MINING ENGINEER, MINES & GEOLOGY DEPARTMENT (STATE GOVERNMENT DEPARTMENT), ALWAR V. CIT (Appeals), National Faceless Appeal Centre

ITA 131/JPR/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6859 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 14-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RITUL PATWA
• Keywords: Period of limitation; Reasonable cause; Time period of passing order; TDS

Judgement Text

1 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar v k ;d j v ih y h ; v f /k d j. k ] t ; iq j U; k ;ih B] t ; iq j IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Jh laanhi xkslkbZ] U; kf;d l n L; ,oaJ h j kB ksM d eys'k t ;U r Hkkb Z ] ys[ kk ln L; d s l e{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM v k ;d j v ih y la-@ITA No. 131 & 192/JP/2021 fu / kZ kj .k o" kZ @Assessment Year : 2016-17 & 2017-18 (u/s 271 CA of the Act) The Mining Engineer Mines & Geology Department (State Govt. Department), Alwar cu ke Vs. The JCIT (TDS) Jaipur LFkk; h ys[ kk l a- @t hvkbZ vkj la- @PAN/GIR No.: AAHCM 5794 K vihykFkhZ @Appellant iz R;FkhZ @Respondent v k ;d j v ih y la-@ITA No. 326 & 327/JP/2021 fu / kZ kj .k o" kZ @Assessment Year : 2017-18 & 2018-19 (u/s 206C(6) of the Act) The Mining Engineer Mines & Geology Department (State Govt. Department), Alwar cu ke Vs. The ITO (TDS) Alwar LFkk; h ys[ kk l a- @t hvkbZ vkj la- @PAN/GIR No.: AAHCM 5794 K vihykFkhZ @Appellant iz R;FkhZ @Respondent f u/k Z k f jrh d h v k s j l s@Assessee by : Shri Ritul Patwa, CA jk t Lo d h v k sj l s@Revenue by: Shri Sanjay Dhariwal, CIT lq uok bZ d h rk jh [k@Date of Hearing : 23/02/2022 mn?k k s"k . k k d h rk jh [k@Date of Pronouncement: 16 /03/2022 vkn s'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This bunch of 4 appeals have been filed by the assessee against different orders of the ld. CIT(A),National Faceless Appeal Centre, New Delhi [ hereinafter referred to as (NFAC) ] which are tabulated as under:- 2 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar ITA No. (Revenue) A.Y. Date of order of CIT(A), NFAC, Delhi u/s 131/JP/2021 2016-17 20-07-2021 271CA 192/JP/2021 2017-18 28-07-2021 271CA 326/JP/2021 2017-18 30-09-2021 206C(6) 327/JP/2021 2018-19 30-09-2-21 206C(6) 2. The hearing of the appeal was concluded through video conference by both the parties in view of the prevailing situation of Covid-19 Pandemic. 3. First of all, we take up solitary ground of appeal of the assessee in ITA No. 131/JP/2021 for adjudication. 4. The solitary issue raised by the assessee is that the ld. CIT(A) has erred in confirming the penalty amount of Rs. 1,41,840/- u/s 271CA of the Act on account of short collection of TCS. 4.1 Apropos the solitary ground of the assessee , the facts as emerges from the order ld. CIT(A), NFAC, Delhi dated 20-07-2021 emerges as under:- ‘’3.1 ....The appellant deductor was liable to collect the TCS @ 2% on the payment received in respect of royalty, RCC, ERCC Instt. dead rent, royalty from STP from the lease holder. The appellant collector collected the amount in short without reasonable cause. The appellant during the course of imposition of penalty and during the appellate proceedings has not furnished the reasonable cause for short deduction of the Tax. Therefore, the AO is justified in imposing the penalty u/s 271CA of the I.T. Act, 1961. Therefore, the penalty amounting to Rs.141,840/- is confirmed. Thus the appeal on this ground is dismissed.’’ 3 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar 4.2 During the course of hearing, the ld.AR of the assessee filed the written submission and prayed that the ld. CIT(A), NFAC has wrongly imposed the penalty u/s 271CA of the Act whereas the ld. CIT(A),NFAC vide his order dated 20-07-2021 has allowed the appeal of the assessee with the direction to the AO to verify the records and allow the credit of taxes paid by the assessee. The ld. CIT(A), NFAC, Delhi further mentioned in his order dated 20-07-2021 that the assessee has already paid more taxes than calculated by the AO, therefore, the appeal has been allowed by the ld. CIT(A), NFAC, Delhi for Statistical purposes. Instead of giving the benefit of credit, the JCIT (AO) vide his order darted 20-08- 2019 imposed the penalty and subsequently in first appeal, the ld. CIT(A), NFAC, Delhi vide his order dated 20-07-2021 has confirmed the action of the AO regarding imposition of penalty of Rs. 1,41,840/- u/s 271CA of the Act. 4.3 On the other hand, the ld. DR supported the orders of the lower authorities regarding confirmation of penalty of Rs. 1,41,840/- u/s 271CA of the Act 4.