JAIPUR METRO RAIL CORPORATION LIMITED, Jaipur V. DCIT, Jaipur

ITA 1076/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5573 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Opportunity of being heard; Assessment record

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1076/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 M/S. JAIPUR METRO RAIL CORPORATION LTD. KHANIJ BHAWAN, TILAK MARG, JAIPUR CUKE VS. THE DCIT (TDS) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: JPRJ 07610 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: NONE JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/02/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 15 /02/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), 35,NEW DELHI (CAMP OFFICE AT JAIPUR) DATED 09-09-20 16 FOR THE ASSESSMENT YEAR 2011-12 RAISING THEREIN GROUNDS OF APPEAL AS UNDER:- 1. THE LD. DCIT (TDS) HAD ERRED IN LAW AS WELL AS IN FACTS TO APPLY 194I ON THE ADVANCE RECOVERABLE F ROM RSMML AND TO RAISE THE DEMAND OF SHORT DEDUCTION OF TDS AND INTEREST THEREON OF RS. 5,32,340/- AND RS. 42,5 87/- RESPECTIVELY TOTALING TO RS. 5,74,927/-. ITA NO. 1076/JP/2016 M/S. JAIPUR METRO RAIL CORPORATION LTD. VS. DCIT (T DS ), JAIPUR 2 2. THE DCIT (TDS) HAS ERRED IN LAW IN NOT PROVIDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDER. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING IN SPITE OF SERVICE OF NOTICE FOR HEARING OF THE APPEA L ON 14-02-2017. CONSEQUENTLY THE BENCH IS LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MERITS, EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 3.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4. DECISION IN APPEAL:- 4.1 PERUSAL OF ASSESSMENT ORDER DATED 29.12.2011 R EVEALS THAT ANOMALIES IN TDS LIABILITIES OF THE APPELLANT WERE FOUND AS A RESULT ON THE SPOT VERIFICATION CARRIED OUT AT THE APPELLANTS PREMISES ON 16.11.2011. 4.2 THE ASSESSING OFFICER OBSERVED THAT DURING F.Y . 2010-11, THE APPELLANT HAD GIVEN A SUM OF RS. 53,23 ,416/- TO RSMM LTD. WHICH HE CONCLUDED WAS PAYMENT FOR RENT OF SPACE/OFFICE PREMISES. SINCE, THE APPELLANT HAD NOT DEDUCTED ANY TDS ON SUCH RENTAL, THE AO RAISED DEMAND U/S 1 94 I TO THE TUNE OF RS. 5,74,927/- U/S 201/201(1A) OF THE A CT. 4.3 BEFORE ME DURING APPELLATE PROCEEDINGS THE APP ELLANT HAS CONTENDED THAT THE SAID PAYMENT TO RSMML IS NOT IN THE NATURE OF RENT BUT ADVANCE FOR EQUIPMENT/ FURNITURE ETC. 4.4 IN ORDER TO VERIFY THE EXACT NATURE OF PAYMENT FROM ASSESSMENT RECORDS ETC. A REMAND REPORT WAS CALLED FROM THE AO VIDE THIS OFFICE LETTERS DATED 10.09.2015 AND R EMINDER ITA NO. 1076/JP/2016 M/S. JAIPUR METRO RAIL CORPORATION LTD. VS. DCIT (T DS ), JAIPUR 3 DATED 13.10.2015 VIDE REPLY DATED 20.10.2015, THE AO HAS SUBMITTED THAT TDS IS APPLICABLE ON PAYMENT OR CREDIT WHICHEVER IS EARLIER. HENCE, IN THE ABOVE CASE, EV EN IF IT IS A SECURITY DEPOSIT, OR ADVANCE RENT STILL TDS U/S 19 41 IS APPLICABLE IN THIS CASE AS HELD BY ASSESSING OFFICE R. THIS VIEW HAS ALSO BEEN UPHELD BY THE HONBLE DELHI HIG H COURT IN THE CASE OF REEBOK INDIAN CO. VS. CIT. 291 ITR 455 ( DELHI). 4.5 TAKING THE REMAND REPORT INTO CONSIDERATION AS WELL AS PER THE PROVISIONS OF TDS LIABILITY U/S 1941 OF THE ACT FOLLOWING CONCLUSIONS ARE DRAWN:- (I) THE APPELLANT IS A LESEE OF THE PREMISE/ FURNI TURE ETC. WHILE M/S RSMML IS LESSOR. (II) THESE EXISTS A RENT AGREEMENT BETWEEN THE APP ELLANT AND RSMML. (III) THE PAYMENTS MADE IS ON ACCOUNT OF RENTAL WHE THER GIVEN AS ADVANCE OR OTHERWISE. (IV) THE APPELLANT HAD A LIABILITY TO DEDUCT TDS U /S 1941 I OF THE ACT ON SUCH PAYMENT. THUS STATEMENT OF THE APPELLANT THAT RS. 50 LAKH OU T OF RS. 53,23,415/- IS IN THE NATURE OF SECURITY DEPOSI T ( INTEREST FREE) IS NOT CORRECT REPRESENTATION OF FACTS AS THE APPELLANT IS A PUBLIC CORPORATION AND CANNOT PARK SUCH HUGE FUND S, AND THAT TOO AS INTEREST FREE. MOREOVER THE SAID PAYMENTS ARE ON ACCOUNT OF RENT, HENCE TDS SHOULD HAVE BEEN DONE. 4.6 UNDER THE INCOME TAX ACT, EVERY PERSON HAVING TAXABLE INCOME HAS TO PAY TAX. THAT TAX ON TOTAL IN COME IS COLLECTED THROUGH DIFFERENT MEANS. TAX DEDUCTION A T SOURCE (TDS) IS ONE OF THE METHODS OF COLLECTION OF TAXES. THE STATUTORY PROVISIONS OF TDS IS THERE TO ENSURE THAT EMPLOYERS/DEDUCTOR, DO DEDUCT TAXES AND SUBMIT IT T O THE GOVERNMENT ACCOUNT WITHIN A GIVEN TIME FRAME, SO TH AT THE DEDUCTEE, CAN TAKE CREDIT FROM THE TAXES WHICH, IT HAS ALREADY ITA NO. 1076/JP/2016 M/S. JAIPUR METRO RAIL CORPORATION LTD. VS. DCIT (T DS ), JAIPUR 4 PAID. TDS THUS IS THE LIABILITY OF THE DEDUCTEE DIS CHARGED BY THE DEDUCTOR BECAUSE OF THE VARIOUS LIABILITY CAST UPON HIM BY THE STATUTE. 4.7 AS PER THE PROVISIONS OF SECTION 201(1A) OF THE ACT , AN ASSESSEE ALSO IS LIABLE TO PAY SIMPLE INTEREST A T THE PRESCRIBED RATE ON THE AMOUNT OF SUCH TAX (TDS AMO UNT) FROM THE DATE OF WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID. 4.7.1 THE SUPREME COURT IN THE CASE OF HINDUSTAN C OCA COLA BEVERAGE PVT. LTD. VS. CIT (2007) 163 TAXMAN 3 55 (HON'BLE SUPREME COURT) HAS HELD THAT TAX CANNOT BE RECOVERED FROM THE DEDUCTOR IF THE SAME HAS BEEN PA ID BY THE DEDUCTEE. HOWEVER THIS WOULD NOT ALTER THE LIABILIT Y TO CHARGE INTEREST U/S 201 (1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE. THE LIABILITY OF INTEREST WOULD CONTINUE TO ACCRUE TILL TAX AS WELL AS INTEREST IS ACTUALLY PAI D AND SUCH INTEREST IS PAID BEFORE FURNISHING THE QUARTERLY S TATEMENT FOR EACH QUARTER IN ACCORDANCE WITH THE PROVISION OF S UB SECTION (3) OF SECTION 200. THE TDS AMOUNT IS TO BE DEDUCTE D AND REMITTED BELONGS TO THE REVENUE/ GOVT., HENCE INTER EST U/S 201 (1A) IS CHARGED, SINCE THE ASSESSEE IS CONSIDER ED TO BE ENJOYING THE TDS AMOUNT WHICH BELONGS TO THE GOVT. IT IS PERTINENT TO NOTE THAT THE TAX SO DEDUCTED IS GIVEN CREDIT IN THE ACCOUNT OF THE DEDUCTEE-ASSESSEE. 4.8 IN VIEW OF THE ABOVE DISCUSSION, I UPHOLD THE O RDER OF THE AO DATED 29.12.2011 CONSIDERING THE APPELLANT AN ASSESSEE IN DEFAULT U/S 201/201(1A) OF THE ACT. CONSEQUENTLY, THE LD. CIT(A) UPHELD THE ACTION OF T HE AO THAT THE ASSESSEE IS IN DEFAULT U/S 201/201(1A) OF THE ACT. 2.2 I HAVE HEARD THE LD. DR AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOTED FROM THE RECORD THAT THE A SSESSEE HAS ALSO NOT ITA NO. 1076/JP/2016 M/S. JAIPUR METRO RAIL CORPORATION LTD. VS. DCIT (T DS ), JAIPUR 5 APPEARED BEFORE THE LD. CIT(A) DURING THE COURSE OF HEARING. HOWEVER, IN APPELLATE PROCEEDING BEFORE THIS BENCH, THE ASSESSE E HAS NOT FILED ANY SUBMISSION CONTROVERTING THE ORDERS OF LOWER AUTHOR ITIES. IN SUCH A SITUATION, I HAVE NO ALTERNATIVE EXCEPT TO CONCUR W ITH THE VIEWS OF THE LD. CIT(A) ON THE ISSUE IN QUESTION. THUS GROUND NOS. 1 AND 2 OF THE ASSESSEE ARE DISMISSED. 3.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 -02-20 17. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15 /02/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. JAIPUR METRO RAIL CORPORATION L TD. , JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT (TDS), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 1076/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR