Chief Medical Officer, District Health Society (NRHM), Kanpur V. Income Tax Officer(TDS)-I, Kanpur

ITA 122/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1085 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHASHI KUMAR BAJPAI
• Section: 194C; 201(1)

Judgement Text

S IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 122/LKW/2017 ASSESSMENT YEAR: 2013 - 14 CHIEF MEDICAL OFFICER DISTRICT HEALTH SOCIET Y (NRHM) 100, GANDHI GRAM KANPUR NAGAR V. INCOME TAX OFFICER (TDS) KANPUR NAGAR T AN /PAN : AAAAZ1571A (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI SHASHI KUMAR BAJPAI, C.A. RESPONDENT BY: SHRI V. K. BORA, D.R. DATE OF HEARING: 12 0 3 201 8 DATE OF PRON OUNCEMENT: 19 0 3 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A) - II, KANPUR DATED 23/11/2016. 2 . THE GRIEVANCE OF THE ASSESSEE IS TWOFOLD I.E. (1) APPLICABILITY OF SECTION 1 94C AND (2) APPLICABILITY OF SECTION 194J OF THE INCOME - TAX ACT, 1961. THE ISSUES ARE ENUMERATED IN THE GROUNDS OF APPEAL BEFORE THE LD. CIT(A), WHICH ARE AS UNDER: - 1 . BECAUSE OF THE LD. ASSESSING OFFICER H AS ERRED IN LAW AND FACTS THAT WHATEVER FUNDS RECEI VED FROM THE GOVERNMENT AND FURTHER IT TRANSFERRED TO THE PRIVATE NGO'S UNDER THE SCHEME LAUNCHED BY THE CENTRAL GOVERNMENT UNDER NRHM PROGRAM FOR THE END USER/ BENEFICIARIES WHO GOT FREE OPERATION OF THEIR EYE'S AND TO REIMBURSE IT INDIVIDUALLY BY THE NGO 'S A SUM OF ITA NO.122/LKW/2017 PAGE 2 OF 4 RS. 1200/ - TO RS. 1500/ - FOR MEDICAL TREATMENT, CONSIDERED THAT SUCH TRANSFER OF FUNDS ARE TO BE TREATED AS EXPENDITURES WHICH ARE CONTRACTUAL IN NATURE AND ATTRACT TO THE PROVISION U/S 194C, FURTHER NO DEDUCTION OF TAX AT SOURCE WAS MADE IN SU CH TRANSFER OF FUNDS. HENCE T HE ASSESSEE IS LIABLE TO MAKE ID S THEREON AND IS DEEMED TO BE IN DEFAULT U/S 201(1) OF THE INCOME TAX ACT AND CHARGED INTEREST U/S 201(1A) THEREON. [TAX COMPUTED AND STAND LIABILITY OF RS. 2,37,905/ - CHARGED TAX @ 2% ON RS.1 ,18 ,95,250/ - PLUS INTEREST CHARGED RS.83 , 267/ - THEREON TOWARDS THE FUND TRANSFERRED TO THE PRIVATE NGO'S]. 2 . BECAUSE OF THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND CONTRARY TO THE FACTS OF THE CASE IN MAKING PAYMENT AS SALARY / REMUNERATION / HONORARIUM TO T HE CONTRACTUAL EMPLOYEES IRRESPECTIVE OF THE QUALIFIED PROFESSIONAL, TECHNICAL OR OTHERWISE, CONSIDERED IT WHILE PASSING THE ORDER THAT THE ENTIRE PAYMENTS ARE COVERED UNDER THE PROVISION OF U/S 194J OR 194C OF THE ACT AND NOT COVERED U/S 192 OF THE ACT AND PASSED AN ORDER THAT THE APPELLANT IS NOT MADE DEDUCTION OF TAX AT SOURCE AND/OR SHORT DEDUCTION OF TAX, HENCE THE ASSESSEE IS DEEMED TO BE IN DEFAULT U/S 201(1) OF THE INCOME TAX ACT AND CHARGED INTEREST U/S 201(1A) THEREON. [TAX COMPUTED AND STAND LIABILITY OF RS. 30,83,514/ - CHARGED TAX @ 10% ON RS. 3,08,35,136/ - PLUS INTEREST CHARGED RS. 10,79,230/ - THEREON]. 3 . THE LD. CIT(A) IN HIS ORDER REGARDING THIS ISSUE HAS STATED THAT DURING THE APPELLATE PROCEEDINGS LD. A.R. OF THE ASSESSEE WAS FAIR ENO UGH TO BRING IT ON RECORD THAT THE GROUNDS AND FACTS OF THE APPEAL UNDER CONSIDERATION ARE SIMILAR TO THAT OF ASSESSMENT YEAR 2012 - 13 WHICH HAS BEEN DISMISSED BY TH E LD. CIT(A) VIDE HIS ORDER IN APPEAL NO.CIT( A) - II/147/ITO(TDS) - II/14 - 15/394 DATED 13.01.201 6 AND RESPECTFULLY FOLLOWING THE DECISION FOR ASSESSMENT YEAR 20 12 - 13, TH E APPEAL WAS DISMISSED BY THE LD. CIT(A). ITA NO.122/LKW/2017 PAGE 3 OF 4 4 . AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF THE ASSESSEE PLACED ON RECORD THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2012 - 13 AND WIT H REGARD TO THE ISSUE UNDER SECTION 194C, THE TRIBUNAL HAS HELD AS FOLLOWS: - 9. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, DIS CUSSION MADE ABOVE AND THE DETAILED FINDING LD. CIT(A) ARE OF THE VIEW MAT ASSESSEE WAS REQUIRED TO DEDUCT TA X U/S 194C OF THE ACT ON THE PAYMENTS OF RS.33,22,250/ - MADE TO VARIOUS CONCERNS INCLUDING NGOS. WE, THEREFORE, FIND NO INFIRMITY IN THE FINDING OF CIT(A). THIS COMMON GROUND OF BOTH THE ASSESSEE ARE DISMISSED. 5 . SIMILARLY, WITH REGARD TO DEDUCTION UNDER S ECTION 194J, THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER WHICH IS AS UNDER: - 18. HOWEVER, AFTER GOING THROUGH THE DETAILED FINDING OF LD. CIT(A) AND MADE BY THE COUNSEL OF THE ASSESSEE AND ON PERUSAL OF SUCH PAYMENT APPEARING AT PAGES 12 TO 15 OF THE IMPUGNED ASSESSMENT ORDER WE ARE OF THE VIEW THAT THE PAYMENTS WHICH HAVE BEEN MADE TO THE PERSON POSSESSING DEGREE/CERTIFICATE OF COMPLETING PROFESSIONAL COURSE THEN SUCH PAYMENT IS TO BE TREATED AS PAID TOWARDS FEES FOR TECHNICAL/PROFESSION AL SERVICES SUBJECT TO TDS @ 10% U/S 194J OF THE ACT AND AS FAR AS REMAINING PERSONS ARE CONCERNED THE PAYMENT SHALL BE TREATED AS PAYMENT TOWARDS CONTRACT WORK WHICH REQUIRES DEDUCTION OF TAX AT SOURCE @ 1%. WE ACCORDINGLY RESTORE THIS ISSUE TO THE FILE O F THE ASSESSING OFFICER WITH A DIRECTION TO TAKE THE INFORMATION FROM ASSESSEE ABOUT THE ALLEGED 95% PERSON APPEARING IN THE ASSESSMENT ORDER AT PAGES 12 TO 15 AND TO EXAMINE THAT THE PAYMENT TO THE PERSONS POSSESSING PROFESSIONAL/TECHNICAL QUALIFICATION S HOULD ONLY BE SUBJECTED FOR TDS UNDER SECTION 194J OF THE ACT AND FOR THE REMAINING PERSONS DEDUCTION OF TAX AT SOURCE TO BE MADE UNDER SECTION 194C OF THE ACT @ 1% (SUBJECT TO AVAILABILITY OF PAN). 19. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.122/LKW/2017 PAGE 4 OF 4 6 . THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD. CIT(A). 7 . WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT FOR ASSESSMENT YEAR 2012 - 13 IN ASSESSEES OWN CASE THE ISSUE WITH REGARD TO SECTION 194C WAS DISMISSED AND DECIDED IN FAVOUR OF THE REVENUE. THE ISSUE WITH REGARD TO SECTION 194J WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. RESPECTFULLY FOLLOWING THE DECISION FOR ASSESSMENT YEAR 2012 - 13, WE DISMISS THE ISSUE RELATING TO SECTION 194C A ND THE ISSUE RELATING TO SECTION 194J IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 TH MARCH , 201 8 JJ: 1203 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR