THE Punjab National Bank, Bhopal V. THE ACIT 1(1), Bhopal

ITA 1009/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5693 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Section: 194C; 201(1); 154

Judgement Text

M/S. PUNJAB NATIONAL BANK /I.T.A. NO. 1009/1010-10 11/IND/2016/A.Y.:09-10 AGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER PUNJAB NATIONAL BANK MARWARI ROAD BRANCH BHOPAL TAN: BPLP 01331 B VS. DCIT(TDS) CPC, GHAZIABAD APPELLANT RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI MOHD. JAVED, SR. DR. DATE OF HEARING 22.03.2017 DATE OF PRONOUNCEMENT 22.03.2017 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. 1. THESE APPEALS BY THE ASSESSEE IS DIRECTED AGAINST T HE COMMON ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, BHOPAL,[ IN SHORT THE CIT(A)] DATED 30.06.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10 ( Q1 , Q3 AND Q4) ARISING OUT OF ORDER U/S. 154 R.W.S. 200A DTD. 13.02.2005 OF IN COME TAX ACT, 1961('THE ACT) PASSED BY THE DCIT (TDS), CPC, GHAZIABAD [HEREINAFT ER REFERRED TO AS THE AO]. 2. THE ASSESSEE HAS TAKEN AS MANY AS 7 NUMBER OF GROUN DS OF APPEAL, A.Y. 2009-10 RELATING TO Q1 , Q3 AND Q4 . THE SUM AND S UBSTANCE OF THE GROUNDS OF I.T.A. NO.1009,1010 & 1011/IND/2016 ASSESSMENT YEAR:2009-10 (Q1,Q3,& Q4) M/S. PUNJAB NATIONAL BANK /I.T.A. NO. 1009/1010-10 11/IND/2016/A.Y.:09-10 AGE 2 OF 5 APPEAL ARE THAT THE LEARNED CIT(A) HAS ERRED IN HO LDING THAT THE ASSESSEE WAS LIABLE TO PAY A SUM OF RS. 1,47,530/- [ SHORT DEDUC TION RS. 82,719+ INTEREST RS. 64,807] FOR Q1 , RS. 3,74,230/- [SHORT DEDUCTION RS . 2,15,047/- +INTEREST RS. 1,59,185) FOR Q3 AND RS. 3,74,230/- [ SHORT DEDUCTI ON RS. 1,19,111/- + INTEREST RS. 83,676) FOR Q4 ON ACCOUNT OF SHORT DEN AND INTERES T THEREON AS PER PROVISIONS OF SECTION 194A READ WITH SECTION 201(1) OF THE ACT W ITHOUT PROPERLY CONSIDERING THE DECISION OF HON`BLE SUPREME COURT IN THE CASE OF HI NDUSTAN COCA COLA BEVERAGE (P) LIMITED VS. CIT, (2007) 293 ITR 226 (SC) / [20 07] 163 TAXMAN 355 (SC) AND CBDT CIRCULAR ISSUED UNDER F. NO.275/201/95-IT(B) D TD. 29.01.1997. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NATIONALIZED BANK, WHICH WAS REQUIRED TO DEDUCT TDS ON THE STIPULATED RATE A ND DEPOSIT THE SAME IN THE GOVT. ACCOUNT ON CORPORATION DEPOSITS. THE ASSESSEE HAS DEDUCTED TDS @ 10% ON DEPOSITS FROM M/S. JAGRAN PUBLICATION PVT. LTD . AND M/S. MADHYA PRADESH TRADE INVESTMENT CORPORATION INSTEAD @20% DUE TO CL ERICAL MISTAKE. THUS, THE AO NOTED THAT THE ASSESSEE WAS REQUIRED TO DEDUCT T DS @ 20%. THEREFORE, THE ASSESSING OFFICER RAISED THE AFORESAID DEMAND ON AC COUNT OF SHORT DEDUCTION OF TDS AND INTEREST ON SHORT DEDUCTION. 4. AGAINST THIS, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE HAS SATISFIED THE A O THAT IN VIEW OF THE CBDT CIRCULAR ISSUED UNDER F. NO.275/201/95-IT(B) DTD. 2 9.01.1997, THE ASSESSEE SHOULD NOT BE FORCED TO PAY THE DEMAND AFTER TAX DEDUCTOR THUS, SATISFIED THE OFFICER IN CHARGE OF TDS THAT TAXES HAVE BEEN PAID BY THE DEDU CTEE ASSESSEE. THE ASSESSEE ALSO RELIED ON CERTAIN CASE LAWS. THE LD. CIT (A) O BSERVED THAT THE ASSESSEE HAS QUOTED DECISION IN THE CASE OF M/S. HINDUSTAN COCA COLA BEVERAGE V CIT AND CBDT CIRCULAR F. NO. 275/201/95-IT(B) DTD. 29.01.1997 TH AT DEDUCTEE HAD PAID THE DUE M/S. PUNJAB NATIONAL BANK /I.T.A. NO. 1009/1010-10 11/IND/2016/A.Y.:09-10 AGE 3 OF 5 TAXES. BUT THE ASSESSEE HAS GIVEN A COPY OF FRONT P AGE OF THE RETURN IN THE CASE OF M/S. JAGRAN PUBLICATION FOR A.Y. 2009-10, BUT NO FU RTHER DETAILS GIVEN WITH REGARD TO INTEREST INCOME SHOWN BY THE SAID PARTY. SIMILAR LY WITH REGARD TO M/S. MADHYA PRADESH TRADE & INVESTMENT FACILITATION CORPORATIO N LTD. BHOPAL , THE ASSESSEE HAS SUBMITTED BALANCE SHEET AND PROFIT & LOSS ACCOU NT OF THIS PAYEE BUT FURTHER DETAILS REGARDING INTEREST RECEIVED FROM BANK AND T AX PAID ON SAME IS NOT TALLYING. THE LD. CIT (A) FURTHER OBSERVED THAT THE ASSESSEE CANNOT BE ABSOLVED FROM PAYMENT OF INTEREST. THEREFORE, THE ACTION OF THE A O WAS UPHELD. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. HOWEVER, WHEN THE ASSESSEE APPEAL WAS CALLED FOR HE ARING NONE FROM THE ASSESSEE SIDE APPEARED. HOWEVER, WE FIND FROM THE C OPIES OF PROFIT & LOSS ACCOUNT , BALANCE SHEET AND OTHER DETAILS AS FILED BEFORE THE CIT(A) IN WHICH IT WAS CLAIMED THAT THE DEDUCTEE HAS PAID THE DUE TAXES TH EREON AND SHOWN AS THEIR INCOME. HOWEVER, THE LD. CIT (A) HAS NOT ACCEPTED THE SAME ON THE GROUND THE COMPLETE DETAILS OF PAYEE WERE NOT SUBMITTED. 6. ON THE OTHER HAND, THE LEARNED SR. DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES. WE FIND THAT THE ISSUE IS COVERED BY DECISION OF HON`BLE SUPREME COU RT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LIMITED VS. CIT, (2007) 293 ITR 226 (SC) / [2007] 163 TAXMAN 355 (SC) WHEREIN FINDINGS GIVEN BY HON`BLE S UPREME COURT ARE AS UNDER: FACTS THE ASSESSEE WAS ENGAGED IN THE MANUFACTURE AND SAL E OF SOFT DRINKS. IT ENTERED INTO AN AGREEMENT WITH P FOR USE OF ITS PREMISES FOR RECE IPT, STORAGE AND DISPATCH OF GOODS BELONGING TO IT AND PAID WAREHOUSING CHARGES ON WHI CH TAX WAS DEDUCTED UNDER SECTION 194C AT 2 PER CENT. THE ASSESSING OFFICER HELD THAT THE WAREHOUSING CHARGES WERE IN THE M/S. PUNJAB NATIONAL BANK /I.T.A. NO. 1009/1010-10 11/IND/2016/A.Y.:09-10 AGE 4 OF 5 NATURE OF RENT AS DEFINED IN EXPLANATION TO SECTION 194-I AND, THEREFORE, TAX OUGHT TO HAVE BEEN DEDUCTED AT 20 PER CENT UNDER THE SAID PROVISI ONS AS AGAINST DEDUCTION OF TAX AT 2 PER CENT UNDER SECTION 194C. THE ASSESSING OFFICER, THE REFORE, HAVING HELD THE ASSESSEE TO BE ASSESSEE-IN-DEFAULT FOR THE SHORTFALL IN THE AMOUNT OF TAX DEDUCTED AT SOURCE, LEVIED INTEREST UNDER SECTION 201(1A) ON THE AMOUNT OF TAX ALLEGED TO BE SHORT-DEDUCTED. ON APPEAL, THE COMMISSIONER (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER. ON FURTHER APPEAL, THE TRIBUNAL CONFIRMED THE ORDER OF THE COMMISSIONER (APPEALS). THE FURTHER APPEAL FILED BY THE ASSESSEE WAS ALSO DISMI SSED BY THE HIGH COURT. THEREAFTER, THE ASSESSEE FILED AN APPLICATION UNDER SECTION 254(2) FOR RECTIFICATION OF THE ORDER OF THE TRIBUNAL ON THE GROUND THAT ITS ALTERNATIVE CONTENT ION THAT THE WAREHOUSE HAD BEEN ASSESSED ON ITS INCOME AND THE TAX DUE HAD BEEN REC OVERED FROM IT BY THE DEPARTMENT AND ALSO IT HAD RECEIVED REFUND FROM THE DEPARTMENT AND , THEREFORE, NO FURTHER TAX COULD HAVE BEEN COLLECTED