Rajkot Municipal Corporation, RAJKOT-GUJARAT V. The Income Tax Officer, TDS-1, RAJKOT-GUJARAT

ITA 11/RJT/2010

• Counselvise Citation: 1124914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-07-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.11/RJT/2010 (ASSESSMENT YEAR 2008-09) RAJKOT MUNICIPAL CORPORATION VS ITO, TDS-1 DHEBERBHAI ROAD, RAJKOT RAJKOT PAN : AAALR0138G TAN : RKTRO0533B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DARSHAK THAKKAR RESPONDENT BY: SHRI AVINASH KUMAR O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-II, RAJKOT DATED 28-10-2009 AND PERTAINS TO ASSESSMENT YEAR 20 08-09 CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER U/S 201(1) & 201(1A) OF TH E ACT. 2. THIS APPEAL OF THE ASSESSEE WAS DISMISSED FOR NO N PROSECUTION BY AN ORDER DATED 20-01-2010. HOWEVER, THE ASSESSEE FILED MISC ELLANEOUS APPLICATION IN MA NO.12/RJT/2010. THE TRIBUNAL BY AN ORDER DATED 14- 05-2010 RECALLED THE ORDER DATED 20- 01-2010 AND ACCORDINGLY THE APPEAL WAS RESTORED ON FILE AND POSTED FOR HEARING ON 04- 07-2011. 3. SHRI DARSHAK THAKKAR, THE LD.REPREENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE ENGAGED THE CONTRACTORS FOR TRANSPORTING S TRAY CATTLE. THE ASSESSEE DEDUCTED TAX AT 2.27% FROM THE PAYEES U/S 194C OF THE ACT. HOWEVER, THE ITO, TDS WAS OF THE OPINION THAT THE ASSESSEE IS COVERED UNDER THE PROV ISIONS OF SECTION 194I OF THE ACT FROM 13-07-2006 AND THEREFORE, THE ASSESSEE OUGHT TO HAV E DEDUCTED TAX AT SOURCE AT 11.33%. THE ITO, TDS FOUND THAT THERE WAS A SHORT DEDUCTION OF TAX U/S 201(1) OF THE ACT TO THE EXTENT OF RS.3,15,831. ACCORDINGLY THE ITO, TDS HAS PASSED ORDER U/S 201(1) OF THE ACT DIRECTING THE ASSESSEE TO PAY AN AMOUNT OF RS.3,15,831. THE ITO, TDS HAS ALSO LEVIED INTEREST ON THE ASSESSEE U/S 201(1A) OF THE ACT. ACCORDING TO THE LD.REPRESENTATIVE FOR THE ASSESSEE, THE PAYEES HAD ALREADY PAID THE TAX ON THE CONTRACT ITA NO.11/RJT/2010 2 AMOUNTS PAID BY THE ASSESSEE. THEREFORE, ASKING TH E ASSESSEE TO PAY THE TAX AGAIN WOULD AMOUNT TO DOUBLE PAYMENT. REFERRING TO THE O RDER OF THE CIT(A), MORE PARTICULAR ON PAGE 5, THE LD.REPRESENTATIVE SUBMITTED THAT THE CIT(A) FOUND THAT THE ASSESSEE COULD NOT PRODUCE ANY SATISFACTORY EVIDENCE TO SHOW THAT THE TAXES DUE FROM THE PAYEES ARE DULY PAID, THE LD.REPRESENTATIVE SUBMITTED THAT THE COPIES OF THE RETURNS FILED BY THE PAYEES COULD NOT BE OBTAINED WHEN THE APPEAL WAS HE ARD BY THE CIT(A). HOWEVER, NOW THE ASSESSEE HAS COLLECTED THE COPIES OF THE RETURN S AND HAS FILED THE SAME BEFORE THIS TRIBUNAL WHICH WOULD CLEARLY SHOW THAT THE TAXES WE RE PAID BY THE PAYEES. THEREFORE, THERE IS NO QUESTION OF ANY PAYMENT OF TAX ONCE AGA IN BY THE ASSESSEE. REFERRING TO THE ORDER OF THE ASSESSING OFFICER PASSED U/S 201(1A) L EVYING INTEREST ON THE AMOUNT OF SHORT DEDUCTION, THE LD.REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER MADE REFUNDS TO THE CONTRACTORS ON ACCOUNT OF THE EXCESS TDS CREDITS. REFERRING TO THE JUDGMENT OF THE RAJASTHAN HIGH COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT LTD VS CIT (2007) 293 ITR 226 (RAJ), THE LD.REPRESENTATIVE SUB MITTED THAT ONCE THE TAXES WERE PAID BY THE DEDUCTEE, THERE WILL BE NO LIABILITY TO PAY INTEREST U/S 201(1A) OF THE ACT. THE LD.REPRESENTATIVE, AGAIN PLACED RELIANCE ON THE JUD GMENT OF THE RAJATHAN HIGH COURT IN CIT VS RAJASTHAN RAJYA VIDYUIT PRASARAN NIGAM LIMIT ED (2006) 287 ITR 354 )RAJ) AND SUBMITTED THAT THE RECIPIENT OF THE INCOME HAVE CLA IMED A REFUND WHICH IS ARISING DUE TO TAX DEDUCTED AT SOURCE. THEREFORE, THE RAJASTHAN H IGH COURT HELD THAT THERE IS NO QUESTION OF LEVY OF INTEREST U/S 201(1A) OF THE ACT . IN THIS CASE ALSO, THE DEDUCTEES CLAIMED REFUND DUE TO EXCESS PAYMENT OF TAXES, THER EFORE, INTEREST CANNOT BE LEVIED. 4. WE HAVE HEARD SHRI AVINASH KUMAR, THE LD.DR ALSO . HE SUBMITTED THAT HE IS PLACING RELIANCE ON THE ORDERS OF LOWER AUTHORITY. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAS ENGAGED THE SERVICES OF THE CONTRACTORS FOR TRANSPORTATION OF THE STRAY CATTLE. THE ASSESSEE DEDUCTED TAX AT 2.27% U/S 194C OF THE ACT. HOWEVER, THE ASSESSING OFFICE R FOUND THAT THE TAX OUGHT TO HAVE BEEN DEDUCTED AT 11.33% U./S 194I OF THE ACT. THE ASSESSEE IS NOT CHALLENGING BEFORE THIS TRIBUNAL THE APPLICABILITY OF PROVISIONS OF SE CTION 194I OF THE ACT. THE ONLY CONTENTION OF THE ASSESSEE IS THAT TAX WAS ALREADY PAID BY THE DEDUCTEES AND THEY HAVE ALSO RECEIVED THE REFUNDS OF THE EXCESS AMOUNTS DED UCTED AT SOURCE. THEREFORE, RELYING UPON THE JUDGMENTS OF THE RAJASTHAN HIGH COURT IN H INDUSTAN COCA COLA BEVERAGES PVT LTD VS CIT (SUPRA) AND CIT VS RAJASTHAN RAJYA VIDYU IT PRASARAN NIGAM LIMITED (SUPRA), ITA NO.11/RJT/2010 3 THE LD. REPRESENTATIVE CLAIMS THAT THERE IS NO QUES TION OF LEVY ONCE AGAIN AND THE CONSEQUENTIAL CHARGING OF INTEREST U/S 201(1A). TO PROVE THAT THE DEDUCTEES HAVE CLAIMED THE REFUND, THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS FILED THE COPIES OF THE RETURNS OF INCOME FILED BY THEM AND THE AMOUNTS OF REFUND CLAIMED THEREIN. THE LOWER AUTHORITY HAD NO OCCASION TO EXAMINE THE RETURNS FI LED BY THE DEDUCTEES AND TO FIND OUT WHETHER THEY HAVE ACTUALLY PAID THE TAXES OR NOT. IT ALSO NEEDS TO BE VERIFIED WHETHER THE RESPECTIVE DEDUCTEES HAVE CLAIMED REFUND DUE TO EXC ESS DEDUCTION OF TAX AT SOURCE OR OTHERWISE. SINCE THESE DOCUMENTS ARE NOT AVAILABLE BEFORE THE LOWER AUTHORITY, IN OUR OPINION, THESE DOCUMENTS NEED TO BE VERIFIED BY THE ITO, TDS AND TO FIND OUT WHETHER THE DEDUCTEES HAVE ACTUALLY PAID THE TAXES OR NOT. ACCORDINGLY WE SET ASIDE THE ORDER OF LOWER AUTHORITY AND REMAND THE MATTER BACK TO THE F ILE OF THE ITO, TDS. THE ITO, TDS SHALL VERIFY ALL THE MATERIAL FILED BY THE ASSESSEE AND BRING ON RECORD, WHETHER THE DEDUCTEES HAVE PAID THE TAXES OR NOT AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING OPPORTUNITY OF HE ARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15-07-2011. (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 15 TH JULY, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT