M/s Demi Realtors, Chennai V. Dy.CIT, Circle - 14(1), Hyderabad

ITA 1364/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6160 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: J PRABHAKAR
• Keywords: Non compliance
• Section: 133A; 201(1)

Judgement Text

ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1364/HYD/2014 ( ASSESSMENT YEAR: 2008-09 ) M/S. DEMI REALTORS HYDERABAD PAN: AAFFD 9401 P VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 14(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI J. PRABHAKAR FOR REVENUE : SHRI A. SITARAMA RAO, DR DATE OF HEARING : 2.8.2016 DATE OF PRONOUNCEMENT : 30 .9 .2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2008-09 AGAIN ST THE ORDER OF THE CIT (A) IN CONFIRMING THE ORDER PASSED BY THE AO U/S 201(1) AND 201(1A) OF THE ACT. 2. BRIEF FACTS O THE CASE ARE THAT THERE WAS A TDS SURVEY U/S 133A WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 14.12.2010 TO VERIFY THE ADHERENCE OF TDS PROVIS IONS BY THE ASSESSEE. DURING THE SAID PROCEEDINGS, IT WAS LEARN T THAT THE ASSESSEE HAS DEDUCTED TAX AT SOURCE, BUT HAS NOT FI LED QUARTERLY STATEMENT FOR THE FINANCIAL YEAR RELEVANT TO THE A. Y 2008-09. VARIOUS DETAILS WERE CALLED FOR WHICH WERE FILED BY THE ASSESSEE. THE AO CONSIDERED THE SAID DETAILS AND OBSERVED THA T THE ASSESSEE HAS NOT FILED THE STATEMENTS (RETURNS OF T DS) AS PRESCRIBED UNDER THE I.T. ACT AND FURTHER THAT THE ASSESSEE HAD ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 2 OF 9 DEDUCTED A SUM OF RS.92,79,396, BUT HAS NOT REMITTE D THE SAME TO THE CENTRAL GOVT. A/C., HE, THEREFORE, TREATED T HE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) TO THE EXTENT O F RS.86,26,425 AND ALSO LEVIED INTEREST OF RS.35,42,890 U/S 201(1A ), A TOTAL OF WHICH COMES TO RS.1,21,69,325. AGGRIEVED THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT (A) ALONG WITH VARIOUS DET AILS. THE CIT (A) CALLED FOR A REMAND REPORT FROM THE AO AND AFTE R CONSIDERING THE SAME AT LENGTH HAS HELD AS UNDER: 4.8 PERUSED THE SUBMISSIONS OF THE APPELLANT AND THE ORDER/REPORT OF THE A.O. AS COULD BE SEEN FROM THE FACTS OF THE CASE, THE APPELLANT FIRM IS ENGAGE D IN THE BUSINESS OF REAL ESTATE AND DURING THE YEAR UND ER REFERENCE, HAS ENTERED INTO AN MOU DATED 21.05.2007 WITH M/S. SAI SURYA REALTORS & DEVELOPERS FOR SETTLING ALL DISPUTES AND MAKING GOO D THE TITLE OF THE PROPERTIES LOCATED AT NARSINGI VIL LAGE (AC 5.06 GUNTAS) FOR THE PURPOSE OF SALE OF SAME TO DLF GROUP. ACCORDINGLY, THE AGREED AMOUNT OF RS. 5.00 CRORES WAS PAID AS COMMISSION AND TDS WAS DEDUCTED AS PER THE ENTRIES MADE IN THE BOOKS OF TH E APPELLANT, AS TRACED DURING THE COURSE OF SURVEY PROCEEDINGS CONDUCTED. HOWEVER, IT WAS FOUND THAT THE AMOUNTS DEDUCTED WERE NOT REMITTED TO GOVT. ACCOUNT. THE SALE DEED WAS ALSO SHOWN TO HAVE BEEN EXECUTED ON 24.08.2007, FOR SALE OF SAID PROPERTY. THE A.O INITIATED AND LEVIED PENALTY U/S. 201 AND CHARGED INTEREST UJS. 201(LA) FOR THE SAID DEFAULT OF NON-REMITTANCE OF DEDUCTED AMOUNTS. HOWEVER, THE APPELLANT RAISED THE GROUND AGAINST SUCH PENALTY/INTEREST, HOLDING THAT THE AMOUNTS PAID WER E REPRESENTING THE ADVANCES, SUBJECT TO CLEARANCE OF DISPUTES/TITLES AND WITH THE DISPUTE CROPPED UP LATER, THE AMOUNTS WERE ORDERED TO BE REPAID WITH INTEREST, AS PER THE AWARD BY ARBITRATION AUTHORITY . ACCORDINGLY, AS PER THE APPELLANT, THERE IS NO LIAB ILITY FOR MAKING THE TDS ON SUCH PAYMENTS, AND THE SAID AMOUNTS ARE ORDERED FOR REPAYMENTS BY THE DEDUCTEE, AS SUCH THERE WAS NO LIABILITY TO REMIT T HE AMOUNT TO GOVT. ACCOUNT. THE MAIN ARGUMENT OF THE ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 3 OF 9 APPELLANT WAS THAT PARTNERS OF THE FIRM WERE NOT CONVERSANT WITH I.T. PROCEDURES AND ACCOUNTS AND AS SUCH THE RETENTION MONEY WAS SHOWN AS COMMISSION IN BOOKS OF FIRM AND THE ENTRIES MADE IN BOOKS OF ACCOUNT MAY NOT BE TAKEN AS DETERMINATIVE OF THE TA X LIABILITY. IT WAS ALSO CONTENDED BY THE APPELLANT T HAT SUBSTANCE OF TRANSACTION BE APPRECIATED ON THE BASI S OF MOU AND THE SUBSEQUENT DISPUTE/ARBITRATION PROCEEDINGS BETWEEN THE PARTIES TO MOU. HOWEVER, IT WAS A FACT THAT THE APPELLANT REMITTED CERTAIN AMOUNTS TO THE GOVT. ACCOUNT BEFORE THE LEVY OF PENALTY AS WELL AS SUBSEQUENTLY. AS PER THE INFORMATIN BROUGHT ON RECORD, THE AMOUNT FAILED TO BE DEDUCTED AS TDS WAS RS.92,79,396 AGAINST WHICH THE APPELLANT DEDUCTED RS.92,79,396 BUT HAVE REMITTED ONLY RS.10,65,235 BEFORE PASSING THE ORDER U/S 201(1), THUS THE TDS PAYABLE WAS DETERMINED AT RS.86,26,435, WHILE GIVING A CREDIT ONLY FOR RS.6,52,961. THUS, INTEREST (RS.25,42,890) WAS LEVIED U/S 201(1A) ON THE LIABLE/PAYABLE AMOUNT OF RS.86,26,435 AS AGAINST THE ACTUAL PAYABLE AMOUNTS OF RS.82,14,161. IT WAS ALSO SUBMITTED AND RATIFIED BY THE AO THAT APPELLANT REMITTED A TOTAL AMOUNT OF RS.21,68,320 AND THE APPELLANT REQUESTED FOR GIVING CREDIT FOR THE SAID AMOUNTS, FOR CALCULATING THE PENALTY AMOUNTS AND NTEREST U/S 201(1A). 4.9. AS COULD BE OBSERVED, THE APPELLANT ENTERED IN TO MOU WITH M/S SAI SURYA REALTORS & DEVELOPERS FOR CERTAIN ACTIVITIES/ SERVICES AND PAID A COMMISSION OF RS.5.00 CRORES, ON WHICH TAX OF RS.92,79,396 WAS ALSO DEDUCTED. IT WAS ONLY THE SUBSEQUENT DEVELOPMENT OF NOT FULFILLING THE CONTRACTUAL OBLIGATION ON THE PART OF THE OTHER PARTY, ENABLED THE APPELLANT TO TAKE A STAND THAT THE AMOUNTS ARE NOTHING BUT RETENTION MONEY, WHICH WAS ORDERED BY THE ARBITRATION AUTHORITY FOR REPAYMENT. IN THIS REGARD IT IS PERTINENT TO MENTION HERE THAT THE SAI D CONTRACT/MOU WAS IMPLEMENTED AND THE PROPERTY UNDER REFERENCE WAS ALSO REGISTERED, SUBSEQUENT TO THE DATE OF MOU, FORCING THE APPELLANT TO FULFIL TH E OBLIGATION OF PAYMENT OF COMMISSION ON WHICH THE LIABILITY OF TDS HAS ARISEN, WHICH WAS IN FACT COMPLIED BY THE APPELLANT BY DEDUCTING THE AMOUNTS ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 4 OF 9 TO THE EXTENT OF RS.92,79,396. IT WAS ONLY THE POST THOUGHT TO SHOW THE AMOUNT PAID AS RETENTION MONEY, SINCE THE SUBSEQUENT LITIGATION BY THE THIRD PARTY WAS NOT FORESEEN/ANTICIPATED BY THE PARTIES T O THE MOU. AS ON THE DATE OF PAYMENT, THERE WAS AN OBLIGATION ON THE PART OF APPELLANT WHICH WAS COMPLIED BY DEDUCTION OF TDS. IT WAS THE DEFAULT OF NON-REMITTING THE AMOUNTS AS ON THE DATE OF LEVY OF PENALTY, WHICH IS THE MAIN ISSUE FOR THE PROCEEDING S UNDER REFERENCE. RELEVANT TDS PROVISIONS OF THE ACT ONLY CONTEMPLATE THE DEDUCTION ON THE AMOUNTS PAYABLE OR PAID, AS THE CASE MAY BE, UNLESS A CERTIFICATE FOR DEDUCTION OF TAX AT LOWER RATE OR N IL IS OBTAINED BY THE DEDUCTEE. IN THIS CASE, THE AMOUNTS WERE PAID BY APPELLANT AS COMMISSION, AS PER THE TERMS OF MOU DATED 21.05.2007 AND IT WAS ONLY SUBSEQUENT TO THE PAYMENT OF SUCH AMOUNT, IT WAS TREATED AS RETENTION MONEY, SUBJECT TO THE FULFILME NT OF CERTAIN CONDITIONS STIPULATED THEREIN. AS ON THE DATE OF PAYMENT, THERE WAS OBLIGATION ON THE DEDUCTOR TO DEDUCT THE TAX ON THE COMMISSION PAID, WHICH INFACT WAS COMPLIED WITH, HOWEVER THE DEFAULT WAS, AS STATED, ON ACCOUNT OF NON-REMITTANCE OF THE AMOUNTS INTO GOVT. ACCOUNT. IT MAY ALSO BE RELEVANT THAT APPELLANT ALSO REMITTED A PART OF SUCH AMOUNTS BEFORE THE ORDERS U/S. 201(1) & 201(LA) AND SOME AMOUNTS SUBSEQUENTLY, TOTALLING TO RS. 21,68,320/-. ONCE THE DEDUCTIONS WERE MADE, PART OF THE AMOUNTS REMITTED, IT MAY NOT BE CORRECT ON THE PART OF THE APPELLANT TO ARGUE THAT THERE WAS NO LIABILITY CAST ON HIM FOR MAKING TDS ON THE AMOUNTS OF RS. 5.00 CRORES PAID TO M/S. SAI SURYA REALTORS & DEVELOPERS AND REMIT THE SAME TO GOVT. ACCOUNT AS STIPULATED I N THE ACT. IT IS AN ESTABLISHED FACT THAT WHERE A TRANSACTION TAKES PLACE, THERE LIES THE LIABILITY F OR DEDUCTION OF TAX AS ON THE DATE OF TRANSACTION, WITHOUT ANY REFERENCE TO THE FUTURE OF SUCH TRANSACTION. THE APPELLANT WAS LIABLE FOR MAKING TD S ON THE ENTIRE AMOUNTS OF RS. 5.00 CRORES AND WAS ALSO UNDER OBLIGATION TO REMIT THE AMOUNTS TO GOVT. ACCOUNT AND HAVING FAILED TO REMIT THE SAID AMOUNTS TO GOVT. ACCOUNT, THE APPELLANT IS LIABLE TO BE TRE ATED AS ASSESSEE IN DEFAULT AND LEVY OF PENALTY U/S. 201 IS JUSTIFIED. SIMILARLY, THE INTEREST U/S 201(LA) I S ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 5 OF 9 LEVIABLE ON THE AMOUNTS OF DEFAULT OR REMITTANCE, T ILL THE DATE OF REMITTANCES, SINCE CHARGING OF INTEREST U/S 201(1A) IS CONSEQUENTIAL. THE AO HOWEVER, IS DIRECTED TO GIVE CREDIT FOR THE AMOUNTS OF RS.21,68,320 REMITTED TO THE GOVT. ACCOUNT TILL DAT E, WHILE LEVYING THE PENALTY U/S 201 AND REDUCE THE INTEREST U/S 201(1A) PROPORTIONATELY. ON THESE LINE S, THE APPEAL IS TREATED AS PARTLY ALLOWED. 3. AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSES SEE IS IN SECOND APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, HAS SUBMITTED THAT THE SAID EXPENDITURE HAS ALSO BEEN DISALLOWED U/S 40(A)(IA) AND TREATING THE ASSESSEE AS AN ASSESSEE IN DEFAUL T U/S 201(1) AND LEVYING OF INTEREST U/S 201(1A) IS NOTHING BUT DOUBLE JEOPARDY. HE ALSO JUSTIFIED THE NON REMITTANCE OF T HE TDS FROM THE PAYMENT OF RS.5.00 CRORES AS COMMISSION, ON THE GROUND THAT THERE WAS AN ARBITRAL AWARD IN WHICH THERE WAS A CLEAR DIRECTION TO REPAY A SUM OF RS.5.00 CRORES THEREBY MAKING THE ENTIRE DISALLOWANCE OF THE SAID SUM U/S 40(A)(IA) A ND CONSEQUENT LEVY OF INTEREST U/S 201(1) AND 201(1A) OTEIOSE. TH US, ACCORDING TO HIM, THE ORDER OF THE AO AND THE CIT ( A) NEEDS TO BE SET ASIDE. THE LEARNED DR, HOWEVER, SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE H AVING DEDUCTED THE TAX AT SOURCE FROM THE PAYMENT OF RS.5 .00 CRORES TO SAI SURYA REALTORS AND DEVELOPERS, OUGHT TO HAVE RE MITTED THE SAME TO THE GOVT. A/C AS STIPULATED IN THE ACT. IT WAS SUBMITTED THAT THE ASSESSEES RELIANCE UPON THE SUBSEQUENT EV ENTS FOR NON COMPLIANCE OF ITS OBLIGATIONS IS NOT JUSTIFIED. ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 6 OF 9 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE LIABILITY OF THE ASSESSEE TO DEDUCT THE TAX AT SOURCE AND OBLIGATION TO REMIT THE SAME TO THE G OVT. A/C ARISES ON MAKING OF THE PAYMENT OR CREDITING THE PARTYS A /C WHICHEVER IS EARLIER. IN THE CASE BEFORE US, THE ASSESSEE HAS MADE PAYMENT OF RS.5.00 CRORES AND HAS ALSO DEDUCTED THE TAX AT SOURCE. HAVING DONE SO, IT IS THE OBLIGATION OF THE ASSESSE E TO REMIT THE SAME TO THE GOVT. A/C. CONTENTION OF THE ASSESSEE J USTIFYING THE NON-REMITTANCE OF THE TDS AMOUNT INTO GOVT. A/C ON THE GROUND THAT THERE WAS A DISPUTE WITH REGARD TO THE COMPLIA NCE OF THE CONDITIONS OF THE CONTRACT AND THAT THE ASSESSEE HA D TO APPROACH THE ARBITRATOR AND FURTHER THAT THE ARBITRAL AWARD SUBSEQUENTLY DIRECTED THE DEDUCTOR TO REPAY THE AMOUNT, IS NOT A CCEPTABLE. THE DISPUTE THAT HAS ARISEN, IS ARISEN SUBSEQUENT T O THE LAPSE OF TIME FOR DEPOSIT OF THE SUM INTO THE GOVT. A/C. THE REFORE, THE ASSESSEE IS NOT JUSTIFIED IN STATING THAT THE TDS W AS NOT REMITTED TO THE GOVT. A/C AS THERE WAS A DISPUTE. THE ASSESS EE OUGHT TO HAVE COMPLIED WITH THE PROVISIONS OF THE LAW AND TH EREAFTER IF THE ARBITRAL AWARD WAS COMPLIED WITH AND THE AMOUNT RET URNED, THE ASSESSEE COULD HAVE MADE THE CLAIM FOR REFUND IN AC CORDANCE WITH THE PROVISIONS OF LAW. AS FAR AS THE ASSESSEE S OBLIGATION IS CONCERNED, WE ARE SATISFIED THAT THE ASSESSEE HAS N OT FULFILLED THE OBLIGATION DURING THE RELEVANT PERIOD AND THEREFORE , THE ASSESSEE WAS RIGHTLY TREATED AS AN ASSESSEE IN DEFAULT U/S 2 01(1) AND WAS ALSO RIGHTLY CORRECTLY LEVIED INTEREST U/S 201(1A) OF THE ACT. 5.1 AS REGARDS ASSESSEES ARGUMENT THAT THERE IS A DOUBLE JEOPARDY BY DISALLOWANCE OF EXPENDITURE U/S 40(A)(I A) AND ALSO TREATING THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 7 OF 9 ACT, WE ARE NOT INCLINED TO ACCEPT THE ASSESSEES C ONTENTION FOR THE FOLLOWING REASONS:- U/S 40(A)(IA), THE DISALLOWANCE IS OF THE CLAIM OF DEDUCTION IN COMPUTING THE INCOME CHARGEABLE TO TAX WHEREAS U /S 201(1), THE ASSESSEE IS DEEMED TO BE AN ASSESSEE IN DEFAUL T IN RESPECT OF TAX DEDUCTED BUT DEFAULTED IN REMITTANCE U/S 200 (1). THE SCOPE OF BOTH THE SECTIONS IS DIFFERENT AND BOTH AR E MUTUALLY EXCLUSIVE. FURTHER, IN THE CASE OF TUBE INVESTMENTS OF INDIA LTD AND ANOTHER V. ACIT (TDS) & OTHERS, REPORTED IN (20 10) 325 ITR 610 (MAD.), THE HON'BLE MADRAS HIGH COURT HAS CONSI DERED THIS ISSUE AT LENGTH WHILE CONSIDERING THE CONSTITUTIONA L VALIDITY OF SECTION 40(A)(IA) AND HELD AS UNDER: 67. ONE OTHER ARGUMENT MADE ON BEHALF OF THE PETITIONE RS IS THAT WHEN UNDER CHAPTER XVII-B STRINGENT PROVISIONS HAVE BEEN MADE FOR IMPOSING PENALTY, INTEREST ETC., FOR COMMITTING ANY DEFAULT IN MAKING THE TDS, CREATING A DISALLOWANCE OF THE ENTIRETY OF THE EXPENSES SHOULD BE HELD TO BE ARBITRARY OR UNREASONABLE AND VIOLATE ARTICLES 14 AND 19(1)(G) OF THE CONSTITUTION. AS FAR AS THE SAID SUBMISSION IS CONCERNED, WITH REFERENCE TO A PROVISION CONTAINED IN CHAPTER XVII- B, THE RELEVANT SECTIONS ARE 199, 201 AND 221. SECT ION 199 STATES THAT ALL TAXES MADE IN ACCORDANCE WITH THE PROVISIONS OF THAT CHAPTER AND PAID TO THE CENTRAL GOVERNMENT TO BE TREATED AS PAY MENT OF TAX ON BEHALF OF THE PERSONS ON WHOSE INCOME THE DEDUCTION IS MADE. SECTION 200 PRESCRIBES THE PERIOD WITHIN WHICH THE DEDUCTED AMOUNT SHOULD BE PAID TO THE GOVERNMENT. SECTION 201 TALKS OF THE CONSEQUENCE OF FAILURE TO DEDUCT OR PAY, IN WHICH E VENT, THE PAYER BY VIRTUE OF THE DEFAULT COULD BE DEEMED TO BE AN ASSE SSEE IN DEFAULT OF THE TDS AMOUNT AND NOTHING MORE. AS FAR AS THE IMPL ICATION OF SECTION 221 IS CONCERNED, BY VIRTUE OF THE DEEMED T O BE AN ASSESSEE AS PROVIDED UNDER SECTION 201, THE SCOPE FOR IMPOSI TION OF PENALTY IS PROVIDED. AS IS THE USUAL STIPULATIONS, SECTION 221 CREATES AN OBLIGATION ON THE AUTHORITY TO GIVE NECESSARY OPPOR TUNITY ETC., BEFORE IMPOSING ANY PENALTY. FURTHER UNDER THE PROVISO TO SECTION 201, IT IS SPECIFICALLY PROVIDED THAT IF THE PAYER SATISFIES T HE ASSESSING OFFICER, THE FAILURE TO MAKE THE DEDUCTION OR PAYMENT WAS FO R GOOD AND SUFFICIENT REASONS NO PENALTY NEED BE IMPOSED. 68. ALL THE ABOVE CONSEQUENCE ARE ALL RELATED AND REST RICTED TO THE AMOUNT OF TDS TO BE DEDUCTED UNDER CHAPTER XVII-B. THE PURPORT AND INTENT OF THE ABOVE SAID PROVISION ARE ONLY TO ENSURE THAT IN THE ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 8 OF 9 EVENT OF ANY DEFAULT IN MAKING THE DEDUCTION, THE R EQUIRED AMOUNT TO BE DEDUCTED IS ULTIMATELY COLLECTED. AS COMPARED TO THOSE PROVISIONS, THE LEGISLATIVE INTENT OF THE INTRODUCTION OF SECTI ON 40(A)( IA) IS IN THE LARGER PERSPECTIVE OF AUGMENTING THE VERY TDS PROVI SIONS THEMSELVES. IT IS NOT MERELY RELATED TO THE COLLECT ION OF TDS ALONE. IN THIS CONTEXT, IT WILL BE APPROPRIATE TO REFER TO ON E OF THE SUBMISSION OF THE LEARNED STANDING COUNSEL FOR THE REVENUE THA T ONLY ABOUT 3 PER CENT OF THE RETURNS FILED ARE TAKEN UP FOR SCRUTINY , IN VIEW OF THE FACT THAT THE ACT AND ADMINISTRATION HAVE BEEN MOVING TO WARDS SELF- ASSESSMENT. IN OTHER WORDS, REPOSING HIGHER AMOUNT OF CONFIDENCE IN THE LAW ABIDING CITIZENS THAT THEY WOULD VOLUNTARIL Y COME FORWARD TO PAY THE TAX AS A HONOURABLE CITIZEN, SCRUTINY IS ST ATED TO HAVE BEEN LIMITED TO 3 PER CENT OF THE RETURNS. HAVING REGARD TO SUCH A NOTABLE ADVANCEMENT IN THE REVENUE ADMINISTRATION, IT CANNO T BE SAID THAT THE OBJECTIVE SOUGHT TO BE ACHIEVED VIZ., AUGMENTATION OF TDS PROVISIONS BY BRINGING OUT A STRINGENT PROVISION IN THE FORM O F SECTION 40(A)( I) OR 40(A)( IA) CAN BE SAID TO BE DRACONIC OR HIGHLY EXCESSIVE IN ITS APPROACH. HERE AGAIN, THE RESULTANT POSITION IN THE TDS RECOVERIES FOR THE YEAR 2008-09 DISCLOSES THAT THE OBJECTIVE S OUGHT TO BE ACHIEVED HAS BEEN SUCCESSFULLY REALIZED BY THE INTR ODUCTION OF SECTION 40(A)( IA). THEREFORE, THE SUBMISSION MADE ON THAT FOOTING ALSO DOES NOT INSPIRE US TO HOLD THAT THE PROVISION SHOULD BE HELD TO BE UNREASONABLE OR ARBITRARY AND IN VIOLATION OF AR TICLE 14 OF THE CONSTITUTION. THUS, IT CAN BE SEEN THAT BOTH THE ABOVE PROVISIONS OPERATE IN DIFFERENT CIRCUMSTANCES. IN THE CASE BEFORE US, THE ASSESSEE HAS DEDUCTED THE TAX BUT HAS FAILED TO REMIT THE SAME I NTO THE GOVT. A/C. THEREFORE, THE ASSESSEE HAS RIGHTLY BEEN CONSI DERED AS AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND THER E IS NO DOUBLE JEOPARDY AS ALLEGED BY THE ASSESSEE. 6. IN VIEW OF THE SAME, THIS GROUND IS REJECTED, 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2016. S D/ - S D/ - ( S.RIFAUR RAHMAN ) ( P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 30 TH SEPTEMBER, 2016. VNODAN/SPS ITA NO 1364 OF 2014 DEMI REALTORS HYDERABAD PAGE 9 OF 9 COPY TO: 1. SHRI J. PRABHAKAR, CA, RESIDENCY APARTMENTS, 245, T TK ROAD, ALWARPET, CHENNAI 600018 2. DCIT, CIRCLE 14(1) HYDERABAD 3. CIT(A) VI HYDERABAD 4. CIT (TDS) HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER