M/s. Food Corporation of India, JODHPUR V. ACIT (TDS), SRIGANGANAGAR

ITA 157/JODH/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99646 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Assessee Lawyers: N R MERTIA
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR JODHPUR BENCH, JODHPUR BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.C. GUPTA G.C. GUPTA G.C. GUPTA G.C. GUPTA, , , , HONBLE HONBLE HONBLE HONBLE VICE VICE VICE VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI R.C. SHARMA R.C. SHARMA R.C. SHARMA R.C. SHARMA, , , , HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT HON'BLE ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 157/JODH/2014, 158/JODH/2014 & 159/JODH/2014 157/JODH/2014, 158/JODH/2014 & 159/JODH/2014 157/JODH/2014, 158/JODH/2014 & 159/JODH/2014 157/JODH/2014, 158/JODH/2014 & 159/JODH/2014 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2008 2008 2008 2008 - -- - 09, 2009 09, 2009 09, 2009 09, 2009 - -- - 10 & 2010 10 & 2010 10 & 2010 10 & 2010 - -- - 11 1111 11 M/S FOOD CORPORATION OF M/S FOOD CORPORATION OF M/S FOOD CORPORATION OF M/S FOOD CORPORATION OF INDIA, INDIA, INDIA, INDIA, 159 159 159 159- -- -P PP P- -- -BLOCK, BLOCK, BLOCK, BLOCK, SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. PAN : JDHFO0234D. PAN : JDHFO0234D. PAN : JDHFO0234D. PAN : JDHFO0234D. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.R. MERTIA, CA. RESPONDENT BY : SHRI S.L. MAU RYA, DR. DATE OF HEARING : 02.09.2015 02.09.2015 02.09.2015 02.09.2015 DATE OF PRONOUNCEMENT: 04.09.2015 04.09.2015 04.09.2015 04.09.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT PER G.C. GUPTA, VICE PRESIDENT : :: : THESE THREE APPEALS BY THE ASSESSEE FOR THE ASSESS MENT YEARS 2008-09, 2009-10 & 2010-11 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), BIKANER DATED 30 TH DECEMBER, 2013. THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. 2. IN ALL THESE APPEALS, THE ASSESSEE HAS RAISED ID ENTICAL GROUNDS OF APPEAL, ALTHOUGH THE AMOUNTS ARE DIFFERENT. WE REP RODUCE THE GROUNDS OF APPEAL OF THE ASSESSEE IN ITA NO.157/JOD H/2014 HERE UNDER:- 1. THE LD.CIT(A) (BIKANER) ERRED IN LAW AND FACTS AS WELL AS IN VIEW OF THE PLEADINGS MADE BEFORE HIM IN REJECTING THE APPEAL OF THE APPELLANT. HIS ACTION MAY, THEREFORE, KINDLY BE CANCELLED ALONG WITH THE ORDER OF ITA-157 TO 159/JODH/2014 2 LD.A.O. BEFORE HIM LEVYING TAX U/S 201(1) AND INTER EST U/S 201(1A) OF THE ACT. 2. THAT, IN THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN MAINTAINING THE CREATION OF DEMAND U/S 201, RS.19,11,126/-, ALONG WITH LEVY OF INTEREST U/S 201 (1A), RS.23,754/-, TOTALING RS.19,34,880/- OF THE I.T. AC T, THE SAME MAY KINDLY BE CANCELLED ALLOWING THE GROUNDS O F APPEAL OF THE APPELLANT. 3. THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN VIEW OF THE STATUTORY AND OTHER APPLICA BLE PROVISIONS, THE LD.CIT(A) ERRED IN FACTS AND IN LAW IN MAINTAINING AND UPHOLDING THE ACTION OF LD.A.O. HOL DING THAT THE APPELLANT FAILED TO DEDUCT TAX AT SOURCE O R FOR DEDUCTING TAX AT INCORRECT RATE AND SECTION RESULTI NG IN SHORT DEDUCTION AND/OR IT FAILED IN DEPOSITING SUCH TAX INTO GOVERNMENT ACCOUNT. THIS FINDING IS CONTRARY TO THE STATUTORY PROVISIONS, WHICH COULD NOT BE APPREC IATED PROPERLY AS THE LD.A.O. 4. THAT THE LD.A.O. AND THE LD.CIT(A), ERRED IN LAW AND FACTS IN CREATING AND MAINTAINING THE LIABILITY AGA INST THE APPELLANT U/S 201 OF THE ACT FOR NON-DEDUCTION/ SHORT DEDUCTION OF TAX BY TREATING THE APPELLANT AS ASSES SEE IN DEFAULT AND HAD FURTHER ERRED IN LEVYING INTERES T U/S 201(A) OF THE ACT, AS PER VARIOUS ANNEXURES AND DET AILS GIVEN ON PAGE NO.12 OF THE COMMON ORDER FOR 3 ASST. YEARS. 5. THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, IN VIEW OF THE OTHER APPLICABLE STATUTORY PROVISIONS, AS WELL AS THE WRITTEN SUBMISSIONS AVAI LABLE BEFORE THE LD.A.O. AND THE LD.CIT(A), THE LD.CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN MAINTAINING AND UPHOLDING THE ACTION OF LD.A.O. IN INVOKING PROVISI ONS OF 194H IN RESPECT OF VARIOUS EXPENDITURES INCURRED BY AGENTS FOR AND ON BEHALF OF THE APPELLANT WHICH WER E REIMBURSABLE IN NATURE AS DETAILED IN THE CHART BEL OW. THESE WERE REIMBURSED TO THEM, AS THOSE WERE NOT TH E PAYMENT OF INCOME NATURE UNDER THE ACT, AND AS PER SECTION 194H OF THE ACT, THE LD.CIT(A) FURTHER ERRE D IN MAINTAINING THE FINDING OF HOLDING APPELLANT AS ASS ESSEE IN DEFAULT AS PER SECTION. 201(1) AS PER DETAIL GIV EN HEREUNDER AND ALSO GIVEN BY LD.A.O. AT PAGE NO.12 O F HIS ORDER FOR WRONG DEDUCTION AND SHORT DEDUCTION O F TAX UNDER DIFFERENT SECTIONS AMONGST OTHERS PARTICU LARLY ITA-157 TO 159/JODH/2014 3 SECTION. 194H AND THEREBY FURTHER ERRED IN LEVYING INT. U/S. 201(1A) OF THE ACT AS PER SUMMARY AVAILABLE AT PAGE NO.12 AS DETAILED HEREUNDER:- S.NO. NATURE OF PAYMENT NATURE OF DEFAULT ANNEXURE AS PER AO'S ORDER F.Y. 2007- 08 F.Y. 2008- 09 F.Y. 2009- 10 1 MANDI LABOUR 194H PAY MENT TREATED AS COMMISSION PAYMENT B 101483 170219 339971 2 MANDI ARHAT 194H PAYMENT TREATED AS COMMISSION PAYMENT C 374035 763433 111888 3 MANDI CHARGES 194H PAYMENT TREATED AS COMMISSION PAYMENT D 261078 557050 218866 4 INTERNAL MOVEMENT/HANDLING CHARGES 194H PAYMENT TREATED AS COMMISSION PAYMENT E 250480 436122 168203 5 ADMINISTRATIVE CHARGES PAYMENT TREATED AS COMMISSION PAYMENT F 401633 749907 266640 THE LD.CIT(A) ERRED IN MAINTAINING THE TOTAL LIABIL ITY CREATED BY LD.A.O. INVOKING ABOUT FURTHER AMOUNTING TO RS.:- 19,34,880/-. 6. THAT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND WITHOUT PREJUDICE TO GROUND NO.5 ABOVE, A ND IN THE ALTERNATIVE, IT IS URGED THAT IN ANY EVENT, IF IT IS HELD THAT TDS LIABILITY ON THE APPELLANT WAS THERE, THEN IN THAT CASE ALSO, SUCH LIABILITY WAS NOT U/S 194H, AS IT WAS NOT APPLICABLE, BECAUSE ALL THESE PAYMENTS WERE COVERED BY SECTION 194C ONLY. THEREFORE, THE LD.AO AND CIT(A) HAS ERRED IN INVOKING SECTION 194H ON THESE ITA-157 TO 159/JODH/2014 4 VARIOUS NATURE OF EXPENDITURE NARRATED IN SERIAL NO .1-5 ABOVE IN THE CHART, WHICH WERE ONLY REIMBURSEMENT T O PROCUREMENT AGENTS WITHOUT ANY PROFIT MOTIVE. 7. THAT THE LD.A.O. ERRONEOUSLY ERRED IN HOLDING TH E APPELLANT AS ASSESSEE IN DEFAULT IN RESPECT OF PAYM ENT OF SALARY IN VIEW OF SECTION 192 BECAUSE THAT SECTI ON ITSELF PERMITS AN ASSESSEE TO REDUCE/INCREASE/ADJUS T THE SHORT/EXCESS DEDUCTION OF TDS IN SUBSEQUENT DEDUCTIONS DURING THE YEAR. THUS, THE LD.CIT(A) AL SO ERRED IN CONFIRMING SUCH ACTION OF LD.A.O. 3. IN ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS TAK EN GROUND NO.8 ALSO AS ADDITIONAL GROUND, WHICH READS AS UNDE R:- 8. THAT, IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD.AO HAS ERRED IN FACTS AND LAW AND THEREBY LD.CIT(A) ALSO ERRED IN MAINTAINING THE LEVY OF SUR CHARGE ON THE TDS MADE BY THE APPELLANT U/S 194C FOR AY 2010-11, FOR WHICH IT WAS NOT LIABLE TO DEDUCT. TH E SURCHARGE WAS NOT CHARGEABLE FOR THIS ASST. YEAR. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED A VOLUMINOUS PAPER BOOK CONSISTING OF PAG ES 1 TO 236 AND ALSO OF CASE LAW FROM PAGES 1 TO 49 BEFORE THE TRIB UNAL. HE SUBMITTED THAT WITHOUT CONSIDERING COPIES OF VARIOUS DOCUMENT S FILED IN THE COMPILATION BEFORE THE TRIBUNAL, THE ISSUES BEFORE THE TRIBUNAL COULD NOT BE ADJUDICATED. HOWEVER, HE FAIRLY CONCEDED TH AT CERTAIN DOCUMENTS IN THE COMPILATION FILED BY THE ASSESSEE MAY NOT HAVE BEEN FILED BEFORE THE ASSESSING OFFICER OR BEFORE THE CI T(A). HE SUBMITTED THAT THE ASSESSEE COULD NOT FILE AFFIDAVIT REQUIRED IN THE CIRCUMSTANCES DUE TO CHANGE IN THE CONCERNED OFFICIAL OF THE ASSE SSEE I.E. FOOD CORPORATION OF INDIA AND, IN THESE CIRCUMSTANCES, I T SHALL BE IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUES IN THE GR OUNDS OF APPEAL OF THE ASSESSEE TO THE FILE OF THE ASSESSING OFFICER FOR F RESH DETERMINATION IN ACCORDANCE WITH LAW. ITA-157 TO 159/JODH/2014 5 5. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESS ING OFFICER AND THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT( A) AND ALSO THE COPIES OF VARIOUS DOCUMENTS FILED IN THE COMPILATIO N BEFORE THE TRIBUNAL. WE FIND THAT FOR PROPER ADJUDICATION OF THE ISSUES RAISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL, THE COPIES O F THE DOCUMENTS FILED IN THE COMPILATION BY THE ASSESSEE HAVE TO BE REFERRED TO AND CONSIDERED. THE ASSESSEE IS NOT IN A POSITION TO C ERTIFY THAT THESE DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER A ND THE CIT(A) AND HAS GIVEN A NOTE IN THE CERTIFICATE BELOW THE IND EX OF THE COMPILATION THAT THESE PAPERS MIGHT BE OR MIGHT NOT BE PLACED O N RECORD BUT WERE SHOWN AND EXPLAINED TO THE ASSESSING OFFICER. THE ASSESSEE HAD ALSO NOT FILED AFFIDAVIT DUE TO CHANGE IN THE OFFICIAL C ONCERNED. IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE CONSIDER THAT IT SHALL BE JUSTIFIED TO RESTORE THE ISSUES IN THE GROUNDS OF APPEAL OF THE ASSESSEE FOR ALL THE THREE ASSESSMENT YEARS TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO N TO FRAME A DE NOVO ORDER IN ACCORDANCE WITH LAW AFTER ALLOWING REASONA BLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHALL BE A T LIBERTY TO PLEAD ITS CASE AND FILE DOCUMENTARY EVIDENCE IN SUPPORT THERE OF. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE DEPARTMENT IN THE FRAMING OF THE DE NOVO ORDER. WE DIRECT ACCORDINGLY. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 04.09.2015 . SD/- SD/- ( (( ( R.C. SHARMA R.C. SHARMA R.C. SHARMA R.C. SHARMA ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-157 TO 159/JODH/2014 6 COPY FORWARDED TO: - 1. APPELLANT : M/S FOOD CORPORATION OF INDIA, M/S FOOD CORPORATION OF INDIA, M/S FOOD CORPORATION OF INDIA, M/S FOOD CORPORATION OF INDIA, 159 159 159 159- -- -P PP P- -- -BLOCK, SRIGANGANAGAR. BLOCK, SRIGANGANAGAR. BLOCK, SRIGANGANAGAR. BLOCK, SRIGANGANAGAR. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME T AX (TDS), ASSISTANT COMMISSIONER OF INCOME TAX (TDS), ASSISTANT COMMISSIONER OF INCOME TAX (TDS), ASSISTANT COMMISSIONER OF INCOME TAX (TDS), SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. SRIGANGANAGAR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR