The Director Geology and Mining, Srinagar V. The Income Tax Officer, Srinagar

ITA 131/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7879 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAGAT
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 206AA; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER I.T.A NOS.131 & 132/(ASR)/2015 ASSESSMENT YEARS: 2011-12 & 2012-13 PAN: AMRD10886B THE DIRECTOR GEOLOGY AND MINING, BASERA HOME TRUST MAHJOOR NAGAR, SRINAGAR. VS. INCOME TAX OFFICER, WARD-3(A), AAYAKAR BHAWAN, RAJBAGH SRINAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M. R. BHAGAT RESPONDENT BY: SH. RAHUL DHAWAN (D.R.) DATE OF HEARING: 01.08.2017 DATE OF PRONOUNCEMENT: 03.08.201 7 ORDER PER T. S. KAPOOR (AM): THESE ARE TWO APPEALS FILED BY ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LD. CIT(A), JAMMU DATED 15.02.2013 FOR ASS T. YEARS: 2011-12 & 2012-13. 2. THE ASSESSEE HAS TAKEN SIMILAR GROUNDS IN RESPEC T OF THESE TWO APPEALS. FOR THE SAKE OF CONVENIENCE, THE GROUNDS O F APPEAL IN ITA NO. 131 ARE REPRODUCED BELOW. 1. THE ORDER PASSED UNDER SECTION 250(6) IS PERVER SE ILLEGAL AND NOT BASED ON PROPER APPRECIATION OF THE FACTS OF THE CASE AND THE LAW. 2. THE LEARNED CIT (A) ERRED IN NOT APPRECIATING THAT NO TAX WAS REQUIRED TO BE COLLECTED ON ROYALTY U/S 276C(1C) READ WITH SECT ION 206AA OF THE INCOME TAX ACT. THE ORDER MAY BE CANCELLED. ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 2 3. WITHOUT PREJUDICE TO GROUND NO.2, THE LD. CIT(A) FA ILED TO APPRECIATE THAT PROVISIONS OF SECTION OF 206AA WERE APPLICABLE TO P ERSONS TO WHO WERE TO DEDUCT TAX AND NOT ON THE PERSONS WHO WERE TO COLLE CT TAX AND THE CIT(A) ERRED IN CONFIRMING RATE OF 20% IN RESPECT OF PERSO N FROM WHOM TAX WAS COLLECTABLE @ 2% OF THE AMOUNT. 4. THE APPELLANT CRAVES LEAVE TO EMEND GROUND(S) BEFO RE THE APPEAL IS HEARD. 3. AT THE OUTSET, THE LD. AR INVITED OUR ATTENTION TO APPLICATION ALONG WITH AFFIDAVIT FOR CONDONATION OF DELAY IN FILING T HESE APPEALS. IT WAS SUBMITTED THAT APPELLATE ORDER WAS COLLECTED FROM T HE OFFICE OF LD. CIT(A) BY AN OFFICIAL OF THE APPELLANT DEPARTMENT ON 15.01 .2015 AND APPEAL WAS FILED WITHIN 60 DAYS OF THE RECEIPT OF APPELLATE OR DER. IT WAS SUBMITTED THAT SINCE THE ASSESSEE HAD NOT RECEIVED THE APPELLATE O RDERS BEFORE 15.01.2015, IT WAS PRAYED THAT THE DELAY IN FILING THE APPEALS MAY BE CONDONED. 4. THE LD. DR HAD NO OBJECTION IN CONDONATION OF TH E DELAY. FINDING THE REASON FOR DELAY IN FILING THE APPEALS REASONAB LE AND IN VIEW OF SUBSTANTIAL JUSTICE THE DELAY WAS CONDONED AND ASSE SSEE WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS. 5 THE LD. AR, SUBMITTED THAT THE ASSESSEE IS A GOVE RNMENT DEPARTMENT AND HAD TRANSFERRED ITS RIGHT OR INTERES T ON ACCOUNT OF SAND, BAJRI, STONES ETC. TO VARIOUS PERSONS. THE ASSESSEE WAS REQUIRED TO COLLECT A SUM EQUAL TO 2% OF THE AMOUNT COLLECTED FROM SUCH CONTRACTORS WHEREAS THE ASSESSING OFFICER AND LD. CIT(A) HAS HELD THAT TAX WAS REQUIRED TO BE DEDUCTED AT 20% OF SUCH PAYMENTS. THE LD. AR, IN TH IS RESPECT INVITED OUR ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 3 ATTENTION TO THE PROVISIONS OF SECTION 206C(1C) OF THE ACT WHICH PERTAIN TO COLLECTION OF INCOME TAX FROM PERSONS WHO ARE GRANT ED LEASE OR LICENSE. IT WAS SUBMITTED THAT SECTION 206AA IS APPLICABLE TO PERSO NS WHO ARE ENTITLED TO RECEIVE A SUM OF RUPEES ON WHICH TAX IS DEDUCTIBLE UNDER CHAPTER XVIIB OF THE ACT, WHEREAS THE CASE OF THE A PPELLANT WAS COVERED UNDER CHAPTER XVIIBB OF THE ACT, AND THEREFORE, THE PROVISIONS OF SECTION 206AA WERE NOT APPLICABLE TO THE FACTS OF THE CASE. THE LD. AR SUBMITTED THAT LD. CIT(A) ERRED TO CONFIRM ILLEGAL ORDER OF T HE ASSESSING OFFICER AND THEREFORE THE ASSESSMENT ORDER AS WELL AS THE APPEL LATE ORDER MAY KINDLY BE CANCELLED. 6. THE LD. AR FURTHER ARGUED THAT THE PROVISIONS OF SE CTION 206AA ARE APPLICABLE TO THE PERSONS WHO ARE ENTITLED TO RECEI VE ANY INCOME OR SUM ON WHICH TAX IS DEDUCTIBLE UNDER CHAPTER XVIIB OF THE ACT, WHEREIN HE HAS REQUIRED TO FURNISH PERMANENT ACCOUNT NO. TO THE PE RSONS RESPONSIBLE FOR DEDUCTING SUCH TAX AND FAILING WHICH TAX IS REQUIRE D TO BE DEDUCTED @ 20%. THE LD. AR FURTHER SUBMITTED THAT PROVISIONS O F SECTION 206C(1C) WERE APPLICABLE TO THE ASSESSEE WHICH FALLS UNDER C HAPTER XVIIBB OF THE ACT, AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE SAID PROVISIONS, THEREFORE, IT WAS ARGUED THAT THE ILLEGAL ORDER SUS TAINED BY LD. CIT(A) MAY BE CANCELLED. 7. WITHOUT PREJUDICE IT WAS SUBMITTED THAT IN THE A LTERNATIVE THE ASSESSING OFFICER SHOULD BE DIRECTED TO APPLY THE C ORRECT PROVISIONS OF LAW ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 4 WHICH ARE CONTAINED IN SECTION 206C(1C) OF THE ACT AND WHEREBY THE ASSESSEE WAS LIABLE FOR COLLECTION OF TAX @ 2%. 8. THE LD. AR FURTHER INVITED OUR ATTENTION TO THE PROVISIONS OF SECTION 206C(1C)/6A OF THE ACT AND SUBMITTED THAT IN CASE OF NON-COLLECTION OF SUCH TAX, THE ASSESSEE IS DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF THAT TAX. THE LD. AR FURTHER INVITED OUR ATTENTION TO THE PROVISO TO SECTION 206C(9C)6A WHEREIN IT HAS BEEN SAID THAT SUCH ASSES SEE SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF S UCH TAX IF THE LICENSEE OR CONTRACTORS HAD FURNISHED HIS RETURN OF INCOME U/S 139 AND HAS TAKEN INTO ACCOUNT SUCH AMOUNT FOR COMPUTING INCOME IN SU CH RETURN OF INCOME AND HAD PAID THE TAX DUE ON THE INCOME DECLARED IN SUCH RETURN OF INCOME AND THEREFORE IT WAS REQUESTED THAT ASSESSING OFFIC ER CAN BE DIRECTED TO VERIFY AS TO WHETHER SUCH CONTRACTORS HAD COMPLETED UNDER THE PROVISO TO SECTION 206C(9C)6A. 9. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT TH E ASSESSEE HAD NOT TAKEN THIS GROUND OF APPEAL BEFORE LD. CIT(A) AND T HEREFORE, HE SHOULD BE ASKED TO FIRST FILE ADDITIONAL GROUND OF APPEAL IF ANY, TO WHICH THE LD. AR INVITED OUR ATTENTION TO GROUND NO. 2 OF APPEAL TAK EN BY ASSESSEE BEFORE LD. CIT(A) AND SUBMITTED THAT ASSESSEE HAD TAKEN TH E GROUND THAT THE ORDER OF ASSESSING OFFICER WAS AGAINST FACTS AND LA W WHICH COVERED THE GRIEVANCE OF THE ASSESSEE AND THEREFORE, IT CANNOT BE SAID THAT ASSESSEE HAD NOT TAKEN THE GROUND BEFORE LD. CIT(A). THE LD. DR SUBMITTED THAT ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 5 ASSESSMENT ORDER MAY NOT BE CANCELLED AND SUITABLE DIRECTIONS CAN BE ISSUED TO ASSESSING OFFICER TO APPLY CORRECT PROVISIONS OF LAW. 10. THE LD. AR AGREED WITH THE PROPOSAL OF LD. DR. 11. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THOUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE IS A GOVERN MENT DEPARTMENT AND HAD ALLOTTED CERTAIN CONTRACTS TO VARIOUS PERSONS F ROM WHOM THE ASSESSEE WAS REQUIRED TO COLLECT TO 2% TAX AS TAX COLLECTED AT SOURCE AS PER PROVISIONS OF SECTION 206C(1C) OF THE ACT. THE ASSE SSEE WAS REQUIRED TO COLLECT TAX @ 2% OF THE PAYMENTS RECEIVED FROM SUCH CONTRACTORS. FOR THE SAKE OF CONVENIENCE THE PROVISIONS OF SECTION 206C AND (1C) ARE REPRODUCED BELOW: 206C. EVERY PERSON, BEING A SELLER SHALL, AT THE T IME OF DEBITING OF THE AMOUNT PAYABLE BY THE BUYER TO THE ACCOUNT OF THE B UYER OR AT THE TIME OF RECEIPT OF SUCH AMOUNT FROM THE SAID BUYER IN CASH OR BY THE ISSUE OF A CHEQUES OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, COLLECT FROM THE BUYER OF ANY GOODS OF THE NATURE SPECIFIED IN COLUM N,(2) OF THE TABLE BELOW, A SUM EQUAL TO THE PERCENTAGE, SPECIFIED IN THE COR RESPONDING ENTRY IN COLUMN(3) OF THE SAID TABLE, OF SUCH AMOUNT AS INCO ME-TAX. 206(1C) EVERY PERSON, WHO GRANTS A LEASE OR A LICE NSE OR ENTER INTO A CONTRACT OR OTHERWISE TRANSFERS ANY RIGHT OR INTERE ST EITHER IN WHOLE OR IN PART IN ANY PARKING LOT OR TOLL PLAZA OR MINE OR QUARRY, TO ANOTHER PERSONS, OTHER THAN A PUBLIC SECTOR COMPANY (HEREINAFTER IN THIS S ECTION REFERRED TO AS LICENSEE OR LESSEE) FOR THE USE OF SUCH PARKING L OT OR TOLL PLAZA OR MINE OR QUARRY FOR THE PURPOSE OF BUSINESS SHALL, AT THE TI ME OF DEBITING OF THE AMOUNT PAYABLE BY THE LICENSEE OR LESSEE TO THE ACC OUNT OF THE LICENSEE OR LESSEE OR AT THE TIME OF RECEIPT OF SUCH AMOUNT FRO M THE LICENSEE OR LESSEE IN CASH OR BY THE ISSUE OF A CHEQUES OR DRAFT OR BY AN Y OTHER MODE, WHICHEVER IS EARLIER, COLLECT FROM THE LICENSEE OR LESSEE OF ANY SUCH LICENSE, CONTRACT OR LEASE OF THE NATURE SPECIFIED INN COLUMN (2) OF THE TABLE BELOW, A SUM EQUAL TO THE PERCENTAGE, SPECIFIED IN THE CORRESPONDING E NTRY IN COLUMN (3) OF THE SAID TABLE, OF SUCH AMOUNT AS INCOME-TAX. ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 6 TABLE SI. NO. NAME OF CONTRACT OR LICENSE OR LEASE, ETC PERCENTAGE (1) (2) (3) (I) PARKING LOT TWO PER CENT (II) TOLL PLAZA TWO PER CENT (III) MINING AND QUARRYING TWO PER CENT THE ASSESSING OFFICER AND LD. CIT(A) APPLIED THE PR OVISIONS OF SECTION 206AA OF THE ACT WHICH MANDATES REQUIREMENT TO FURNISH PERMANENT ACCOUNT NUMBER BY PERSONS WHO ARE ENTITLE D TO RECEIVE ANY SUM OR INCOME OR AMOUNT, ON WHICH TAX IS DEDUCTIBLE U/S XVIIB OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF SECTION 206AA ARE ALSO REPRODUCED: 206AA. (1) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, ANY PERSON ENTITLED TO RECEIVE ANY SUM OR INCOME OR AMOUNT, ON WHICH TAX IS DEDUCTIBLE UNDER CHAPTER XVIIB (HEREIN AFTER REFERRED TO AS DEDUCTEE) SHALL FURNISH HIS PERMANENT ACCOUNT NUMB ER TO THE PERSON RESPONSIBLE FOR DEDUCTING SUCH TAX (HEREAFTER REFER RED TO AS DEDUCTORY), FAILING WHICH TAX SHALL BE DEDUCTED AT THE HIGHER O F THE FOLLOWING RATES, NAMELY:- (I) AT THE RATE SPECIFIED IN THE RELEVANT PROVISION OF THIS ACT; OR (II) AT THE RATE OR RATES IN FORCE;OR (III) AT THE RATE OF TWENTY PER CENT. FROM THE ABOVE PROVISIONS OF SECTION 206AA, WE FIND THAT THESE PROVISIONS ARE APPLICABLE FOR PERSONS WHO ARE ENTIT LED TO RECEIVE ANY INCOME WHEREAS THE PROVISIONS OF SECTION 206C ARE A PPLICABLE WHERE THE ASSESSEE RECEIVES AMOUNTS FROM THE CONTRACTORS TO W HOM CONTRACTS ARE AWARDED. THE ASSESSEE WAS LIABLE TO COLLECT TAX AS PER PROVISIONS OF SECTION 206(C) OF THE ACT AT THE RATES MENTIONED IN THE TAB LE CONTAINED U/S (IC) OF ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 7 THE ACT. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO APPLY THE CORRECT PROVISIONS OF LAW. WE FURTHER FIND THAT AS PER PROV ISIONS CONTAINED IN SECTION 206C(9C)6A FOR NON DEDUCTION OF SUCH TAX CO LLECTED AT SOURCE THE PERSON RESPONSIBLE FOR COLLECTION OF SUCH TAX IS DE EMED TO BE ASSESSEE IN DEFAULT. THE PROVISO TO SECTION 6A FURTHER CLARIFIE S THAT THE LICENSEE SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPE CT OF SUCH TAX, IF THE LICENSEE HAD PAID THE TAX AND HAD FILED THE RETURN OF INCOME, FOR THE SAKE OF CONVENIENCE AND COMPLETENESS THE PROVISIONS OF S ECTION 206C(1C) (6A) ALONG WITH ITS PROVISO ARE ALSO MADE PART OF THIS O RDER. [(6A) IF ANY PERSON RESPONSIBLE FOR COLLECTING TA X IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION DOES NOT COLLECT THE WHO LE OR ANY PART OF THE TAX OR AFTER COLLECTING, FAILS TO PAY THE TAX AS REQUIRED BY OR UNDER THIS ACT, HE SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH H E MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF T HE TAX: [ PROVIDED THAT ANY PERSON, OTHER THAN A PERSON REFERRED TO I N SUB-SECTION (1D), RESPONSIBLE FOR COLLECTING TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, WHO FAILS TO COLLECT THE WHOLE OR ANY PART OF THE TAX ON THE AMOUNT RECEIVED FROM A BUYER OR LICENSEE OR LESSEE OR ON T HE AMOUNT DEBITED TO THE ACCOUNT OF THE BUYER OR LICENSEE OR LESSEE SHALL NO T BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH BUYER OR LICENSEE OR LESSEE- (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 13 9; (II) HAS TAKEN INTO ACCOUNT SUCH AMOUNT FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND [[[ (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFE CT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED:] THEREFORE, WE DIRECT THE ASSESSING OFFICER TO KEEP IN VIEW THE ABOVE PROVISIONS ALSO SO THAT IN CASE WHERE THE ASSESSEE HAD NOT COLLECTED TAX AT SOURCE EVEN THEN TAX CAN NOT BE COLLECTED FROM HIM, IF THE ABOVE CONDITIONS ARE FULFILLED BY SUCH CONTRACTORS. ITA NOS. 131&132(ASR)/2015 A SSESSMENT YEARS: 2011-12&2012-13 8 12. IN VIEW OF THE ABOVE, FACTS AND CIRCUMSTANCES, WE DEEM IT APPROPRIATE TO REMIT THE ISSUE BACK TO THE OFFICE O F THE ASSESSING OFFICER WHO SHOULD APPLY CORRECT PROVISIONS OF LAW AS APPLI CABLE TO THE ISSUE AND WILL ALSO APPLY THE PROVISIONS AS CONFERRED IN SECT ION 206C(9C)6A AND ITS PROVISO. 13. NEEDLESS TO SAY THAT ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 14. IN VIEW OF THE ABOVE, THE APPEALS FILED BY ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03.08.2017. SD/- SD/- (N.K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03.08.2017. /GP/SR. PS . COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER