Paulomi Subramaniam Iyer, Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-4(2), Ahmedabad

ITA 1926/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6092 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 21-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER , .., ./ ITA NO. 1926/AHD/2016 / ASSESSMENT YEAR: 2012-13 PAULOMI SUBRAMANIAM IYER, 401, GALA MART, SUNCITY ROAD, OFF. S.P. RING ROAD, SOUTH BOPAL, AHMEDABAD-380 058 PAN : AAQPI 3927 C VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-4(2), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SUNIL TALATI, CA REVENUE BY : MEENAKSHI DOHRE, SR DR # / DATE OF HEARING : 14/02/2018 ( * / DATE OF PRONOUNCEMENT : 20/02/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD. CIT(A)-4, AHMEDABAD DATED 24.05.2016 PASSED FOR ASS ESSMENT YEAR 2012-13. THOUGH THE ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEA L WHICH ARE ARGUMENTATIVE AND DESCRIPTIVE IN NATURE, BUT HER GRIEVANCE REVOLV ES AROUND A SINGLE ISSUE VIZ. THE LD. ASSESSING OFFICER HAS ERRED IN NOT ALLOWING TDS CREDIT OF RS.33,09,000/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HER RETURN OF INCOME ON 28.09.2012 DECLARING TOTAL INCOME OF RS. 2,49,83,210/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE HAS RENDERED SERVICES IN THE FIEL D OF SAP IMPLEMENTATION TO ONE OF ITS CLIENTS NAMELY M/S. JAIN INFRAPROJECTS L IMITED, A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT 5 TH FLOOR, PREMLATA, 39, SHAKESPEARE ITA NO.1926/AHD/2016 PAULOMI SUBRAMANIAM IYER VS. DCIT AY : 2012-13 - 2 SARANI, KOLKATA. THE ASSESSEE HAD RAISED THREE INV OICES AGGREGATING TO RS.3,30,90,000/-; EACH INVOICE WAS OF RS.1,10,30,00 0/-. ACCORDING TO THE ASSESSEE, THE PAYER HAS DEDUCTED TAX AT SOURCE AT R S.33,09,000/- AND MADE THE PAYMENT OF BALANCE. THE ASSESSEE CLAIMED CREDIT OF THE TDS WHICH WAS DENIED TO HER ON THE GROUND THAT PAYER HAS NOT DEPOSITED T HE MONEY IN THE GOVERNMENT TREASURY. THOUGH THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER, BUT THE ASSESSING OFFICER DID NOT GRANT CREDIT, HEN CE, DISSATISFIED WITH THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DISMISSED THE APPEAL OF T HE ASSESSEE BY OBSERVING THAT SINCE THE ASSESSEE FAILED TO PURSUE THE MATTER WITH THE PAYER, IT APPEARS THAT NO TAX WAS DEDUCTED AT SOURCE. THE FINDINGS RECOR DED BY THE LD. CIT(A) IN HIS ORDER AT PARAGRAPH NO.5.1 READ AS UNDER:- 5.1 THE FACTS OF THE CASE AND SUBMISSION OF THE A PPELLANT HAS BEEN CONSIDERED. THE APPELLANT FILED COPY OF LETTER FROM M/S. JAIN I NFRAPROJECTS LTD STATING THAT TDS HAS BEEN DONE BUT INSPITE OF MORE THAN 3 YEARS TIME, THE DEDUCTOR HAS NOT DEPOSITED SINGLE RUPEE TO THE GOVT. EXCHEQUER. AT THE SAME TIME, THE APPELLANT DID NOT PRODUCE ANY DOCUMENT TO SHOW THAT THE APPEL LANT WAS PURSUING THE MATTER WITH THE DEDUCTOR TO DEPOSIT THE SAME TO THE GOVT. ACCOUNT. THE TAX DEDUCTED AS CLAIMED IS HUGE AMOUNT AND APPELLANT NE ITHER MADE ANY CORRESPONDENCE WITH THE DEDUCTOR IN THIS REGARD NOR ANY LEGAL ACTION HAS BEEN TAKEN BY THE APPELLANT AGAINST THE SO CALLED DEDUC TOR. THESE FACTS PROVE THAT THIS IS NOT A CASE OF TAX DEDUCTED AT SOURCE. THE LETTER GIVEN BY THE PAYER CANNOT BE BELIEVED AS HE DID NOT DEPOSIT SINGLE RUPEE OUT OF THE SO CALLED TDS. LOOKING TO THESE FACTS, THE PROVISIONS OF SECTION 199 & 205 AR E NOT APPLICABLE TO THE APPELLANTS CASE, THEREFORE, APPEAL OF THE APPELLAN T IS DISMISSED. 3. LEARNED COUNSEL FOR THE ASSESSEE, WHILE IMPUGNIN G THE ORDERS OF THE REVENUE AUTHORITIES, TOOK US THROUGH THE PAPERS, I. E. INVOICES RAISED BY THE ASSESSEE, LETTER OF M/S. JAIN INFRAPROJECTS LIMITED , TDS DETAILS ETC. HE FURTHER CONTENDED THAT SECTION 205 OF THE INCOME-TAX ACT PU TS BAR UPON THE ASSESSING OFFICER FOR AFFECTING THE RECOVERY AGAINST AN ASSES SEE WHOSE RECEIPTS HAVE ALREADY SUFFERED TDS. IN THE PRESENT CASE ALSO THE DEMAND CANNOT BE ENFORCED AGAINST THE ASSESSEE, BECAUSE THE TDS HAS ALREADY B EEN DEDUCTED. ITA NO.1926/AHD/2016 PAULOMI SUBRAMANIAM IYER VS. DCIT AY : 2012-13 - 3 4. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD TO THE PROPOSITION THAT SECTION 205 OF THE INCOME-TAX ACT PROHIBITS THE ASSESSING O FFICER FOR ENFORCING THE DEMAND AGAINST THE ASSESSEE WHO HAS ALREADY SUFFERE D TDS ON THE RECEIPTS RECEIVED FROM THE PAYER. WE DEEM IT APPROPRIATE TO TAKE NOTE OF SECTION 205, WHICH READS AS UNDER:- 205. WHERE TAX IS DEDUCTIBLE AT THE SOURCE UNDER T HE FOREGOING PROVISIONS OF THIS CHAPTER, THE ASSESSEE SHALL NOT BE CALLED UPON TO P AY THE TAX HIMSELF TO THE EXTENT TO WHICH TAX HAS BEEN DEDUCTED FROM THAT INCOME. 6. THE CONTENTION OF THE LEARNED COUNSEL FOR THE AS SESSEE TO THE EXTENT OF APPLICATION OF SECTION 205 IS CONCERNED, THEY DESER VE TO BE ACCEPTED AND IT IS TO BE HELD THAT DEMAND AGAINST THE ASSESSEE CANNOT BE EFFECTED IF HER RECEIPTS HAVE ALREADY SUFFERED TAX AT SOURCE; HOWEVER, THERE IS A DIFFERENCE IN THE VERSION PUT FORTH BY THE ASSESSEE VIS--VIS CONSTRUED BY THE RE VENUE. THE LD. CIT(A) HAS RECORDED A FINDING THAT FACTS INDICATE THAT NO TAXE S WERE DEDUCTED. ON THE OTHER HAND, ASSESSEE PLEADED THAT TDS WAS MADE BY THE PAY ER. WE FIND THAT NONE OF THE AUTHORITY HAS CARRIED OUT ANY INVESTIGATION IN THIS CONNECTION. THE ALLEGED CORRESPONDENCE SUBMITTED BEFORE US WAS NEVER CROSS VERIFIED. WE FAIL TO UNDERSTAND THE BASIS OF RECORDING THE FINDING BY TH E LD. CIT(A) IN PARAGRAPH NO.5.1 EXTRACTED SUPRA. HOW THE LD. FIRST APPELLAT E AUTHORITY REACHED AT CONCLUSION THAT TAX WAS NOT DEDUCTED AT SOURCE? THI S CONCLUSION HAS BEEN BASED ON THE INFERENCE THAT SINCE THE ASSESSEE FAILED TO PURSUE LEGAL REMEDIES AGAINST THE DEDUCTOR FOR PERSUADING HIM TO DEPOSIT THE DEDU CTED AMOUNT IN THE GOVERNMENT TREASURY. THIS INFERENCE IS TOTALLY MISP LACED. IT IS NOT SUPPORTED BY ANY EVIDENCE. CONSIDERING THIS ASPECT, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. T HE ASSESSING OFFICER SHALL FIRST DETERMINE AS TO WHETHER ON THE ALLEGED PAYMENT RECE IVED BY THE ASSESSEE, TDS ITA NO.1926/AHD/2016 PAULOMI SUBRAMANIAM IYER VS. DCIT AY : 2012-13 - 4 WAS TO BE DEDUCTED OR NOT. IF DEDUCTED, THEN WHETH ER THE PAYER HAS DEDUCTED THE TAX OR NOT. IF IT IS ESTABLISHED THAT PAYER HAS DEDUCTED THE TAX, THEN THE LD. ASSESSING OFFICER SHALL FOLLOW THE PROCEDURES LAID DOWN IN SECTION 205 OF THE INCOME-TAX ACT AND SHOULD NOT ENFORCE THE DEMAND AG AINST THE ASSESSEE. IN CASE THE TDS WAS NOT DEDUCTED, THEN THE LD. ASSESSI NG OFFICER WILL BE AT LIBERTY TO ENFORCE THE DEMAND AGAINST THE ASSESSEE. THE ASS ESSING OFFICER SHALL RE- ADJUDICATE THIS ISSUE AFTER PROVIDING DUE OPPORTUNI TY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20 TH FEBRUARY, 2018 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (RAJPAL YA DAV) JUDICIAL MEMBER AHMEDABAD; DATED, 20/02/2018 BIJU T., SR.PS # ()* +*/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - / CONCERNED CIT 4. - ) ( / THE CIT(A)- 5. * (( , , /DR,ITAT, AHMEDABAD, 6. 6 / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) ITAT, AHMEDABAD 1. DATE OF DICTATION 15.02.2018.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : .. 15.02.2018 3. OTHER MEMBER20.02.2018 .. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S20.02.2018 . 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 20.02.2018 .. 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S20.02.2018 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.02.2018 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 10. DATE OF DESPATCH OF THE ORDER