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are a spot verification was carried on 11-10-2017 by the ITO, TDS, Alwar. During the spot verification, the AO inter alia collected the information regarding the gross receipt of Royalty, RCC, Dead Rent etc. The assessee provided the total gross receipt under various heads as asked by the AO on the basis of online module/ software. On the basis of information from online 4 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar module, the total gross receipts by the assessee towards Royalty as on the date of survey was reflecting as Rs. 28,50,29,000/-. As per Section 206C of the Act, the assessee is required to collect TCS @ 2% on the Royalty, Dead Rent etc. collected from the Leaseholder. The AO calculated the TCS of Rs. 57,00,580/- @ 2% on gross royalty receipt Rs.28,50,29,000/-. The total TCS collected and reflected against the TAN of the assessee as on the date of spot verification was Rs. 58,38,059/-. However, in absence of complete information received from the lessee, the gross amount of TCS which was allocated to the Leaseholder in the TCS return was Rs. 55,58,743/-. The ld.AR submitted that the AO did not consider the TCS already collected but not allocated to the Leaseholder who created the demand for difference with the TCS return of Rs. 1,41,837/- (Rs.55,58,743 – 57,00,580) plus interest u/s 206C(7) of Rs. 55,316/- creating a demand of Rs. 1,97,153 on account of short collect of TCS. The ld.AR further submitted that the assessee filed an appeal before the ld. CIT(A) against the demand .TCS of Rs. 1,41,837/- and interest of Rs. 55,316/- who vide order dated 20-07-2021 directed the AO to verify the record and allow the credit of the assessee as the assessee has already paid more taxes than calculated by the AO. The observation of the ld. CIT(A), NFAC, Delhi is as under:- ‘’4.1.1 After considering to the above, the appellant had already deposited and filled the TCS return for financial year 2015-16 for total TCS Rs. 59,08,944/- which is more t4han the amount to be 5 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar deposited Rs. 57,00,580/- as assessed by the assessing officer. The AO is directed to verify the record and allow the credit of the taxes paid by the appellant. Since the appellant has already paid more than calculated by the AO, therefore, the appeal is allowed for Statistical purposes.’’ The ld.AR further submitted that when the quantum appeal has been allowed by the ld. CIT(A) NFAC, Delhi vide his order dated 20-07-2021 then there is no need to impose penalty by the JCIT, TDS, Jaipur. It will be better to mention the Section 271CA of the Act under which penalty has been confirmed by the ld. CIT(A), NFAC, Delhi Section -271CA: (1) If any person fails to collect the whole or any part of the tax as required by or under the provisions of Chapter XVII-BB then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to collect as aforesaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. We have considered the orders of the lower authorities and gone through the details of collection of the TCS @ 2% on the payment received by the assessee. The same can be verifiable from TRACE Data Base. It is observed that assessee had already filed the TCS return for amount more than the amount calculated by the AO in his order. The ld. CIT(A), NFAC, Delhi also did not find any short fall of TCS amount during the appellate proceedings before him. Therefore, the ld. CIT(A) NFAC, Delhi has directed the AO to verify the records and allow the credit 6 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar of taxes paid by the assessee. Hence, taking into considerations the details of TCS collection @ 2% received by the assessee from TRACE Data Base, we find that the ld. CIT(A), NFAC, Delhi vide his order dated 20-07-2021 has rightly allowed the appeal of assessee for Statistical purposes. When the quantum of appeal has been allowed by the ld. CIT(A), NFAC, Delhi then there is no need to impose penalty by the JCIT – TDS and subsequently confirmed by the ld. CIT(A), NFAC Delhi vide his order dated 20-07-2021. It is noted from the available records that the orders relating to same assessee on the issue of TCS collection are assessed on 20-07-2021 by two different appellate authority. We find from the whole scenario that when the quantum of appeal has been allowed by the ld. CIT(A) NFAC, Delhi then there is no need to confirm the penalty u/s 271CA by the other ld. CIT(A) NFAC, Delhi vide his order dated 20-07-2021. Thus the appeal of the assessee is allowed. 5.1 Now we take up the appeal of the assessee in ITA No. 192/JP/2021 wherein solitary ground of the assessee is that ld. CIT(A),NFAC Delhi vide his order dated 28-07-2021 has confirmed the penalty of Rs. 7,46,900/- u/s 271CA of the Act. 5.2 At the outset of the hearing, the bench noted that there is delay of 25 days in filing the appeal by the assessee for which the ld.AR of the assessee took the resort of Hon'ble Supreme Court order dated 23 rd Sept. 2021wherein Hon'ble Supreme Court directed that in cases where the limitation would have expired during the 7 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar period between 15-03-2020 till 02-10-2021 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03-10-2021. 5.3 On the other hand, the ld. DR did not object to the submission of the ld.AR of the assessee but prayed to decide the issue on merit as deem fit and proper in the case. 5.4 We have heard the rival contentions and perused the materials available on record. We concur with the decision of Hon'ble Supreme Court dated 23 rd Sept. 2021 and allow the delay of 25 days in filing the appeal by the assessee. 6.1 Apropos solitary of the assessee, the facts as emerges from the order of the ld. CIT(A) are as under:- ‘3.1 Ground No. 1:- Through this ground of appeal the appellant has challenged the imposition of penalty u/s 271CA of the I.T. Act amounting to Rs. 7,46,894/- on account of default of short collection of TCS. The appellant deductor was liable to collect the TCS @ 2% on the payment received in respect of royalty, RCC, ERCC Instt. Dead Rent, royalty from STP from the lease holder. The appellant collector has collected the amount in short without reasonable cause for short deduction of the Tax. Therefore, the AO is justified in imposing the penalty u/s 271CA of the I.T. Act, 1961. Therefore, the penalty amounting to Rs. 7,46,900/- is confirmed. Thus the appeal on this ground is dismissed.’’ 6.2 We have heard the rival contentions and perused the materials available on record. We find that the issue as observed in ITA No. 131/JP/2021 is similar 8 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar wherein the appeal of the assessee is allowed. Hence, the decision taken in ITA No.131/JP/2021 shall apply mutatis mutandis in the appeal of the assessee for the Assessment Year 2016-17 in ITA No.131/JP/2021. Thus the appeal of the assessee is allowed. 7.1 Now we take up the appeal of the assessee in ITA N.326/JP/2021 for the Assessment Year 2017-18 7.2 At the outset of the hearing, the bench noted that there is delay of 32 days in filing the appeal by the assessee for which the ld.AR of the assessee took the resort of Hon'ble Supreme Court order dated 23 rd Sept. 2021wherein Hon'ble Supreme Court directed that in cases where the limitation would have expired during the period between 15-03-2020 till 02-10-2021 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03-10-2021. 7.3 On the other hand, the ld. DR did not object to the submission of the ld.AR of the assessee but prayed to decide the issue on merit as deem fit and proper in the case. 7.4 We have heard the rival contentions and perused the materials available on record. We concur with the decision of Hon'ble Supreme Court dated 23 rd Sept. 2021 and allow the delay of 32 days in filing the appeal by the assessee. 9 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar 8.1 The solitary ground of the assessee is that the ld. CIT(A) has erred in confirming the amount of Rs. 9,48,560/- (including interest at Rs. 2,01,661/-) on account of short collection of TCS as per Section 206C(6) of the Act on royalty, dead rent etc. 8.2 Apropos solitary ground of the assessee, brief facts of the case are that the AO on account of short collection of TCS has raised total demand of Rs. 9,48,555/- (being TCS of Rs. 7,46,894/- alongwith interest u/s 206C (7) of Rs. 2,01,661/- which, in first appeal by the assessee, has been confirmed by the ld. CIT(A) by observing as under:- 4.1 ........On the spot, verification was carried out at the office premises of the Appellant Collector on 1-10-2017 at Hasan Khan Mewat Nagar, Alwar. During the course of verification, it was found that the appellant has not collected the TCS at the applicable rate i.e. @ 2% on the payment received regarding royalty, RCC, ERCC Instt., Dead Rent and royalty from STP from the lease holder. The assessee collector is liable to collect TCS @ 2% on payment of Rs. 34,03,37,000/- received as loyalty, RCC, ERCC Instt. Dead Rent and royalty from STP from the lease holder. As per the details available with the department, it is observed that the assessee has made short collection of TCS amounting to Rs. 7,46,894/- on total payment received as Royalty and others of Rs.34,03,37,000/- during F.Y. 2016-17 whereas the assessee collector was liable to collect TCS Rs. 68,06,740/- on the above amount but the assessee collector has made collection of TCS amounting to Rs. 60,59,846/- only. Hence, the assessee collector is in default for short collection of TCS of Rs. 7,46,894/- (Rs.6806740 – 6059846) @ 2% as per u/s 206© of the I.T. Act, 1961. 10 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar 4.1.1. After considering to the above, the demand raised by the AO amounting to Rs.9,48,560/- on account of short collection of TCS on royalty, Dead Rent. etc. (including interest at Rs. 2,01,661/) is confirmed. Therefore, the appeal on these grounds is dismissed. 8.3 During the course of hearing, the ld.AR of the assessee submitted in his written submission that the ld. CIT(A), NFAC, Delhi has not provided reasonable opportunity of being heard to the assessee and the ld. CIT(A), NFAC, Delhi has violated the principles of natural justice. However, the ld.AR of the assessee has prayed that there is no short collection of TCS which is verifiable from TRACE Data Base. 8.4 On the other hand, the ld. DR supported the orders of lower authorities. 8.5 We have heard the rival contentions and perused the materials available on record. We also find that in assessee's appal for the Assessment Year 2016-17, similar issue was decided by the ld. CIT(A), Alwar in favour of the assessee directing therein to the AO to verify from the record and allow the credit of the taxes paid by the assessee. However, in the interest of equity and justice, the appeal of the assessee is restored to the file of the AO to verify the record and allow the credit of the taxes paid by the assessee. Thus this appeal of the assessee is allowed for Statistical purposes. 11 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar 9.1 Now we take up the appeal of the assessee in ITA No. 327/JP/2018 for the Assessment Year 2018-19 for adjudication. 9.2 At the outset of the hearing, the bench noted that there is delay of 32 days in filing the appeal by the assessee for which the ld.AR of the assessee took the resort of Hon'ble Supreme Court order dated 23 rd Sept. 2021wherein Hon'ble Supreme Court directed that in cases where the limitation would have expired during the period between 15-03-2020 till 02-10-2021 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03-10-2021. 9.3 On the other hand, the ld. DR did not object to the submission of the ld.AR of the assessee but prayed to decide the issue on merit as deem fit and proper in the case. 9.4 We have heard the rival contentions and perused the materials available on record. We concur with the decision of Hon'ble Supreme Court dated 23 rd Sept. 2021 and allow the delay of 32 days in filing the appeal by the assessee. 10.1 In this appeal for the Assessment Year 2018-19, the assessee is aggrieved that the ld. CIT(A) NFAC, Delhi has erred in confirming the demand raised by the AO amounting to Rs. 9,43,660/- (including interest at Rs. 1,23,086/-) on account of short collection of TCS, Royalty, Dead Rent etc. In first appeal, the ld. CIT(A), NFAC, Delhi has dismissed the appeal by observing as under:- 12 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar 3.1 ........On the spot verification was carried out at the office premises of the Appellant Collector on 1-10-2017 at Hasan Khan Mewat Nagar, Alwar. During the course of verification, it was found that the appellant has not collected the TCS at the applicable rate i.e. @ 2% on the payment received regarding royalty, RCC, ERCC Instt., Dead Rent and royalty from STP from the lease holder. The assessee collector is liable to collect TCS @ 2% on payment of Rs. 19,71,37,000/- received as loyalty, RCC, ERCC Instt. Dead Rent and royalty from STP from the lease holder. As per the details available with the department, it is observed that the assessee has made short collection of TCS amounting to Rs. 8,20,574/- on total payment received as Royalty and others of Rs.19,7137,000/- during F.Y. 2017-18 whereas the assessee collector was liable to collect TCS Rs. 39,42,740/- on the above amount but the assessee collector has made collection of TCS amounting to Rs. 31,22,166/- only. Hence, the assessee collector is in default for short collection of TCS of Rs. 8,20,574/- (Rs.3942740 – 3122166) @ 2% as per u/s 206© (6) of the I.T. Act, 1961. 3.1.1. After considering to the above, the demand raised by the AO amounting to Rs.9,43,660/- on account of short collection of TCS on royalty, Dead Rent. etc. (including interest at Rs. 1,23,086/) is confirmed. Therefore, the appeal on these grounds is dismissed.’’ 10.2 During the course of hearing, the ld.AR of the assessee submitted in his written submission that the ld. CIT(A) NFAC, Delhi has not provided reasonable opportunity of being heard to the assessee and the ld. CIT(A) NFAC, Delhi has violated the principles of natural justice. However, the ld.AR of the assessee has prayed that there is no short collection of TCS which is verifiable from TRACE Data Base. 10.3 On the other hand, the ld. DR supported the orders of lower authorities. 10.4 We have heard the rival contentions and perused the materials available on record. We also find that in assessee's appal for the Assessment Year 2016-17, similar issue was decided by the ld. CIT(A), Alwar in favour of the assessee 13 ITA No. 131/JP/2021 Mining Engineer, Mines & Geology Department, Alwar vs ITO, TDS, Alwar directing therein to the AO to verify from the record and allow the credit of the taxes paid by the assessee. However, in the interest of equity and justice, the appeal of the assessee is restored to the file of the AO to verify the record and allow the credit of the taxes paid by the assessee. Thus this appeal of the assessee is allowed for Statistical purposes. 11. In the result, the appeals of the assessee in ITA No.131 & 192/JP/2021 are allowed and ITA No.326 & 327/JP/2021 are allowed for Statistical purposes Order pronounced in the open court on 16 /03/2022 Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U; kf;d ln L;@Judicial Member ys[ kk l n L;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 16 /03/2022 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- The Mining Engineer, Mines & Geology Department,, Alwar. 2. izR;FkhZ@ The Respondent- The ITO, TDS, Alwar . 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 131/JP/2021) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar