ITO, New Delhi V. M/s Exide Industries Ltd., New Delhi

ITA 1205/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4058 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-05-2011
• Assessment Year: misc
• Appeal Filed On: 08-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Section: 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.1205/D/2011 ASSESSMENT YEAR :2005-06 INCOME TAX OFFICER, VS. M/S EXIDE INDUSTRIES LTD. , WARD 49(4), EXIDE HOUSE, 3/E/1, NEW DELHI JHANDEWALAN EXTN., N.D. PAN NO.AAACE6641E TAN NO.DELE01858D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y. KAKKAR, SR. DR RESPONDENT BY : NONE ORDER PER K.G. BANSAL: AM: THE REVENUE HAS RAISED TWO GROUNDS IN THE APPEAL WHICH READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WEL L AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN:- I) HOLDING THAT INTEREST U/S 201(1A) CAN NOT BE CHARG ED FROM THE DEDUCTOR ASSESSEE WHEN THE DEDUCTEES HAVE PAID TAXES ON THE INCOME RECEIVED FROM THE DEDUCTOR AND THE DEMAND RAISED U/S 201(1) HAS BEEN REDUCED TO NIL. II) HOLDING THAT IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF M/S HINDUSTAN COCO COLA BEVERAGES (P) LTD. NO INTEREST U/S 201(1A) WILL BE CHARGEABLE FROM THE DEDUCTOR IF THE DEDUCTEE ASSESSEE HAS PAID ADVANCE TAX ON THAT INCOME, WHEREAS NO WHERE IN THIS ORDER THE HONBLE APEX COURT HAS HELD THAT IF THE DEDUCTEE PAYS ADVANCE TAX THEN NO INTEREST U/S 201(1A) CAN BE CHARGED. 2. THE FACTS OF THE CASE ARE THAT SURVEY U/S 133A WAS CA RRIED OUT AT THE PREMISES OF THE ASSESSEE ON 13.02.2007, IN WHICH SOME DEFAULTS 1205-2011-EIL 2 REGARDING TAX DEDUCTION AT SOURCE WERE NOTED. AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER CHARGED INTEREST OF `8,55,24 4/- U/S 201(1) AND `4,61,831/- U/S 201(1A). THUS, DEMAND OF `13,17,075/- WAS RAISED, THE DETAILS OF WHICH ARE AS UNDER:- SHORT DEDUCTION U/S 201(1) INTEREST U/S 201(1A) TOTAL 6,442 3,478 8,48,802 4,58,353 8,55,244 4,61,831 13,17,075 2.1 THEREAFTER, IT WAS FOUND THAT THE TAX OF `8,48,8 02/- HAD BEEN PAID BY THE PAYEE. THEREFORE, IT WAS CONCLUDED THAT THE ASSESSEE COULD NOT BE HELD TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF THIS A MOUNT. ACCORDINGLY, INTEREST REFERABLE TO THIS AMOUNT WAS DEL ETED. THUS, THE DEMAND WAS REDUCED TO `4,68,273/-. 3. THE MATTER WAS AGITATED BEFORE THE LEARNED CIT(A) . HIS FINDINGS ARE AS UNDER:- 3. I HAVE CONSIDERED THE ARGUMENTS OF THE APPELLANT AS WELL AS THE ORDER PASSED BY THE ASSESSING OFFICER. IN PAR A 2.1 OF THE ORDER PASSED BY THE ASSESSING OFFICER U/S 154/201(1)/201(1A), IT IS NOTICED THAT THE ASSESSING OFF ICER HAS STATED THAT THE DEMAND RAISED U/S 201(1) READ WITH SECTION 1941 ON THE C&F EXPENSES AS SHORT DEDUCTION FOR FINANCIAL YEAR OF `8,48,802/- IS REDUCED TO NIL. WH EN THE DEDUCTION OF `8,48,802/- IS ALLOWED TO BE NIL, THEN THERE IS NO QUESTION ARISE TO CHARGE INTEREST ON THIS AMOUNT. T HERE SHOULD NOT BE ANY INTEREST U/S 201(1A) OF THE INCOME-T AX ACT. AS REGARDS DEMAND OF `9,920/- THE APPELLANT HAD PAID THE TAXES. THE ASSESSING OFFICER IS DIRECTED TO GIVE REL IEF U/S 201(1A) AS INTEREST CHARGED ON THE AMOUNT OF `8,48,802/- AND BALANCE DEMAND OF `9,920/- WAS PAID BY THE APPELLANT, THE OUTSTANDING DEMAND BE TREATED AS N IL. AS FAR AS THE DEMAND RAISED BY THE ASSESSING OFFICER U/S 201(1A) AND 220(2) IS CONCERNED, THE APPELLANT GE TS 1205-2011-EIL 3 RELIEF ON THE SUPREME COURTS DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. CONSIDERING TH E ARGUMENTS TAKEN BY THE APPELLANT AND /THE DECISION OF THE SUPREME COURT, THE DEMAND RAISED BY THE ASSESSING OFFICER U/S 201(1A) AND INTEREST U/S 220(2) OF `14,049 /- IS DELETED. 3.1 AGGRIEVED BY THIS ORDER, THE REVENUE IS IN APPEAL BEFORE US. THE GROUNDS TAKEN BY THE REVENUE HAVE ALREADY BEEN REPRO DUCED BY US. 4. NONE ATTENDED ON BEHALF OF THE ASSESSEE TO CLARIFY T HE MATTER. HOWEVER, THE LEARNED DR SUBMITTED THAT THE ISSUE STANDS COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LTD., (2007) 293 ITR 226, THE OPE RATIVE PORTION READS AS UNDER:- 10. BE THAT AS IT MAY, CIRCULAR NO.275/201/95-IT(B) DATED JANUARY 29, 1997, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IN OUR CONSIDERED OPINION SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES NO DEMAND VISUALIZED U/S 201(1) OF THE INCOME-TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED THE OFFICER-IN-CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY OF CHARGE INTEREST U/S 201(1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXE S BY THE DEDUCTEE-ASSESSEE OR THE LIABILITY FOR PENALTY U/S 271C OF THE INCOME-TAX ACT. 11. IN THE INSTANT CASE, THE APPELLANT HAD PAID THE I NTEREST U/S 201(1A) OF THE ACT AND THERE IS NO DISPUTE THAT TH E TAX DUE HAD BEEN PAID BY THE DEDUCTEE-ASSESSE (M/S PRADEEP OIL CORPORATION). IT IS NOT DISPUTED BEFORE US THAT .THE CIRCULAR IS APPLICABLE TO THE FACTS SITUATIO N ON HAND. 12. IN THE CIRCUMSTANCES, IT IS NOT NECESSARY TO GO IN D ETAIL AS TO WHETHER THE TRIBUNAL COULD HAVE AT ALL REOPENE D THE APPEAL TO RECTIFY THE ERROR APPARENT ON THE FAC E OF THE RECORD. WE DO NOT WISH TO EXPRESS ANY FIRM VIEW ON THIS ASPECT. 1205-2011-EIL 4 13. THE IMPUGNED JUDGMENT OF THE HIGH COURT IS ACCORDINGLY SET ASIDE. THE APPEAL IS ALLOWED WITH NO ORDER AS TO COSTS. 4.1 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSI ONS MADE BEFORE US. THE GIST OF THE DECISION OF HONBLE SUPREM E COURT BASED UPON BOARD CIRCULAR NO.275/201/95-IT(B) DATED 29.01 .1997 IS THAT IF A PERSON FAILS TO DEDUCT TAX AT SOURCE, THERE IS A SHORTAG E IN DEDUCTION OF TAX AT SOURCE, OR HAVING DEDUCTED TAX AT SOURCE FAILS TO DEPOSIT THE SAME TO THE CREDIT OF THE CENTRAL GOVERNMENT AS PROVI DED, HE SHALL BE TREATED TO BE AN ASSESSEE IN DEFAULT. HOWEVER, IF THE PAYEE PAYS THE TAX ON THE INCOME ON WHICH TAX WAS NOT DEDUCTED, SHOR T DEDUCTED OR NOT PAID, THE AMOUNT IN RESPECT OF WHICH HE WAS DEEME D TO BE AN ASSESSEE IN DEFAULT SHALL NOT BE COLLECTED FROM HIM. TH E REASON IS THAT THE SAME TAX CANNOT BE COLLECTED BOTH FROM THE PAYER AND THE PAYEE. THE PAYMENT OF TAX BY THE PAYEE SHALL, HOWEVER, NOT ALTER THE LIABILITY REGARDING INTEREST U/S 201(1A) FROM THE DATE OF DEFAU LT COMMITTED BY THE PAYER TO THE DATE OF PAYMENT BY THE PAYEE. 4.2 COMING TO THE GROUNDS, IT IS MENTIONED THAT THE A FORESAID DECISION NOWHERE MENTIONS THAT IF THE PAYEE PAYS THE A DVANCE TAX, THEN NO INTEREST SHALL BE CHARGED U/S 201(1A). WE ARE OF THE VIEW THAT THIS POSITION WILL HAVE TO BE SEEN WITH REFERENCE TO T HE DATE OF DEFAULT IN CASE OF THE PAYER AND DATE OF ADVANCE TAX PAID BY THE PAYEE. THUS, THERE COULD BE A SITUATION WHERE THE TWO DATES COINCI DE. IN SUCH A CASE, NO INTEREST WILL BE CHARGEABLE AS THE TAX HAS BEE N PAID BY WAY OF ADVANCE TAX BY THE PAYEE RATHER THAN BY WAY OF TAX DEDUCTION AT SOURCE BY THE PAYER. HOWEVER, IF THE DATE OF PAYMEN T OF ADVANCE TAX IS SUBSEQUENT TO THE DATE ON WHICH DEFAULT WAS COMMITTE D, INTEREST WILL BE CHARGEABLE FOR THE PERIOD OF THE DEFAULT. AS ALL THE FACTS ARE NOT AVAILABLE WITH US, THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING 1205-2011-EIL 5 OFFICER FOR RE-COMPUTATION OF INTEREST CHARGEABLE, I F ANY, IN THE LIGHT OF AFORESAID DECISION. 5. IN RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 06.05.2011 . SD/- SD/- ( C.L. SETHI ) ( K.G. BANSA L ) JUDICIAL MEMBER ACCOUNTANT ME MBER DT.06.05.2011. NS COPY FORWARDED TO:- 1. INCOME TAX OFFICER, WARD 49(4), NEW DELHI. 2. M/S EXIDE INDUSTRIES LTD., EXIDE HOUSE, 3/E/1, JHAND EWALAN EXTENSION, NEW DELHI. 3. THE CIT 4. THE CIT (A), NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY BY ORDER (ITAT, NEW DELHI).