General Manager (Telecom), BSNL, Bulandshahr V. ITO(TDS), Meerut

ITA 1118/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3805 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-06-2011
• Assessment Year: misc
• Appeal Filed On: 01-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SRUJANI MOHANTY
• Assessee Lawyers: K C KAUSHIK
• Keywords: Application of stay; TDS
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : FRIDAY : NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESI DENT AND SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NOS.1117 TO 1119/DEL/2011 ASSESSMENT YEAR : 2008 - 09 TO 2010 - 11 STAY APPLICATION NOS.36 TO 38/DEL/2011 (IN ITA NOS. 1117 TO 1119/DEL/2011) ASSESSMENT YEARS: 2008-09 TO 2010-11 GENERAL MANAGER (TELECOM), BSNL, BABU BANARASI DASS TRUST BUILDING, DELHI ROAD, BULANDSHAHR. PAN : MRTBO0695E VS. ITO (TDS), AAYAKAR BHAWAN, BHAISALI, 3 RD FLOOR, ROOM NO.316, MEERUT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. KAUSHIK, ADVOCATE REVENUE BY : MRS. SRUJANI MOHANTY, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THE ABOVE MENTIONED APPEALS ARE FILED BY THE ASSESSEE A ND THEY CAME UP FOR HEARING ALONG WITH THE STAY APPLICATIONS FILED FOR THE PRESENT YEARS IN WHICH THE ASSESSEE HAS BEEN SEEKING STAY O F FOLLOWING DEMANDS ARISING AS A RESULT OF THE IMPUGNED ORDERS PASSED BY THE ASSESSING OFFICER U/S 201(1) OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 8 TH JANUARY, 2010 FOR FINANCIAL YEARS 2007-08, 2008-09 AND 2009- 10 RELEVANT TO THE ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-2011 AND THESE DEMAND RAISED HAVE BEEN SUSTAINED BY THE LD. CIT (A):- ITA NOS.1117 TO 1119/DEL/2011 STAY APPLICATION NOS.36 TO 38/DEL/2011 2 A.Y RECHARGE COUPONS (FIGURES IN RS.) TDS NOT CHARGED/SHORT CHARGED SURCHARGE SURCHARGE INTEREST U/S 201(1A) TOTAL DEMAND 2008 - 09 2,33,436 23,343 7,703 60,830 3,25,312 2009 - 10 8,78,443 87,844 28,988 2,09,007 12,04,282 2010 - 11 4,30,027 43,002 14,190 48,721 5,35,930 TOTAL 15,41,906 1,54, 189 50,881 3,18,558 20,65,524 2. THESE APPEALS ARE DIRECTED AGAINST THE CONSOLIDATED ORDER PASSED BY THE CIT (A) DATED 29 TH DECEMBER, 2010 IN RESPECT OF ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-2011. 3. A SEARCH WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 17 TH DECEMBER, 2009. THE ASSESSEE IN THE PRESENT CASE IS BHARA T SANCHAR NIGAM LTD. WHICH IS PROVIDING TELECOM SERVICES IN BULA NDSHAHAR AND THE AREA COVERED UNDER THEIR JURISDICTION. THE SERVI CES ARE THE SALE OF MOBILES AND PRE PAID RECHARGE VOUCHERS TO THE FRANCHI SE AND ALSO THROUGH COUNTER SALE. IT WAS NOTICED DURING THE COUR SE OF SEARCH/VERIFICATION THAT THE ASSESSEE HAD SOLD RECHARGE PRE-PAID COUPONS TO THE FRANCHISE AND ALSO SOLD THROUGH THE COU NTER BUT NO TDS HAVE BEEN DEDUCTED FROM THE TRADE DISCOUNT GIVEN TO THE FRANCHISE AND ALSO TO THE CUSTOMERS WHO PURCHASED THE VOUCHERS A ND ACCORDING TO THE ASSESSING OFFICER, SUCH TRADE DISCOUNT GIVEN TO FR ANCHISE AND ALSO TO THE CUSTOMERS WAS LIABLE FOR DEDUCTION OF TAX U /S 194H OF THE ACT AND TO SUPPORT SUCH CONTENTION LD. ASSESSING OFFICER HAS RELIED UPON THE DECISION IN THE CASE OF M/S VODAFONE ESSAR CELL ULAR LTD. VS. ACIT (TDS) DATED 30 TH APRIL, 2009 BY THE COCHIN BENCH OF THE ITAT AND, IN THIS MANNER, THE DEMAND HAS BEEN CREATED IN RESPECT OF AFOREMENTIONED YEARS WHICH WAS MADE SUBJECT TO APPEAL FILED BEFORE THE CIT (A). IN ALL THESE APPEALS THE ASSESSEE HAS ASSAIL ED ITS LIABILITY FOR DEDUCTION OF TAX ON THE AFOREMENTIONED TRADE DI SCOUNT/COMMISSION ITA NOS.1117 TO 1119/DEL/2011 STAY APPLICATION NOS.36 TO 38/DEL/2011 3 WHICH HAS BEEN MADE SUBJECT TO TDS BY THE ASSESSING OFFI CER IN THE IMPUGNED ORDERS. 4. LD. CIT (A) HAS SIMPLY CONFIRMED THE DEMAND RAISED BY THE ASSESSING OFFICER. THE ASSESSEE IS AGGRIEVED, HENCE, HAS FILE D BEFORE US THE AFOREMENTIONED APPEALS ALONG WITH THE STAY APPL ICATIONS AS MENTIONED ABOVE. 5. AT THE OUTSET, IT WAS SUBMITTED BY LD. AR THAT ACCO RDING TO THE THIRD PROVISO TO SECTION 194H, THE ASSESSEE IS NOT LIABL E FOR ANY DEDUCTION OF TAX ON ANY COMMISSION OR BROKERAGE PAID BY IT TO ITS PUBLIC CALL OFFICE FRANCHISEES. HE SUBMITTED THAT THE CASE OF THE ASSESSEE HAS NOT BEEN CONSIDERED IN VIEW OF THE AFOREMENT IONED PROVISO AND IF THE PROVISO IS TAKEN INTO CONSIDERATION, THEN, THERE WILL BE NO LIABILITY OF THE ASSESSEE TO DEDUCT TAX AT SOURCE FROM SUCH COMMISSION. HE, THEREFORE, SUBMITTED THAT AS NEITHER A SSESSING OFFICER NOR THE CIT (A) HAS TAKEN INTO CONSIDERATION THE THIR D PROVISO TO SECTION 194H, THEREFORE, THE MATTER SHOULD BE RESTORED BACK T O THE FILE OF ASSESSING OFFICER TO CONSIDER THE CASE OF THE ASSESSEE UNDER THE SAID PROVISO. 6. ON THE OTHER HAND, LD. DR RELYING UPON THE ORDER OF THE ASSESSING OFFICER AND CIT (A) PLEADED THAT THE APPEALS F ILED BY THE ASSESSEE AS WELL AS THE STAY APPLICATIONS FILED BY IT SHOUL D BE DISMISSED. 7. WE HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS OF BO TH THE PARTIES. IT WILL BE RELEVANT HERE TO MENTION THAT A CCORDING TO SECTION 194H, IF THE PAYMENT IS MADE AS COMMISSION OR BROKERAGE BY ANY PERSON NOT BEING AN INDIVIDUAL OR HINDU UNDIVIDED FA MILY (HUF), THEN, HE IS LIABLE FOR DEDUCTION OF TAX AT THE TIME OF PAY MENT OF SUCH INCOME ITA NOS.1117 TO 1119/DEL/2011 STAY APPLICATION NOS.36 TO 38/DEL/2011 4 IN CASH OR BY ISSUE OF CHEQUE OR DRAFT OR BY ANY OTHER MODE. THE FIRST PROVISO CREATE AN EXCEPTION OF NO LIABILITY TO DEDUC T TAX IN CASE SUCH PAYMENTS IN AGGREGATE DO NOT EXCEED ` 5,000/- DURING THE FINANCIAL YEAR. SIMILARLY, THE SECOND PROVISO CAST AN OBLIGATI ON ON INDIVIDUALS OR HUF WHOSE SALES/GROSS RECEIPTS OR TURNOVER FROM THE BUSINE SS OR PROFESSION CARRIED ON BY THEM EXCEED THE MONETARY LIM ITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB FROM T HE FINANCIAL YEAR IMMEDIATELY PROCEEDING THE FINANCIAL YEAR IN WHICH SUCH COMMISSION OR BROKERAGE IS CREATED OR PAID, TO DEDUCT TAX AT THE P RESCRIBED RATE. THE THIRD PROVISO CREATE AN EXCEPTION THAT NO DEDUCTION SHALL BE MADE UNDER SECTION 194H ON COMMISSION OR BROKERAGE PAYABLE BY BHARAT SANCHAR NIGAM LTD. OR MAHANAGAR TELEPHONE NIGAM LTD . TO THEIR PUBLIC CALL OFFICE FRANCHISEES. 8. WE HAVE CAREFULLY GONE THROUGH THE IMPUGNED ORDE R PASSED BY THE ASSESSING OFFICER AND ALSO THE ORDER PASSED BY THE LD. CIT (A). THERE IS NO DISCUSSION REGARDING THE APPLICABILITY OR OTHERWISE OF THE THIRD PROVISO TO SECTION 194H. THE THIRD PROVISO, FO R THE SAKE OF CONVENIENCE, IS BEING REPRODUCED BELOW:- PROVIDED ALSO THAT NO DEDUCTION SHALL BE MADE UNDER TH IS SECTION ON ANY COMMISSION OR BROKERAGE PAYABLE BY B HARAT SANCHAR NIGAM LTD. OR MAHANAGAR TELEPHONE NIGAM LTD. TO THEIR PUBLIC CALL OFFICE FRANCHISEES. 9. THE ABOVE PROVISO WAS INSERTED BY THE FINANCE ACT, 2007 W.E.F. 1 ST JUNE, 2007. THEREFORE, THE SAID PROVISO WILL BE APP LICABLE TO THE YEARS UNDER CONSIDERATION. IF IT IS SO, THEN, WE FIND FORCE IN THE CONTENTION OF LD. AR THAT THE MATTER SHOULD BE RESTOR ED BACK TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE APPLICABILITY OR OT HERWISE OF THE AFOREMENTIONED PROVISO. THEREFORE, WE RESTORE THIS ISSU E TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION. THE ASSESSING OFFIC ER WILL GIVE REASONABLE AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO SHOW THAT THE ITA NOS.1117 TO 1119/DEL/2011 STAY APPLICATION NOS.36 TO 38/DEL/2011 5 PAYMENTS MADE BY IT WHICH HAVE BEEN SUBJECTED TO TDS IN THE IMPUGNED ORDER, ARE NOT LIABLE FOR DEDUCTION OF TAX U/S 194H DUE TO THE APPLICABILITY OF THE AFOREMENTIONED PROVISO. AFTER GIVING SUCH OPPORTUNITY, HE WILL RE-ADJUDICATE THE MATTER AS PER THE PROVISIONS OF LAW. WE DIRECT ACCORDINGLY. 10. IN VIEW OF THE ABOVE DISCUSSION, THE APPEALS FILED BY THE ASSESSEE ARE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURP OSES IN THE MANNER AFORESAID. 11. AS WE HAVE DECIDED THE APPEALS FILED BY THE ASSESSEE AND THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFICER, THE STAY APPLICATIONS FILED BY THE ASSESSEE HAVE BECOME INFRU CTUOUS AND THEY ARE DISMISSED. 12. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STATISTI CAL PURPOSES AND THE STAY APPLICATIONS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.06.20 11. SD/- SD/- [G.E. VEERABHADRAPPA] [I.P. BANSAL] VICE PRESIDENT JUDICIAL MEMBER DATED, 17.06.2011. DK ITA NOS.1117 TO 1119/DEL/2011 STAY APPLICATION NOS.36 TO 38/DEL/2011 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES