The The Dy. Gen. Manager J&K, Kathua V. The Income-tax Officer, (TDS), Jammu

ITA 15/ASR/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60700 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-07-2012
• Assessment Year: misc
• Appeal Filed On: 09-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R L CHHNALIA
• Assessee Lawyers: SSH R L GUPTA; AMIT GUPTA ADVS
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER ITA NO. ASSESSMENT YEAR 14(ASR)/2012 2007-08 TO 2009-10 (UNIT-III) 15(ASR)/2012 2007-08 TO 2009-2010 (UNIT-V) 16(ASR)/2012 2007-08 TO 2009-2010 (UNIT-IV) 23(ASR)/2012 2007-08 TO 2009-2010 (UNIT-II) 24(ASR)2012 2007-08 TO 2009-2010 (UNIT VIII) 25(ASR)/2012 2007-08 TO 2009-2010 (UNIT-VI) THE DY.GENERAL MANAGER, VS. THE INCOME TAX OFFICE R (TDS) J & K PROJECT CONSTRUCTION CORPN. LTD. JAMMU. UNIT-III, RAIL HEAD COMPLEX, JAMMU. PAN:AMRJII577G, AMRJ10679G AMRJ11598G, AMRJ10380G, AMRJ11638G AMRJ10659F (APPELLANT) (RESPONDENT) APPELLANT BY:S/SH. R.L. GUPTA & AMIT GUPTA, ADVS RESPONDENT BY: SH. R.L. CHHNALIA, DR DATE OF HEARING:12/07/2012 DATE OF PRONOUNCEMENT:17/07/2012 ORDER PER BENCH ; THESE SIX APPEALS OF THE ASSESSEE ARISE FROM THE C ONSOLIDATED ORDER OF THE CIT(A), JAMMU, DATED 17.10.2011 FOR THE ASSESSM ENT YEARS 2007-08 TO 2 2009-2010 FOR UNIT III, V, IV, II, VIII & VI. SINCE THE ISSUES IN ALL THE APPEALS OF THE ASSESSEE ARE COMMON, THEREFORE, ALL THE APPEALS ARE BEING DECIDED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS IN ALL THE APPEALS OF THE ASSESSEE A RE IDENTICAL EXCEPT THE AMOUNTS MENTIONED THEREIN. THE GROUNDS IN ITA NO.14 (ASR)/2012 RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER: 1. THAT THE LD. CIT(A), JAMMU HAS ERRED IN LAW AN D FACTS. IN ANY CASE HE HAS NOT APPLIED HIS MIND TO THE ACTUAL FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A), JAMMU HAS ERRED IN UPHOLDI NG THE TAX DEMAND OF SHORT DEDUCTION OF SECTION 194C RAISE D BY THE INCOME TAX OFFICER (TDS) CIRCLE, JAMMU UNDER SECTIO N 201(1) AMOUNTING TO RS.23,216/- AND INTEREST THEREON UNDER SECTION 201(IA) AMOUNTING TO RS.7767/- TOTALING RS.30.983/- ARBITRARILY, ILLEGALLY AND WITHOUT ANY JUSTIFICATION IGNORING TH E FACT THAT THE PAYEES WERE SUB CONTRACTORS FROM WHOM TAX WAS DEDUC TIBLE ONLY @ 1% + S/C + CESS INSTEAD OF 2% + SC + CESS, A S DETERMINED BY THE INCOME TAX OFFICER, TDS CIRCLE, J AMMU THOUGH THE APPELLANT IS PRINCIPAL CONTRACTOR AND TH E PAYEES ARE THE SUB-CONTRACTORS. 3. THAT THE LD. CIT(A), JAMMU HAS ERRED IN UPHOLDI NG RAISED TAX, DEMAND U/S 201(1) AMOUNTING TO RS.331334/- TOW ARDS SHORT DEDUCTION U/S 194C INSTEAD OF 195(J) WHEN THE PAYEES ARE RENDERING WORKS CONTRACTORS WHICH FALL U/S 194(C) A ND NOT TECHNICAL SERVICE U/S 194(J), ARBITRARY, ILLEGALLY AND WITHOUT ANY JUSTIFICATION. FURTHER, THE LEARNED CIT(A) HAS ALSO ERRED IN UPHOLDING THE INTEREST IMPOSED U/S 201(IA) OF THE I NCOME-TAX ACT, 1961 AMOUNTING TO RS.87528/- ON THE TAX DEMAND OF RS.331334/-, ARBITRARILY, ILLEGALLY AND WITHOUT ANY JUSTIFICATION. 3 4. THAT THE LD. CIT(A), JAMMU HAS ERRED IN UPHOLDI NG THE INTEREST AMOUNTING TO RS.10970/- LEVIED BY THE ITO (TDS), JAMMU UNDER SECTION 201(IA) FOR THE ALLEGED DEFAULT IN NOT DEDUCTING TAX ON SALARIES AT THE AVERAGE RATE OF TAX ARBITRARILY, ILLEGALLY AND WITHOUT ANY JUSTIFICATION. 5. THAT THE LD. CIT(A), JAMMU HAS ERRED IN IGNORIN G BOARD INSTRUCTION: FNO.275/201/95-IT(B) DATED 29.1.97 WHI CH CLARIFIES THAT NO DEMAND VISUALIZED U/S 201(1) OF I .T. ACT SHOULD BE ENFORCED WHEN THE TAXES DUE HAS BEEN PAID BY THE DEDUCTEE ASSESSEE. FURTHER, WHEN THERE IS NO DEFAULT FOR PRI NCIPLE THEN CHARGING OF INTEREST U/S 201(1A) AUTOMATICALLY BECO MES REDUNDANT. THE LD. CIT(A) IS UNJUSTIFIED IN CONFIRM ING IT TO BE CHARGED FROM THE APPELLANT. IT IS THEREFORE MOST HUMBLY PRAYED THAT THE ORDER S OF THE LD. CIT(A) AND ITO (TDS) MAY KINDLY BE QUASHED AND THE TOTAL DEMAND OF RS.460815/- MAY KINDLY BE DELETED I N ORDER TO MEET THE ENDS OF JUSTICE. 3. OUR DECISION FOR THE SAID APPEAL SHALL BE APPLICABLE IN ALL OTHER APPEALS. 4. THE BRIEF FACTS IN THE APPEAL OF THE ASSESSEE AR E THAT THERE WAS A TDS INSPECTION ON 18.01.2010 IN CASE OF PERSON RESPONSI BLE AND IT WAS NOTICED THAT THE PERSON RESPONSIBLE WAS REQUIRED TO MAKE TA X DEDUCTION AT SOURCE IN RESPECT OF VARIOUS ITEMS U/S 194C AND 194-J OF I.T. ACT, 1961 AND THERE WAS SHORT DEDUCTION ON THE PART OF PERSON RESPONSIBLE. BEFORE THE A.O. IT WAS SUBMITTED BY THE PERSON RESPONSIBLE THAT IN RESPECT OF TDS MADE FROM THE PAYMENTS MADE TO CONTRACTORS, IT HAD DEDUCTED TAX A T SOURCE @ 2.24% INSTEAD OF 2.27% AS REQUIRED BUT IT WAS CLAIMED BY THE P.R. BEFORE A.O. THAT PAYMENTS WERE MADE TO SUB-CONTRACTORS, IN FACT, AND THE APPLICABLE RATE 4 SHOULD HAVE BEEN 1%. REGARDING THE DISPUTE IN RESPE CT OF CERTAIN ITEMS AS TO WHETHER PROVISIONS UNDER SECTION 194C WERE APPLICAB LE TO CERTAIN ITEMS AS TO WHETHER PROVISIONS UNDER SECTION 194C WERE APPLICAB LE OR OF 194-J OF I.T. ACT. 5. THE LD. CIT(A), VIDE PARAS 5, 5,1 & 5.2 OF HIS O RDER OBSERVED AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E AND THE ORDER PASSED B THE A.O. IN RESPECT OF PARA 3.1 OF THE ORD ER, I FIND THAT THERE IS A LOT OF FORCE IN THE FINDINGS OF THE A.O. THAT M/S. J.K. PROJECT CONSTRUCTION CORPORATION LTD. IS AN AGENCY CREATED BY THE GOVERNMENT OF JAMMU & KASHMIR FOR THE PURPOSE OF CO NSTRUCTION OF GOVT. BUILDINGS AND STRUCTURES AS PER THE REQUIREME NTS AND FOR THIS VARIOUS CONTRACTORS ARE PAID BY IT. IT IS UNDOUBTED THAT THE ASSESSEE P.R. ITSELF HAS DEDUCTED TAX FROM THE PAYMENTS OF CONTRACTORS @ 2.24% INSTEAD OF 2.27% AS APPLICABLE. IN VIEW OF TH IS THE ACTION OF A.O. TO MAKE GOOD THE SHORTFALL BECAUSE OF SHORT DE DUCTION AND INTEREST THEREON IS CONFIRMED IN RESPECT OF PARA 3. 1 OF THE ORDER. 5.1 AS PER PARA 3.2 OF THE ORDER OF A.O. WHERE HE H AS TREATED CERTAIN PAYMENTS TO BE COVERED U/S 194J OF I.T.ACT, NO SPECIFIC ARGUMENTS ARE ADVANCED BEFORE ME BY THE A/R OF ASS ESSEE. THESE PAYMENTS ARE IN RESPECT OF ARCHITECTS DESIGNERS AN D TO THE PEST CONTROL PROVIDERS. IN RESPECT OF ARCHITECTS AND DES IGNERS BEING PROFESSIONALS, I FIND SUCH SERVICES ARE COVERED U/S 194-J OF I.T. ACT, BEING PROFESSIONAL SERVICES AND IN VIEW OF THIS I C ONFIRM THE ACTION OF THE A.O. IN THIS REGARD. AS FAR AS PEST CONTROL SER VICES TO BE TREATED AS COVERED U/S 194-J OF I.T.ACT BEING TECHNICAL SERVI CES I WOULD NOT SUBSCRIBE TO THE VIEW TAKEN BY THE A.O. THE A.O. HA S RELIED ON THE TERM TECHNICAL SPECIFICATION AS USED IN THE LETTE R OF APPROVAL FOR THE JOB OF ANT TERMITE TREATMENT, GIVEN BY THE P.R. T O THE FIRM BUT IF WE START TO STRETCH THE DEFINITION OF TECHNICAL SERVI CES TOO FAR, THAT WOULD COVER ALMOST ALL THE SERVICES, WHICH THE DEFINITION OF TECHNICAL SERVICES TOO FAR, THAT WOULD COVER ALMOST ALL THE SERVICES, WHICH IS NOT THE INTENTION OF LEGISLATURE. IN VIEW OF THIS, THE STAND OF THE A.O. IN 5 TREATING THE PEST CONTROL SERVICES AS TECHNICAL I S NOT CONFIRMED. SUCH SERVICES ARE TO BE TREATED AS COVERED U/S 194C OF T HE ACT. SIMILAR IS THE POSITION IN ALL THE ASSESSMENT YEARS WITH A VAR IATION IN THE AGENCIES WORKING. 5.2. ON THE DATE OF HEARING, THE I.T.O. WAS SPECIFI CALLY ASKED AS TO WHICH PERIOD, THE INTEREST U/S 201(IA) OF I.T. ACT, WAS APPLIED AND HE REPLIED THAT SUCH INTEREST IS CHARGED FROM THE DUE DATE OF MAKING T.D.S. TO THE DATE OF PASSING THE ORDER, WHICH IS F OUND TO BE CORRECT AND EXCEPT IN RESPECT OF PEST CONTROL SERVICES (A S HELD ABOVE) SUCH LEVY OF INTEREST IS ALSO CONFIRMED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) IN PARA 5 SINCE THE ASSESSEE ITSELF HAD DEDUCTED TAX AT SOURCE @ 2.24% INSTEAD O F 2.27% AS APPLICABLE AND THEREFORE, THE AOS ACTION FOR MAKING GOOD THE SHORTFALL HAS RIGHTLY BEEN CONFIRMED BY THE LD. CIT(A). 6.1. AS REGARDS PAYMENT OF ARCHITECTS DESIGNERS, TH E SAME HAS RIGHTLY BEEN TREATED AS PROFESSIONAL SINCE SUCH SERVICES ARE COV ERED UNDER SECTION 194-J. NOTHING HAS BEEN BROUGHT ON RECORD BEFORE THE LD. C IT(A) IN SUPPORT OF THE ARGUMENTS BY THE LD. COUNSEL AND THEREFORE, WE FIND NO INFIRMITY IN HIS ORDER IN PARA 5.1 6.2. AS REGARDS INTEREST UNDER SECTION 201(1A) OF T HE ACT, ON SALARY PAYMENTS, KEEPING IN VIEW THE BOARD INSTRUCTION : F .NO.275/201/95-IT(B) DATED 29.01.1997 AND IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA-COLA BEVERAGES (P) LT D. VS. COMMISSIONER 6 OF INCOME TAX REPORTED IN (2007) 293 ITR 226, IF PA YEE HAD PAID FULL TAX THEN NO TAX COULD BE RECOVERED BUT THE ASSESSEE HA S TO PAY INTEREST ONLY. IN THE PRESENT CASE, THE AO HAS CHARGED INTEREST ONLY WHICH ACTION OF THE AO HAS RIGHTLY BEEN CONFIRMED BY THE LD. CIT(A). WE FI ND NO INFIRMITY IN HIS ORDER. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE DI SMISSED. 7. SINCE ALL THE GROUNDS IN OTHER APPEALS OF THE AS SESSEE, AS MENTIONED HEREINABOVE, ARE IDENTICAL TO THE GROUNDS IN ITA NO .14(ASR)/2012, THEREFORE, THE SAID ORDER IN ITA NO.14(ASR)/2012 APPLIES TO OT HER APPEALS OF THE ASSESSEE IN ITA NOS. 15, 16, 23, 24 & 25 (ASR)/2012 . ACCORDINGLY, ALL THE GROUNDS OF THE ASSESSEE IN ALL THE APPEALS ARE DISM ISSED. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE IN ITA NOS. 14, 15, 16, 23, 24, 25 (ASR)/2012 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH JULY, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17TH JULY, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:DY. GENERAL MANAGER, J & K PROJECT CON STRUCTION CORPN. LTD. JAMMU. UNIT-II, III, IV, V, VI & VIII 2. THE ITO (TDS), JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT JAMMU. 5.THE SR DR, ITAT, AMRITSAR.