FROM IT, HAD NOT BEEN CONSIDERED BY THE TRIBUNAL. THE TRIBUNAL WHILE ALLOWING ASSESSEES APPLICATION HELD THAT THERE WAS A MISTAKE APPARENT ON THE FACE OF RECORD AND, THEREFORE, CONSTITUTED A RECTIFIABLE MI STAKE UNDER SECTION 254(2) AND, HE, ACCORDINGLY, RECALLED ITS EARLIER ORDER AND HELD TH AT THE TAX ONCE AGAIN COULD NOT BE RECOVERED FROM THE ASSESSEE SINCE THE TAX HAD ALREA DY BEEN PAID BY THE RECIPIENT OF INCOME. ON REVENUES APPEAL, THE HIGH COURT HELD TH AT THE TRIBUNALS EARLIER ORDER GOT ITSELF MERGED INTO THE ORDER PASSED BY IT DISMISSIN G THE APPEAL OF THE ASSESSEE AND, THEREFORE, THE TRIBUNAL COULD NOT HAVE REOPENED THE MATTER FOR ANY FURTHER HEARING. ON APPEAL TO THE SUPREME COURT : HELD THE CIRCULAR NO. 275/201/95-IT(B), DATED 29-1-1997 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES WOULD PUT AN END TO THE CONTROVERSY. T HE CIRCULAR DECLARES THAT NO DEMAND VISUALIZED UNDER SECTION 201(1) SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED THE OFFICER-IN-CHARGE OF TDS THAT TAXES DUE HAVE BE EN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARG E INTEREST UNDER SECTION 201(1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE O R THE LIABILITY FOR PENALTY UNDER SECTION 271C. [PARA 10] IN THE INSTANT CASE, THE ASSESSEE HAD PAID THE INTE REST UNDER SECTION 201(1A) AND THERE WAS NO DISPUTE THAT THE TAX DUE HAD BEEN PAID BY P . IT WAS NOT DISPUTED THAT THE CIRCULAR WAS APPLICABLE TO THE FACTS SITUATION AT HAND. [PARA 11] HENCE, THE JUDGMENT OF THE HIGH COURT WAS, ACCORDIN GLY, SET ASIDE. THE APPEAL WAS TO BE ALLOWED. M/S. PUNJAB NATIONAL BANK /I.T.A. NO. 1009/1010-10 11/IND/2016/A.Y.:09-10 AGE 5 OF 5 8. THUS, WE FIND THAT ABOVE DECISION LAID DOWN THE RAT IO THAT WHEN THE TAX HAS BEEN PAID BY THE DEDUCTEE-ASSESSEE, THE TAX COULD N OT BE RECOVERED ONCE AGAIN FROM THE ASSESSEE. IT IS THE CLAIM OF THE ASSESSEE SOCIETY THAT THE DEDUCTEE HAS PAID THE TAXES , HENCE, THE ASSESSEE IS NOT LIABLE TO BE FOR DEMAND ON ACCOUNT OF SHORT DEDUCTION OF TDS. HOWEVER, THIS CLAIM IS NOT FULLY VERIFIED BY THE LOWER AUTHORITIES. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, THIS ISSUE IS RESTORED BACK TO THE FILE OF AO WITH THE DIRECTION THAT THE AO SHALL VERIFY WHETHER THE SHORT DEDUCTION ON ACCOUNT OF LOW RATE OF TDS HAS BEEN PA ID BY THE PAYEE / DEDUCTEE/ RECIPIENT AND THEY HAVE SHOWN THE RECEIPT IN THE TH EIR RETURN OF INCOME. IF THAT BE SO , NO DEMAND ON ACCOUNT OF SHORT DEDUCTION CAN B E CLAIMED FROM THE ASSESSEE. THEREFORE, ALL THESE FACTS REQUIRE VERIFICATION AT THE END OF AO. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND MUST PRO DUCE ALL THE RELEVANT EVIDENCES BEFORE THE AO. THE AO IS FURTHER DIRECTED TO VERIFY THE SAME AND DECIDE THE MATTER AFRESH KEEPING IN MIND THE DECISION OF H ON'BLE SUPREME COURT CITED SUPRA AND CBDT CIRCULAR F. NO. 275/201/95-IT(B) DTD . 29.01.1997. ACCORDINGLY, ALL THE GROUNDS OF APPEAL ARE ALLOWED FOR STATISTICAL P URPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE, ALLOWED FOR STATISTICAL PURPOSES. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.20 17 SD/- SD/- (C.M.GARG) JUDICIAL MEMBER (O.P.MEENA) ACCOUNTANT MEMBER DATED : MARCH 22, 2017/OPM.