ACIT, C-2(1), Chandigarh V. M/s Sukham Infrastructure P. Ltd., Chandigarh

ITA 1167/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6687 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA
• Assessee Lawyers: AMITOZ SINGH C A
• Keywords: TDS
• Section: 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER ./ ITA NO. 1167/CHD/2018 / ASSESSMENT YEAR : 2014-15 THE ACIT, CSIRCLE 2(1), CHANDIGARH. VS M/S SUKHAM INFRASTRUCTURE P.LTD. SCO 123-124, 3 RD FLOOR, SECTOR 17-C, CHANDIGARH. ./ PAN NO. :AAJCS5706M / APPELLANT / RESPONDENT ! / REVENUE BY : SMT. CHANDERKANTA, SR.DR '# ! / ASSESSEE BY : SHRI AMITOZ SINGH, C.A. $ % #& / DATE OF HEARING : 21.01.2019 '()* #& / DATE OF PRONOUNCEMENT : 28.02.2019 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 25.06.2018 OF CIT(A)-I CH ANDIGARH PERTAINING TO 2014-15 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : I. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITIONS MADE BY THE A.O. ON NON-DEDUCTION OF IDS ON INTEREST ON DEVELOPMENT CHARGES ? II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) ERRED IN RELYING UPON THE ORDER OF THE HON'BLE ITAT IN THE CASE OF THE ASSESSEE FOR TH E AY 2012-13 WHERE HON'BLE ITAT HAS HELD THAT THE ASSESSEE HAS NOT ENTERED INTO A CONTR ACT WITH GAMADA BUT WITH THE PUNJAB GOVERNMENT THOUGHT UTILIZATION OF THE FUNDS AS WELL AS DISBURSEMENT WAS WITH GAMADA? III. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) ERRED IN RELYING UPON THE ORDER OF THE HON'BLE ITAT IN THE CASE OF THE ASSESSEE FOR THE AY 2012-13 WHERE HON'BLE ITAT HAS NOT TAKEN INTO ACCOUNT THAT MEGA PROJECTS, EDC CHAR GES WERE TO BE GIVEN TO GAMADA, TAXABLE ENTITY AND ALL DISPUTES ARISING THERE FROM HAD TO BE DEALT WITH GAMADA VIZ-A-VIZ THE ASSESSEE IN LATER NOTIFICATION DATED 19.09.2007? IV. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) ERRED IN RELYING UPON THE ORDER OF THE HON'BLE ITAT IN THE CASE OF THE ASSESSEE FOR TH E AY 2012-13 WHERE THE ITAT ORDER IS PERVERSE AS IT HAS GONE AGAINST THE OFFICE MEMORAND UM ISSUED BY CBDT DATED 23.12.2017? V. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF LATE PAY MENT OF PROVIDENT FUND AND ESI AS THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI WA S DEPOSITED AFTER DUE DATES AS PRESCRIBED BY THE ACT AND ACCORDINGLY IT WAS NOT AN ALLOWABLE DEDUCTION KEEPING IN VIEW THE EXPRESS PROVISIONS ENSHRINED U/S 36(1 )(VA) OF THE INCOME TAX ACT, 1961. ITA 1167/CHD/2018 A.Y. 2014-15 PAGE 2 OF 3 VI. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF LATE PAY MENT OF PROVIDENT FUND & ESI BY RELYING ON THE DECISION OF THE HON'BLE APEX COURT IN THE CA SE OF ALOM EXTRUSION LTD. AS THE CBDT'S CIRCULAR NO. 22/2015 HAS ALREADY CONSIDERED THE DEC ISION & CLARIFIED THIS ISSUE BY STATING THAT EMPLOYEE'S CONTRIBUTION IS TO BE DEPOSITED BEF ORE THE DUE DATES OF THE RELEVANT ACT. 2. BOTH THE PARTIES HAVE BEEN HEARD. LD. SR.DR REL IES UPON THE ASSESSMENT ORDER AND AUTHORIZED REPRESENTATIVE RELI ES UPON THE IMPUGNED ORDER. REFERRING TO THE DEPARTMENTAL GROU NDS ITSELF IT WAS SUBMITTED BY THE LD. AR THAT AS FAR AS THE PRESENT FORUM IS CONCERNED THE ISSUE IS COVERED IN FAVOUR OF THE ASS ESSEE. THE POSITION WAS NOT DISPUTED BY THE REVENUE. 3. SINCE ITS THE DEPARTMENTAL APPEAL THE LD. SR. A R WAS NEVERTHELESS REQUIRED TO REFER TO RELEVANT FACTS. INVITING ATTENTION TO THE ISSUES RAISED IN THE PRESENT APPEAL, LD. SR.DR SUBMITTED THAT THE FIRST ISSUE IS ADDRESSED IN GROUND NOS. 1 TO 4 AND THE FINDING UNDER CHALLENGE ALSO ADDRESSED IN GROUND NO 5 TO 6 IS ALS O EXTRACTED IN PARA 5.2 OF THE IMPUGNED ORDER. THOUGH PLACING REL IANCE UPON THE ASSESSMENT ORDER, LD. SR. DR DID NOT DISTINGUISH FR OM THE ORDER OF THE ITAT THE POSITION EITHER ON FACTS OR LAW. THE LD. AR INVITING ATTENTION TO THE COPY OF THE ORDER DATED 07.06.2018 SUBMITTED THAT CONSIDERING IDENTICAL FACTS, THE ITAT HAS CONCLUSIV ELY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE RELYING UPON THE OR DER OF THE CO- ORDINATE BENCH. THE RELEVANT PORTION IS EXTRACTED HEREUNDER: 22. THE PERUSAL OF THE ABOVE STATUTORY PROVISIONS OF SECTION 29 OF THE PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPME NT ACT, 1995, READ WITH NOTIFICATION DATED AUGUST 14,2006 REVEALS THAT THE GMADA HAS BEEN ESTABLISHED BY THE STATE ACT. AS P ER THE SUB SECTION (4)(1) OF SECTION 29, GMADA IS A BODY COR PORATE AS WELL AS LOCAL BODY. THE HON'BLE ALLABAHAD HIGH COURT IN THE CASE OF CIT (TDS) VS. CANARA BANK 386 ITR 504 (ALL.) HAS ELABORATELY DISCUSSED THE DISTINCTION BETWEEN A CORPORATION EST ABLISHED UNDER AN ACT AND BODY INCORPORATED UNDER AN ACT. THE HO N'BLE HIGH COURT WHILE REPLYING UPON THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF DALCO ENGINEERING (P.) LTD. V . SATISH PRABHAKAR PADHYE [2010] 4 SCC 378 HAS OBSERVED THAT A COMPANY INCORPORATED UNDER THE COMPANIES ACT IS NOT CREATE D BY THE COMPANY ACT BUT COMES INTO EXISTENCE IN ACCORDANCE WITH THE PROVISIONS OF THE SAID ACT AND THAT THERE WAS A WEL L-MARKED DISTINCTION BETWEEN BODY CREATED BY A STATUTE AND A BODY WHICH AFTER COMING INTO EXISTENCE IS GOVERNED IN ACCORDAN CE WITH THE PROVISIONS OF A STATUTE. THE HON'BLE HIGH COURT WH ILE DISCUSSING ABOUT THE STATUS OF NEW OKHLA INDUSTRIAL DEVELOPME NT AUTHORITY, NOIDA WHICH WAS ESTABLISHED UNDER THE UTTAR PRADES H INDUSTRIAL AREA DEVELOPMENT ACT, 1976 HAS HELD THAT THE SAID C ORPORATION (NOIDA) WAS ESTABLISHED BY THE STATE ACT AND, THER EFORE, WAS ENTITLED TO EXEMPTION PAYMENT OF TAX U/S 194A OF TH E ACT. THE ABOVE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IS SQU ARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AS THE G MADA HAS BEEN ITA 1167/CHD/2018 A.Y. 2014-15 PAGE 3 OF 3 CONSTITUTED BY THE STATE GOVERNMENT ACT AND IT HAS BEEN SPECIFICALLY PROVIDED THAT IT IS A BODY CORPORATE AND IN VIEW OF THE NOTIFICATION DATED OCTOBER 22, 1977 OF THE CENTRAL GOVERNMENT, THE GMADA FALLS UNDER THE DEFINITION OF ANY CORPORATION ESTAB LISHED BY THE CENTRAL, STATE OR PROVINCIAL ACT AND THUS THE PROVI SIONS OF SECTION 194A ARE NOT APPLICABLE. IN VIEW OF THIS, THE ASSES EEE WAS NOT LIABLE TO DEDUCT TDS WHILE REMITTING INTEREST ON DELAYED EDC CHARGES TO THE GMADA. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. IT IS SEEN THAT IN ITA 638/CHD/2015 AND OTHERS PERTAINING TO 2012-13 ASSESSMENT YEAR, THE CO-ORDIN ATE BENCH DISMISSED THE DEPARTMENTAL APPEAL ON IDENTICAL FACT S. THE RELEVANT PARA OF THE CO-ORDINATE BENCH HAS BEEN EXTRACTED HE REIN ABOVE. RELEVANT FINDING ARRIVED AT BY THE CIT(A) IN PARA 5 .2 IS REPRODUCED HEREUNDER : 5.2 I HAVE PERUSED THE ORDER OF THE AO AND EXAMI NED THE REPLY OF THE ASSESSEE. THE CASE IS COVERED BY THE DECISION OF HON'BLE ITAT WHICH HAS HELD (PARA 23) IN THE CASE OF THE APPELLANT IN A.Y. 2012-13 IN ITA NO . 638/CHD/2015 THAT '...THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS WHILE REMITTI NG INTEREST ON DELAYED EDC CHARGES TO THE GMADA.' IT HAS FURTHER BEEN HELD BY THE HON'BLE ITAT THAT '...THE EDC CHARGES OR INTEREST THEREON BY GMADA WAS NOT TH E TAXABLE INCOME OF THE GMADA.' BY RESPECTFULLY FOLLOWING THE DECISION OF H ON'BLE ITAT (SUPRA), IT IS HELD THAT THE ASSESSING OFFICER WAS NOT RIGHT IN DISALLO WING DEVELOPMENT FEE DUE TO NON- DEDUCTION OF TDS U/S 40(A)(IA) OF THE ACT. GROUND O F APPEAL NO. 2 IS ALLOWED. 5. IN THE ABSENCE OF ANY CHANGE IN THESE FACTS OR P OSITION OF LAW OR INFIRMITY POINTED OUT IN THE ORDER, I FIND T HAT THERE IS NO MERIT IN THE APPEAL OF THE REVENUE. ACCORDINGLY, T HE APPEAL OF THE REVENUE FAILS. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2019. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / RAVI KUMAR, PS (HYDERABAD) (+ #,- .-# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ /# / CIT 4. $ /# ( )/ THE CIT(A) 5. -01 #2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 / ASSISTANT REGISTRAR