M/s Medsave Healthcare (TPA) Ltd, New Delhi V. DCIT, Ghaziabad

ITA 1916/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3419 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 08-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB SENIOR
• Assessee Lawyers: SANJAY J OSHI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1916/DEL./2016 (ASSESSMENT YEAR : 2012-13) M/S. MEDSAVE HEALTHCARE (TPA) LTD., VS. DCIT, F 701, LADO SARAI, CPC TDS, VAISAHLI, NEW DELHI 110 030. GHAZIABAD. (PAN : AABCS8148M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY JOSHI, CA REVENUE BY : SMT. ASHIMA NEB, SENIOR DR DATE OF HEARING : 12.02.2018 DATE OF ORDER : 19.02.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, M/S. MEDSAVE HEALTHCARE (TPA) LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE COMPANY) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED OR DER DATED 18.02.2016 PASSED BY LD. CIT(APPEALS)-41, NEW DELHI QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.1916/DEL./2016 2 1. THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING INTEREST ON LATE PAYMEN TS OF TDS AND HAS FAILED TO APPLY HER MIND TO THE FACTS A ND CIRCUMSTANCES OF THE CASE BY IGNORING THE STAY ORDE R OF THE HONBLE DELHI HIGH COURT WHEREIN NO RECOVERIES WERE TO BE MADE PURSUANT TO THE CIRCULAR NO.8/2009 DT. 24.11.2009 AND HENCE THE IMPUGNED ORDER BEING BAD I N LAW IS TO BE SET ASIDE. 2. THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO BY IGNORING JUDICIAL PRECEDENTS AN D THE DECISION BY LD. CIT (A) IN THE APPELLANTS CASE FOR AY 2011-12 (FY 2010-11) WITHOUT COGENT REASONS AND HENCE THE ORDER BEING BAD IN LAW NEEDS TO BE SET AS IDE. 3. THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE AO IN A MECHANICAL, ARBITRARY AND AD-HOC MANNER WITHOUT CONSIDERING THE HARDSHIP AND FINANCIAL INSTABILITY THAT THE ASSESSEE WILL GO THROUGH WHICH IS AGAINST NATURAL JUSTICE AND HENCE THE ORDER NEEDS T O BE STRUCK DOWN. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : THE ASSESSEE COMPANY IS A THIRD PARTY ADMINISTRATOR FOR INSURANCE COMPANIES AND MADE PAYM ENT TO VARIOUS HOSPITALS UNDER CASHLESS SCHEME ON BEHALF O F SUCH INSURANCE COMPANIES. ON THE BASIS OF COMPUTER GENE RATED ORDER/INTIMATION UNDER SECTION 154 OF THE INCOME-TA X ACT, 1961 (FOR SHORT THE ACT), INTEREST HAS BEEN CHARGED U/ S 201(1A) OF THE ACT FOR LATE PAYMENT OF TDS BY THE ASSESSEE COMPANY . 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING ITA NO.1916/DEL./2016 3 AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. BARE PERUSAL OF PARA 4.7 OF THE IMPUGNED ORDER P ASSED BY THE LD. CIT (A) GOES TO PROVE THAT THE LD. CIT (A) BY T AKING NOTICE OF THE FACT THAT THE ASSESSEE COMPANY IS ENTITLED TO B E HEARD TO EXPLAIN THE COMPUTATION OF INTEREST U/S 201(1A) AND CONSEQU ENTLY DIRECTED THE AO TO PROCEED IN THE MATTER. FOR FACILITY OF R EFERENCE, PARA 4.7 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) IS REPRODUCED AS UNDER :- 4.7 IT IS SEEN THAT THE INTIMATION U/S 154 HAS BEE N PASSED BY CPC-TDS. THE APPELLANT HAS CONTENDED THAT THE LIMIT ATION HAS BEEN PROCESSED IN A MECHANICAL MANNER WITHOUT CONSI DERING HARDSHIP AND FINANCIAL INSTABILITY THAT THE ASSESSE E WILL GO THROUGH. IN MY VIEW, CHARGING OF INTEREST U/S 201(1 A) CANNOT BE QUESTIONED ON THE BASIS OF FINANCIAL CONDITION OF T HE ASSESSEE AND RECOVERY OF DEMAND IS CONSEQUENTIAL IN NATURE. HOWE VER, CONSIDERING THE SPECIAL CIRCUMSTANCES IN VIEW OF TH E HIGH COURT ORDER, APPELLANT SHOULD GET AN OPPORTUNITY TO EXPLA IN THE COMPUTATION OF INTEREST U/S 201(1A) BEFORE THE AO. THE AO IS DIRECTED TO GIVE THE APPELLANT AN OPPORTUNITY TO SU BMIT DETAILED CALCULATION OF TAXES DEDUCTED AND DEPOSITED AND TO CHARGE INTEREST AS PER LAW, AFTER DUE VERIFICATION OF THE SAME. 6. WHEN UNDISPUTEDLY ORDER / INTIMATION HAS BEEN PA SSED U/S 154 BY CPC TDS IN A MECHANICAL MANNER WITHOUT PRO VIDING AN ITA NO.1916/DEL./2016 4 OPPORTUNITY OF BEING HEAD TO THE ASSESSEE AND THERE BY ENHANCED THE TAX LIABILITY OF THE ASSESSEE COMPANY, PROVISIONS C ONTAINED U/S 154 (3) OF THE ACT ARE ATTRACTED MAKING IT OBLIGATORY O N THE PART OF THE REVENUE TO PROVIDE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE COMPANY. SO, IN THESE CIRCUMSTANCES, IMPUGNED ORDE R PASSED BY THE LD. CIT (A)IS NOT SUSTAINABLE IN THE EYES OF LA W AND CONSEQUENTLY FILE IS ORDERED TO BE REMANDED TO AO T O DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE COMPANY. 7. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE ST ANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF FEBRUARY, 2018. SD/- SD/- (B.P. JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 19 TH DAY OF FEBRUARY, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-41, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.