Sovereign Pharma Private Limited, Pune V. DCIT CPC TDS, Pune

ITA 1216/PUN/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7350 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-04-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 19-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH BUDRUK
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE [THROUGH VIRTUAL HEARING] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.1216/PUN./2023 [E-APPEAL] Assessment Year 2019-2020 Sovereign Pharma Private Limited, Sarosh Bhavan, 160B/1, Dr. Ambedkar Road, Pune – 411 001. Maharashtra. PAN AAHCS6304H vs. The DCIT, CPC, TDS Circle, Pune – 1, PUNE. Maharashtra. (Appellant) (Respondent) For Assessee : Shri Nikhil Patakh For Revenue : Shri Ganesh Budruk Date of Hearing : 18.04.2024 Date of Pronouncement : 08.05.2024 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for assessment year 2019-2020, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No.ITBA/NFAC/S/250/2023- 24/1056347841(1), dated 21.09.2023, involving proceedings u/s. 200A of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The assessee raises the following substantive grounds in the instant appeal : 2 ITA.No.1216/PUN./2023 3 ITA.No.1216/PUN./2023 2.1. Learned counsel further invited our attention to the assessee’s additional ground in the instant appeal reading as under: 3. The Revenue vehemently objected to admission of the assessee’s foregoing additional ground by raising technical objection that same could not be allowed at this belated stage. This tribunal’s Special Bench decision in All Cargo Global Logistics Ltd. vs. DCIT [2012] 137 ITD 287 (Mum.) (SB) has settled the law in light of National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC), we can very well entertain an additional ground going to root of the matter in order to determine correct tax liability of the assessee provided all the relevant facts are already on record. The assessee’s foregoing additional ground hardly meets any factual verification. The same stands admitted. 4. Both the learned representatives next invited our attention to the NFAC’s detailed discussion declining the assessee’s lower appeal as under : 4 ITA.No.1216/PUN./2023 5 ITA.No.1216/PUN./2023 6 ITA.No.1216/PUN./2023 7 ITA.No.1216/PUN./2023 We now advert to the relevant facts. 5. There is hardly any dispute between the parties that the assessee-deductor had paid salary/fixed remuneration to it’s Managing Director Mr. Kairus Dadachanji @ 20% of the net profits. It admittedly credited the impugned sum in the corresponding salary account on 31.03.2019 followed by actual payment thereof on 25.07.2019. There is hardly any issue between the parties that in the event of TDS deduction u/sec.192 of Chapter-XVII of the Act in case of salary reimbursement(s), applies “at the time of payment” only. 6. Coming to the foregoing sole issue between the parties; the assessee had filed it’s TDS return in form-24Q regarding the impugned salary. A perusal of the impugned processing dated 18.08.2019 [pages 7 to 8] in the case record indicates that the CPC’s intimation u/sec.154 of the Act proceeded on the basis of assessee’s date of credit of the foregoing remuneration i.e., 8 ITA.No.1216/PUN./2023 31.03.2019 to raise the corresponding demand of Rs.5,16,892/- in the nature of “additional late deduction/collection default” u/sec.201(1A) of the Act. Needless to say, the learned NFAC has gone a step further in holding that the assessee’s remuneration paid to Mr. Kairus Dadachanji in fact amounts to commission requiring TDS deduction u/sec.194(1)(ba) of the Act. This leaves the assessee aggrieved. 7. It is in this factual backdrop that we first advert to the assessee’s additional ground challenging learned NFAC’s jurisdiction in changing head of it’s payment from salary disclosed in form-24Q to commission in proceedings u/sec.154 r.w.s.200A of the Act. Learned counsel invited our attention to the corresponding specific statutory provision regulating processing of the TDS statements u/sec.200A of the Act reading as under : “200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section-200, such statement shall be processed in the following manner, namely:— (a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the statement; or (ii) an incorrect claim, apparent from any information in the statement; 9 ITA.No.1216/PUN./2023 (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; (c) the fee, if any, shall be computed in accordance with the provisions of section-234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section-200 or section-201 or section-234E and any amount paid otherwise by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor specifying the sum determined to be payable by, or the amount of refund due to, him under clause (d); and (f) the amount of refund due to the deductor in pursuance of the determination under clause (d) shall be granted to the deductor: Provided that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the statement is filed. Explanation.—For the purposes of this sub-section, "an incorrect claim apparent from any information in the statement" shall mean a claim, on the basis of an entry, in the statement— (i) of an item, which is inconsistent with another entry of the same or some other item in such statement; (ii) in respect of rate of deduction of tax at source, where such rate is not in accordance with the provisions of this Act. 10 ITA.No.1216/PUN./2023 (2) For the purposes of processing of statements under sub- section (1), the Board may make a scheme for centralised processing of statements of tax deducted at source to expeditiously determine the tax payable by, or the refund due to, the deductor as required under the said sub-section.” 8. The assessee’s case in light of the above extracted provision is that the NFAC has no jurisdiction to change the “head” of the corresponding TDS provision; and more particularly; from “salary u/sec.192” to “commission u/s.194A” of the Act in these facts and circumstances. 9. Learned CIT-DR’s case in light of sec.251(1)(a) of the Act is that such an enhancement falls within the inherent jurisdiction of the lower appellate authority. 10. We hardly see any reason to cause our agreement with the Revenue’s arguments supporting the learned NFAC’s foregoing directions invoking sec.194A qua assessee’s salary payment(s) attracting TDS deduction u/sec.192 of the Act as sec.200A appears to be in the nature of a complete code in itself for the purpose of processing of TDS returns. Faced with this situation, we invoke stricter interpretation thereof as per Commissioner of Customs vs. Dilip Kumar And Co. & Ors. [2018] 0 SCC 1 (SC) (FB). And that sec.200A of the Act is a specific provision having overriding effect over all other general provisions going by the principle of ‘Generalis Specialibus non Derogant’. 11 ITA.No.1216/PUN./2023 11. The Revenue’s next plea is that nothing prevents the learned field authorities to make such an adjustment in case of an incorrect claim u/sec.200A(a)(ii) r.w.s. Explanation (ii) thereof. It’s instant latter plea is also found to be devoid of merits once Explanation-(i) and (ii) to Sec.200A itself specify the scope thereof to any mutually inconsistent items vis-à-vis another entry in form- 24Q or qua rate of deduction; respectively. There is no indication that sec.200A “processing” could in any way change head of the TDS applicability; whatsoever. We thus conclude that once the assessee having deducted TDS u/sec.192 of the Act “at the time of payment”; the CPC’s intimation going by the date of credit i.e., 31.03.2019 (supra) as well as the NFAC’s impugned action changing “salary” head to “commission”, have erred in law and on facts in raising the demand in issue. The same stands reversed. We accept the assessee’s foregoing main as well as additional ground(s) in very terms. Ordered accordingly. No other ground/argument has been pressed before us. 12. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 08.05.2024. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 08 th May, 2024 VBP/- 12 ITA.No.1216/PUN./2023 Copy to 1. The appellant 2. The respondent 3. The Pr. CIT, Pune concerned 4. D.R. ITAT, “B” Bench, Pune. 5. Guard File. //By Order// //True Copy // Sr. Private Secretary, ITAT, Pune Benches, Pune.