Central Silk Board Ministry of Textiles , Bangalore V. The Income TAx Officer TDS Ward-16(2), Bangalore

ITA 1560/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7043 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 17-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NOS.1559 TO 1561/BANG/2017 ASSESSMENT YEARS : 2011-12 TO 2013-14 CENTRAL SILK BOARD, MINISTRY OF TEXTILES, GOVERNMENT OF INIDA, CENTRAL SILK BOARD COMPLEX, B. T. M. LAYOUT, HOSUR ROAD, MADIWALA, BENGALURU-560 068. PAN : BLRCO 5328 B VS. INCOME TAX OFFICER, TDS WARD 16(2), ROOM NO. 410, IV FLOOR, HMT BHAVAN, 59, BELLARY ROAD, GANGA NAGAR, BENGALURU 560 032. APPELLANT RESPONDENT ASSESSEE BY : SHRI. NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI. PARDEEP KUMAR, JCIT DATE OF HEARING : 22.11.2017 DATE OF PRONOUNCEMENT : 22.12.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) ON COMMON GROUNDS. THEREFORE, THESE APPEALS WERE HEAR D TOGETHER AND DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER. SINCE COMMON GROUNDS ARE RAISED IN THESE APPEALS, WE EXTRACT THE GROUNDS RAISED IN ITA NO.1559/BANG/2017 AS UNDER: 1. THE LEARNED COMMISSIONER ( APPEALS ), ON FACTS A ND IN LAW, ERRED IN SUSTAINING THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTIONS 201(1) & 201(1A) TREATING THE APPELLANT AS AN ASSESSEE IN DE FAULT IN RESPECT OF ITS ALLEGED NON-DEDUCTION OF TAX AT SOURCE ON THE PERQU ISITE VALUE OF UNFURNISHED ACCOMMODATION PROVIDED TO ITS EMPLOYEES AND LEVYING INTEREST THEREON. 2. THE LEARNED COMMISSIONER ( APPEALS ) ERRED IN UP HOLDING THE FINDINGS OF THE ASSESSING OFFICER THAT THE APPELLANT IS AN A UTONOMOUS ORGANISATION AND THAT IT CANNOT BE TREATED AS GOVERNMENT. 3. THE LEARNED COMMISSIONER ( APPEALS ) FAILED TO A PPRECIATE THAT THE APPELLANT IS FINANCIALLY, FUNCTIONALLY AND ADMINIST RATIVELY CONTROLLED BY ITA NOS. 1559 TO 1561/BANG/2017 PAGE 2 OF 4 THE MINISTRY OF TEXTILES, GOVERNMENT OF INDIA, THAT IT IS ENTIRELY AND EXCLUSIVELY FUNDED BY THE GOVERNMENT OF INDIA. THAT IT IS NOT A REGISTERED SOCIETY OR A LIMITED COMPANY OR AN AUTO NOMOUS BODY AND THAT IT DOES NOT HAVE BYE-LAWS FOR ITS FUNCTIONING AND ACTIVITIES. 4. THE LEARNED COMMISSIONER (APPEALS ) ERRED IN UPH OLDING THE FINDING OF THE ASSESSING OFFICER THAT IT WAS REQUIRED TO VALUE THE UNFURNISHED ACCOMMODATION PROVIDED TO ITS EMPLOYEES IN TERMS OF SI. NO. 2 OF TABLE - I OF RULE 3 OF THE INCOME TAX RULES, 1962 W HICH IS APPLICABLE TO ACCOMMODATION PROVIDED BY PRIVATE EMPLOYERS. 5. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HA VE APPRECIATED THAT THE APPELLANT CONSTITUTED THE STATE WITHIN THE MEANING OF ARTICLE 12 OF THE CONSTITUTION OF INDIA AND THAT THE SALARIES TO ITS EMPLOYEES ARE PAID FROM THE CONSOLIDATED FUND OF INDIA AND ACCORD INGLY OUGHT TO HAVE HELD THAT THE EMPLOYEES OF THE APPELLANT ARE E MPLOYEES OF THE CENTRAL GOVERNMENT. 6. THE LEARNED COMMISSIONER ( APPEALS ) ERRED IN FOLLO WING THE DECISION OF THE HONBLE INCOME TAX APPELLATE TRIBUNAL - BANGALORE BENCH IN CENTRAL FOOD TECHNO LO GICAL RESEARCH INSTITUTE V. ITO IN ITA NOS. 1607 TO 1611/BANG/2013 WHICH IS DISTINGUISHABLE ON FACTS AN D THE RATIO OF WHICH IS NOT APPLICABLE TO THE CASE OF THE APPELLANT. 7. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HA VE FOLLOWED THE DECISIONS OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL - DELHI BENCH IN RAM KANWAR RANA V ITO 159 ITD 431 & PUNE 13. BEN CH IN SMT. SAPNA SANJAY RAISONI V. ITO 179 TTJ (PUNE) (UO) 34 RELIED UPON B Y THE APPELLANT AND ACCORDINGLY, OUGHT TO HAVE HELD THAT THE EMPLOYEES OF THE APPELLANT ARE EMPLOYEES OF THE CENTRAL GOVERNMENT. 8. THE LEARNED COMMISSIONER ( APPEALS ) ERRED IN HOLDI NG THAT GROUND NOS. 2. 13 & 14 ARE GENERAL IN NATURE AND, THEREFORE, DO NOT REQUIR E TO BE SEPARATELY ADJUDICATED. 9. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HA VE CONSIDERED GROUND NO. 2, THE SUBMISSIONS MADE IN SUPPORT THEREOF AND THE PROVISI ONS OF SECTION 201(3)(I) AND ACCORDINGLY, OUGHT TO HAVE HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IN SO FAR AS IT RELATED TO THE FIRST THREE QUARTERS ENDING 30.6.2010, 30.9.2010 & 31.12.2010 WAS BARRED BY LIMITATION. 10. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HAVE ADJUDICATED UPON GROUND NOS. 13 & 14 AND CONSIDERED THE SUBMISS IONS MADE IN SUPPORT THEREOF AND ACCORDINGLY, OUGHT TO HAVE QUAS HED THE ORDER PASSED BY THE ASSESSING OFFICER AS BEING BAD IN LAW , INVALID AND AB INITIO VOID AS THE APPELLANT HAD FILED THE QUARTERL Y STATEMENTS OF DEDUCTION OF TAX REFERRED TO IN SECTION 200(3) IN T HE STATUS OF' GOVERNMENT AND THE ASSESSING OFFICER HAD PASSED THE ORDER UNDER SECTIONS 201(1) & 201(1A) ON THE APPELLANT IN THE S TATUS OF ' SOCIETY/AUTONOMOUS BODY'. 11. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HAVE CONSIDERED GROUND NO. 8 RAISED BY THE APPELLANT BEFORE HER AND ACCORDINGLY, OUGHT TO HAVE HELD THAT THE TAX DEMANDED BY THE ASSESSING OFFICER UNDER SECTION 201(1) AMOUNTING TO RS. 5,80,299 WAS EXCESS IVE. 12. THE LEARNED COMMISSIONER ( APPEALS ) ERRED IN NOT C ONSIDERING AND ADJUDICATING UPON GROUND NOS. 9 TO 12 RAISED BY THE APPELLANT BEFORE HER. ITA NOS. 1559 TO 1561/BANG/2017 PAGE 3 OF 4 13. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO H AVE CONSIDERED GROUND NO. 9 AND THE SUBMISSIONS MADE IN SUPPORT THEREOF AND ACCORDI NGLY, OUGHT TO HAVE HELD THAT THE APPELLANT COULD NOT BE TREATE D AS AN ASSESSEE IN DEFAULT IN RESPECT OF EDUCATION CESS AND SECONDARY & HIGHER EDUCATION CESS ON INCOME TAX. 14. THE LEARNED COMMISSIONER ( APPEALS ) OUGHT TO HAVE ADJUDICATED UPON GROUND NOS. 10 & 11 AND CONSIDERED THE SUBMISSIONS MADE IN SUPPORT THEREOF AND ACCORDINGLY, OUGHT TO HAVE HELD THAT IN TEREST UNDER SECTION 201(1A) COULD NOT BE LEVIED ON THE APPELLANT. 15. THE LEARNED COMMISSIONER ( APPEALS ) FAILED TO TAKE NOTE OF THE WRITTEN SUBMISSIONS FILED BEFORE HER, THE VARIOUS DECISIONS RELIED UPON BY THE APPELLANT, THE VARIOUS DOCUMENTS FILED BEFORE HER, FACTS OF THE CASE AND THE WEIGHT OF EVIDENCE OF RECORD. 16. THE ORDER OF THE LEARNED COMMISSIONER ( APPEALS ) I S OPPOSED TO LAW AND FACTS OF THE CASE. 17. THE LEARNED COMMISSIONER ( APPEALS ) ERRED IN PASSI NG THE ORDER IN THE MANNER SHE DID. 18. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE IMPUGNED ISSUES ARE SQUARELY COV ERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2014-15 IN WHICH THE TRIBUNAL HAS RESTORED THE MATTER BACK TO THE AO TO RE-EXAMINE THE MATTER IN THE LIGHT OF THE DECISIONS REFERRED TO BY THE PARTIES. THEREFORE, IN THE LIGHT OF THESE F ACTS, THE MATTER SHOULD ALSO GO BACK TO THE AO. 3. THE LEARNED DR ON THE OTHER HAND HAS PLACED RELI ANCE UPON THE ORDER OF THE TRIBUNAL, BANGALORE BENCH, IN THE CASE OF CENTRAL F OOD TECHNOLOGICAL RESEARCH INSTITUTE VS. ITO IN ITA NOS. 1607 TO 1611/BANG/2013 IN WHICH THE TRIBUNAL, FOLLOWING THE JUDGMENT OF APEX COURT IN THE CASE OF ARUN KUMAR VS. UNION O F INDIA 286 ITR 89 (SC), APPROVED THE ADDITIONS CONFIRMED BY THE CIT(A). THE LEARNED DR HOWEVER CONTENDED THAT SINCE THE ISSUE IS COVERED BY THE TRIBUNAL ORDER AGAINST THE ASSESSEE, THE ORDER OF CIT(A) SHOULD BE CONFIRMED. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF AUTHORIT IES BELOW AND DOCUMENTS PLACED ON RECORD WE FIND THAT THERE WAS AMENDMENT IN RULE 3 O F IT RULES ACCORDING TO WHICH THERE ARE ONLY 2 CATEGORIES OF THE EMPLOYEES, ONE IS WITH REG ARD TO THE EMPLOYEES OF CENTRAL AND STATE GOVERNMENTS AND SECOND CATEGORY IS THE EMPLOY EES OF OTHERS. THIS ASPECT WAS NOT ITA NOS. 1559 TO 1561/BANG/2017 PAGE 4 OF 4 EXAMINED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE . THE ORDERS REFERRED TO BY THE REVENUE WAS ALSO NOT CONSIDERED BY THE TRIBUNAL IN ASSESSMENT YEAR 2014-15. 5. ON A CAREFUL PERUSAL OF THE ORDERS OF THE TRIBUN AL REFERRED TO BY THE ASSESSEE AS WELL AS REVENUE, WE FIND THAT IN BOTH THE ORDERS, CONTRA RY VIEWS ARE TAKEN BY THE TRIBUNAL. IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2014-15 , THE TRIBUNAL RESTORED THE MATTER BACK TO THE AO FOR READJUDICATION OF THE ISSUES AFR ESH. 6. HAVING CAREFULLY EXAMINED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE ISSUE OF CLAIMING OF DEDUCTION OF TAX AT SOURCE REQUIRES TO BE RE-EXAMINED IN THE LIGHT OF THIS ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CA SE FOR ASSESSMENT YEAR 2014-15 AND ALSO IN THE CASE OF CENTRAL FOOD TECHNOLOGICAL RESE ARCH INSTITUTE VS. ITO IN ITA NOS. 1607 TO 1611/BANG/2013. COPY OF THE CBDTS CIRCULAR NO. 113/2002 IS ALSO PLACED ON RECORD. THEREFORE, WE ARE OF THE VIEW THAT LET ALL THESE DO CUMENTS BE CONSIDERED BY THE AO WHILE DETERMINING THE ISSUE I.E., WHETHER THE ASSESSEE IS IN DEFAULT FOR DEDUCTION OF TAX AT SOURCE OR NOT. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE AO WITH A DIRECTION TO READJUDICATE THE ISSUE AFRESH I N TERMS INDICATED ABOVE. 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2017. SD/- SD/- (JASON P BOAZ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BANGALORE DATED : 22/12/2017 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 DR, ITAT, BANGALORE. 5 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.