RESPEC TIVE MEDICAL OFFICERS OF VARIOUS PRIMARY HEALTH CENTRES AND NOT THE APPELLANT. HENCE, THE LIABILITY OF T DS IMPARTED ON THE APPELLANT BY THE ASSESSING OFFICER IS NOT JUSTIFIABLE. HE SHOULD HAVE CONSIDERED RAISING OF DEMANDS FOR NON DEDUCTION OF TDS BY THE M EDICAL OFFICERS, WHO ARE THE DRAWING AND DISBURSING OFFICERS. HENCE, THE ASSESSING OFFICER IS DIRECTED TO REDUCE THE DEMANDS RAISED UNDER SECTION 201 (1) & 201(1A) IN RESPECT OF THE APPELLANT AND CONSIDER THE OPTION OF RAISING DEMANDS IN THE HANDS OF THE R ESPECTIVE MEDICAL OFFICERS. 4 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER. 6 . LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER PASSED BY THE LD. CIT(A) . HE ALSO POINTED OUT AT PAGE NOS. 29 & 30 OF THE PAPER BOOK AND SUBMITTED THAT THE COMPETENT AUTHORITY TO DEDUCT TDS IS NOT THE ASSESSEE AND MEDICAL OFFICERS OF VARIOUS PRIMARY HEALTH CENTRES . 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 5 ITA NO. 53 & 54 /VIZ/2014 C.O.NOS. 40 & 41/VIZ/2017 ( THE DISTRICT MEDICAL & HEALTH OFFICER ) 8 . THE ONLY ISSUE FOR CONSIDERATION IN THESE APPEALS IS WHO IS THE COMPETENT AUTHORITY TO DEDUCT TDS . THE LD. CIT(A) HAS CONSIDERED THE DETAIL S AND SUBMISSIONS MADE BY THE ASSE SSEE AND GAVE A CATEGORICAL FINDING THAT THE ASSESSEE IS A GOVERNMENT ORGANIZATION AND HEAD OF MEDICAL & HEALTH DEPART FOR KHAMMAM DISTRICT AND APPOINTING CONTRACT EMPLOYEES IN THE DESIGNATIONS OF MPHA(M), MPHA(F) , LAB TECHNICIAN GRADE - II, PHARMACIST GRADE - II AND MEDICAL OFFICER FOR CARRYING OUT THE ACTIVITIES RELATING TO RURAL FAMILY WELFARE SERVICES. IN THE PROCESS OF IMPLEMENTATION OF THE SAID WELFARE SERVICES, FUNDS WERE BEING GRANTED BY THE GOVERNMENT OF ANDHRA PRADESH TO THE ASSESSEE, WHO IN TURN ALL OCATED THE BUDGET AMONGST THE MED I CAL OFFICERS OF VARIOUS PRIMARY HEALTH CENTRES WORKING UNDER HIS CONTROL. IN FACT, THE PAYMENTS TO THE CONTRACT EMPLOYEES WERE BEING MADE BY THE RESPECTIVE MEDICAL OFFICER OF VARIOUS PRIMARY HEALTH CENTRES AND NOT THE ASS ESSEE AND , THEREFORE , THE DEMAND RAISED BY THE ASSESSING OFFICER IS NOT CORRECT ON THE GROUND THAT TDS IS NOT DEDUCTED UNDER SECTION 201(1) & 201(1A) AND ALLOWED THE APPEALS OF THE ASSESSEE. WE ALSO FIND FROM THE PAPER BOOK AT PAGE NOS. 29 & 30, WHEREIN I T IS CLEARLY MENTIONED THAT WHO ARE THE DDOS TO MAKE THE PAYMENTS TO VARIOUS PARTIES , T HEREFORE, THE ASSESSEE IS NOT A COMPETENT PERSON TO DEDUCT TDS. IN VIEW OF THE ABOVE, WE 6 ITA NO. 53 & 54 /VIZ/2014 C.O.NOS. 40 & 41/VIZ/2017 ( THE DISTRICT MEDICAL & HEALTH OFFICER ) FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. C.O.NO. 40 & 41/VIZ/2017 9. SO FAR AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ONLY SUPPORTIVE TO THE ORDERS OF THE LD. CIT(A). THEREFORE, IN VIEW OF OUR DECISION IN THE ABOVE APPEALS, NO SEPARATE ADJUDICATION IS REQUIRED, HENCE, THE SAME ARE DISMISSED . 10 . IN THE RESULT, APPEAL S FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 2 N D DAY OF DEC. , 201 7 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 2 N D DECEMBER , 201 7 . VR/ - COPY TO: 1. THE ASSESSEE - THE DISTRICT MEDICAL & HEALTH OFFICER, 11 - 04 - 73/32, BEHIND GOVERNMENT HOSPITAL, NEHRU NAGAR, KHAMMAM. 2. THE REVENUE ITO (TDS), WARD - 3(2), VIJAYAWADA. 3. THE CIT (TDS), HYDERABAD. 4. THE CIT(A) , VIJAYAWADA. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.