Gujarat Hydrocarbons And Powr Sez Ltd., Kolkata V. DCIT, Circle - 57(TDS), Kolkata, Kolkata

ITA 153/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91896 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 31-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2012
• Court: TRIBUNAL
• Department Lawyers: DEBASHIS ROY
• Assessee Lawyers: R P AGARWALLA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH , JM ] I.T . A NO. 153 /KOL/20 1 2 ASSESSMENT YEAR: 200 9 - 1 0 GUJARAT HYDROCARBONS & POWER SEZ LTD. VS. DEPUTY COMMISSIONER OF INCOME - TAX, (PAN: AA DCG2673B ) CIRCLE - 57 (TDS) , KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 1 3 . 0 4 .201 5 DATE OF PRONOUNCEMENT: 13 . 0 4 .201 5 FOR THE APPELLANT: SHRI R. P. AGARWALLA FOR THE RESPONDENT: SHRI DEBASHIS ROY, SR. DR ORDER PER SHRI P. K. BANSAL, AM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) DATED 0 2. 11 .201 1 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL . 1. ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT(A) - 1 ERRED IN UPHOLDING THE LD. AO S OR DER DETERMINING RS.17,76,209/ - AS INTEREST PAYABLE BY THE APPELLANT UNDER SECTION 201(1)/201(1A). 2. ON THE FACTS OF THE CASE AND IN LAW THE LD. C IT (A) - 1 ERRED IN UPHOLDING THE LD. AO S ORDER DEEMING THE APPELLANT AS ON ASSESSEE IN DEFAULT AS PER SECTION 201(1). 2. THE ONLY ISSUE INVOLVED IN BOTH THE GROUNDS RELATE TO THE COMPUTATION OF INTEREST PAYABLE BY THE ASSESSEE U/S. 201(1A) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT . THE ASSESSEE HAS PAID INTEREST TO ASSAM CO. LTD. (IN SHO RT ACL ) AND DEDUCTED TDS @ 7% . THE ASSESSEE CLAIMED BEFORE THE AO THAT ACL WAS ISSUED CERTIFICATE U/S. 197(1) OF THE ACT FOR DEDUCTION OF TAX @ 7%. THE CERTIFICATE WAS ISSUED BY AO ON 31.03.2009. THE AO NOTED THAT A SUM OF RS.13,39,91,914/ - AS COVERED U/S. 194A OF THE ACT WAS CREDITED INTO THE ACCOUNT OF ACL ON 31.12.2008, THEREFORE, THE ASSESSEE FAILED TO DEDU CT TAX @ 20% ON THIS AMOUNT RESULTING A SHORT FALL OF RS.1,97,35,660/ - . THE ASSESSEE POINTED OUT THAT ACL DISCLOSED THE AMOUNT OF INTEREST IN ITS ACCOUNT AND IN THE RETURN OF INCOME ON 30.09.2009 AND ACCORDINGLY, THE AO COMPUTED THE INTEREST ON THE SUM OF RS.1,97,35,660/ - TILL THE DATE OF FILING OF THE RETURN BY ACL AT RS.17,76,209/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND BEFORE THE CIT(A) THE ASSESSEE RELIED ON THE CERTIFICATE ISSUED BY THE AO TO ACL DATED 31.03.2009 AND CONTENDED THAT THE ASS ESSEE HAS NOT MADE ANY DEFAULT AND DEDUCTED TAX @ 7%. THE CIT(A) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND UPHELD THE ORDER OF AO BY HOLDING AS UNDER: 2 ITA NO 153 /K/201 2 GUJARAT HYDROCARBONS & POWER SEZ LTD. LTD. , AY:200 9 - 1 0 6.1 I HAVE GONE THROUGH THE ARGUMENT OF THE APPELLANT VERY CAREFULLY. THE APPELLANT DID NOT DEDUCT TDS STATING THAT THOUGH THE CERTIFICATE WAS ISSUED ON 31.03.2009, IT WOULD BE VALID FOR WHOLE OF THE FINANCIAL YEAR 2008 - 09. THIS ARGUMENT OF THE APPELLANT DOES NOT HOLD GOOD. THE CERTIFICATE COMES INTO EXISTENCE THE DATE IT HAS BEEN ISSUED. IT CAN NOT BE MADE APPLICABLE PRIOR TO THE DATE OF THE ISSUE OF THE CERTIFICATE. IF THE ARGUMENT OF THE APPELLANT IS VALID OR ACCEPTED NO ONE WILL DEDUCT TDS AS PER THE PROVISIONS OF SECTION 201 (1) OF THE I. T. ACT AND ON THE GROUND THAT THE DEDUCTEE HAS APPLIED FOR LOWER DEDUCTION OR NO DEDUCTION U/S.197( 1) OF THE INCOME TAX ACT,1961 AND IT IS PENDING BEFORE THE OFFICER CONCERNED. THE OFFICER MIGHT NOT ACCEDE TO THE REQUEST OF THE DEDUCTEE AND REJECT THE APPLICATION OF THE DEDUCTEE. THUS, THE ARGUMENT OF THE AP PELLANT IS NOT CORRECT. THE DATE ON WHICH CREDIT OR PAYMENT IS MADE, THE DEDUCTOR IS LIABLE TO DEDUCT TDS AS PER THE PROVISIONS OF THE ACT. THUS, THE APPELLANT FAILS TO GET RELIEF ON THIS ISSUE AND THE ACTION OF THE A.O. FOR LEVYING INTEREST U/S.201(1A) OF THE ACT, WHICH IS MANDATORY IN NATURE, IS UPHELD. 3. BEFORE US THE LD. AR HAS VEHEMENTLY CONTENDED THAT THE CERTIFICATE WAS ISSUED U/S. 197(1) OF THE ACT TO ACL AND THE CERTIFICATE CLEARLY STATED THAT THE TDS HAS TO BE DEDUCTED @ 7% . THE CERTIFICATE DA TED 31.03.2009 RELATES TO THE FY 2008 - 09. THE CERTIFICATE IS, THEREFORE, APPLIED TO THE WHOLE INTEREST CREDITED OR PAID DURING THE IMPUGNED ASSESSMENT YEAR. ON A QUERY FROM THE BENCH THAT A SUM OF RS.13,39,91,914/ - HAS BEEN CREDITED TO THE ACCOUNT OF THE ACL AS ON 31.12.2008 AND HOW THIS CERTIFICATE WILL APPLY TO THE AMOUNT WHICH HAS ALREADY BEEN CREDITED TO THE ACCOUNT OF ACL BY WAY OF INTEREST? THE CERTIFICATE WAS NOT IN EXISTENCE AS ON 31.12.2008. HOW IT CAN APPLY RETROSPECTIVELY? THE AR CONTENDED THAT THE ACL HAS APPLIED TO THE AO FOR THE ISSUE OF CERTIFICATE U/S. 197 OF THE ACT BEFORE HAND, BUT HE WAS NOT AWARE OF ABOUT THE DATE WHEN THE APPLICATION WAS MADE, WHETHER THE APPLICATION IS MADE PRIOR TO 31.12.2008 OR SUBSEQUENT TO THAT DATE. 4. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF AO. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CERTIFICATE ISSUED BY THE AO U/S. 197 OF THE ACT TO ACL. WE NOTED FR OM THE SAID CERTIFICATE THAT THE CERTIFICATE HAS BEEN ISSUED ON 31.03.2009 FOR THE FY 2008 - 09 FOR DEDUCTING THE TAX AT SOURCE @ 7% IN CASE OF THE INTEREST PAID TO ACL. IT IS NOT DENIED THAT AS ON 31.12.2008 A SUM OF RS.13,39,91,914/ - HAS BEEN CREDITED AS INTEREST BY THE ASSESSEE TO ACL. THIS INTEREST WAS ALSO SUBJECT TO TDS U/S. 194A OF THE ACT. AS ON 31.12.2008 THE CERTIFICATE ISSUED BY THE AO WAS NOT IN EXISTENCE. THE LD. AR COULD NOT ADDUCE ANY COGENT MATERIAL/EVIDENCE WHICH MAY PROVE THAT THE ACL HA S APPLIED TO THE AO PRIOR TO 31.12.2008 FOR DEDUCTING TDS AT THE LOWER RATE. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES SET ASIDE THE ORDER OF 3 ITA NO 153 /K/201 2 GUJARAT HYDROCARBONS & POWER SEZ LTD. LTD. , AY:200 9 - 1 0 CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT THE AO SHALL RE - ADJUDICATE THIS ISSUE IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE COPY OF THE APPLICATION, THE ACL HAS MADE BEFORE THE AO FOR DEDUCTING THE TDS AT A LOWER RATE U/S. 197 OF THE ACT. IN CASE THE AO FINDS THAT ACL HAS APPLIED TO THE AO FOR ISSUE OF A CERTIFICATE U/S. 197 OF THE ACT FOR DEDUCTING THE TDS AT LOWER RATE PRIOR TO 31.12.2008, THE TDS SHOULD BE COMPUTED ON THE SUM OF RS.13,39,91,914/ - AT THE RATE OF 7% OTHERWISE THE TDS IN RESPECT OF THE SAID AMOUNT BE COMPUTED @ 20% AS HAS BEEN COMPUTED IN THE ORIGINAL ORDER DATED 22.03.2010. THUS, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 7 . ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 3 . 0 4 . 2 0 1 5 S D / - S D / - ( MAHAVIR SINGH ) ( P. K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 3 T H APRIL , 2014 JD.(SR.P.S.) - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT GUJARAT HYDROCARBONS & POWER SEZ LTD., ASSAM HOUSE, 52, CHOWRINGHEE ROAD, KOLKATA - 700 071. 2 / RESPONDENT DCIT, CIRCLE - 57 (TDS) , KOLKATA. 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .