Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 96787 (ITAT-COCHIN)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-11-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Next Hearing Date
23-11-2015
Assessment Year
2009-2010
Appeal Filed On
24-03-2015
Judgement Text
ITA NO . 198/COCH/2015 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & G EORGE GEORGE.K , J M ITA NO . 198/COCH/2015 (ASST YEAR 2009 - 10 ) SHRI T K AJIT KUMAR 39/1 UDAYA RASHMI KARAKAT ROAD ER A N AKULAM KOCHI - 682 016 VS THE ASST COMMR OF INCOME TAX CIRCLE 2(1), KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AAVPA8707F ASSESSEE BY SHRI T M SREEDHARAN REVENUE BY SHRI K P GOPAKUMAR, SR DR DATE OF HEARING 23TH NOV 2015 DATE OF PRONOUNCEMENT 24 TH , NOV 2015 OR D ER PER GEORGE GEORGE. K. J M: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE CIT (A) S ORDER DATED 15TH NOV 2014. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10. 2 BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE , AN INDIVIDUAL , IS DERIVING INCOME UNDER THE HEAD SALAR IES , AND BUSINESS FOR THE PREVIOUS YEAR RELEVANT TO AY 2009 - 10 . THE RETURN OF INCOME WAS ORIGINALLY FILED ON 30.9.2 009 DECLARING A TOTAL INCOME OF RS. 23,79,338/ - . THE ASSESSEE , T H E R E A F T E R , FILED REVISED RETURN ON 25.9.201 0 DECLARING A TOTAL INCOME OF RS. 68,19,338/ - . THE ASSESSMENT U/S 143(3) WAS COMPLETED ACCEPTING THE INCOME ITA NO . 198/COCH/2015 2 DECLARED IN THE ORIGINAL RETURN. THEREAFTER, T HE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT AND IN THE REASSESSMENT COMPLETED, THE INCOME DECLARED IN THE REVISE D RETURN AMOUNTING TO RS. 68,19,338/ - WAS ASSESSED. 3 AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY RASING THE FOLLOWING GROUND: 1 THE LEARNED ASSESSING AUTHORIT Y IS NOT JU S TIFI E D IN REJEC TIN G TH E SUBMISSION OF THE APPELLANT THAT T H E ACTUAL S ALAR Y RE CE I VED B Y TH E APPELLANT FROM M /S . OVER S EA S EDUCATION 4 YOU ( P) LTD . I S ONL Y R S. 9 , 00 , 000 / - AGAINST THE R E TURNED S ALAR Y INCOM E OF R S. 2 0 , 4 0 , 00 0 1 - FO R T H E A Y 2009 - 10 . THOUGH THE SALARY OFFERED BY THE EMPLOYER WA S RS . 20 , 4 0 , 000 1 - TH E OFFER WAS NOT AT ALL COMPLIED WITH S O FAR. THEY HAD MADE ONL Y A PA Y M E NT OF RS . 9 , 00 , 0 00 / - AGAINST THE OFFERED AMOUNT OF RS.20 , 40 , 000 1 - . 2 THE APPELLANT HAD MADE A PROVISION OF INTEREST ACCRU E D FOR EVERY YE A R AGAINST THE SECURITY DEPOSIT OF R S . 8 , 00 , 000 I - MADE TO M I S . 3M INDI A LI D . SINCE THE INTEREST INCOME WAS ALREADY RETURNED FOR TH E A . Y 20 08 - 09 AND ASSESSED , THE SAME INCOM E CANNOT AGAIN BE SUBJECT E D TO A SSESS M E NT ON IT S DISBURSAL . AS SUCH THE ADDITION OF RS. 5 7 , 414 1 - IS NOT AT ALL JU S TIFIABL E. TH E ADDITION THAT CAN BE MADE FOR AY 2009 - 10 IS ONLY THE DIFFER E NC E B E TW EE N THE AMOUNT PAID RS . 5 7 , 414 1 - AND THE PROVISION MADE R S .5 6 , 153 / - VI Z R S . 1 , 261 1 - . 3.1 THE CIT(A) REJECTED THE FIRST GROUND RAISED BY THE ASSESSEE AND ALLOWED THE SECOND GROUND. 4 AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS: ITA NO . 198/COCH/2015 3 1. THE ORDER OF THE HON 'BLE COMMISSIONER OF INCOME TAX (APPE A LS) IS NOT JUSTIFIED TO THE EXTENT IN NOT INTERFERING WITH THE ORDER OF THE ASSESSING AUTHORITY IN NOT ALLOWING DUE CREDIT TO BE GIVEN F OR TDS AGAINST S A LARY INCOME OF THE APPELLANT . 2. THE LEARNED AUTHORITIES AB OVE OUGHT TO HAVE FOUND THAT U/S 201(1)(B) OF THE INCOME TAX ACT 1961, IT IS THE PERSON WHO IS RESPONSIBLE TO DEDUCT AND REMIT TDS, DOES NOT DEDUCT OR NOT REMITTED AFTER SO DEDUCT ING BE TREATED AS AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX AND NOT THE DEDUCTEE. 3. THE APPELLANT SUBMIT THAT U / S 205 OF THE INC OME TAX ACT 1961, THE ASSESSING AUTHORITY IS BARRED FROM CALLING UPON THE DEDUCTEE - APPELLANT AGAIN TO REMIT TAX TO THE EX TENT TO WHICH TAX HAS BEEN DEDUCTED FROM THE SALARY INCOME. 4. APPELLANT HAS BEEN DEMANDED TO REMIT A SUM OF RS.15 , 24 , 070J - INCLUDING INTEREST, AGAINST SALARY INCOME DUE TO THE FAILURE ON THE PART OF THE EMPLOYERS FOR NON REMITTANCE OF TDS RECOVERED FROM THE SALARY INCOME OF THE APPELLANT. 5. NOW THE QUESTION BEFORE THE HON ' BLE TRIBUNAL FOR CONSIDERATION IS: (A) 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED IN NOT INTERFERING W ITH THE INSTANT CASE OF THE APPELLANT THAT AN EMPLOYER WHO HAS DEDUCTED TDS FROM SALARIES AND NOT . 4.1 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO DISPUTE WITH REGARD TO THE INCOME ASSESSED; HOWEVER , THE DUE CREDIT HAS NOT BEEN GIVEN FOR THE TAX DEDUCTED AT SOURCE AGAINST THE SALARY INCOME OF THE ASSESSEE. IT WAS SUBMITTED THAT NOT GIVING CREDIT FOR TDS RECOVERED BY THE EMPLOYERS, WHO WAS HOLDING VALID PAN/TAN AND ALSO ISSUED SALARY CERTIFICATE DECLARING TDS DEDUCTION, WOULD CAUSE GENUINE HARDSHI P TO THE ASSESSEE . IT WAS FURTHER SUBMITTED THAT IF THE TAX ON SALARY INCOME , WHICH IS ALREADY SUBJECTED TO TDS IS AGAIN DEMANDED FROM THE ASSESSEE, IT WOULD AMOUNT TO DOUBLE TAXATI ON, WHICH ITA NO . 198/COCH/2015 4 IS IMPERMISSIBLE. THE LD COUNS EL FOR THE ASSESSEE FURTHER REL YING ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF YASHPAL SAHNI VS REKHA HAJARNAVIS, R EPORTED IN 293 ITR 539(BOM) CONTENDED THAT , IF THE TAX HAS BEEN DE DUCTED BY THE EMPLOYER, THE SAME CANNOT BE RECOVERED FROM THE EMPLOYEE ON THE GROUND THAT THE EMPLOYER HAS NOT REMITTED TO THE GOVERNMENT ACCOUNT THE TAX DEDUCTED AT SOURCE. 4.2 ON THE OTHER HAND, THE LD DR SUBMITTED THAT THERE IS NO RECORD TO SHOW THAT TAX HAS BEEN DEDUCTE D BY THE EMPLOYER. IT WAS FURTHER SUBMITTED THAT IN ORDER TO VERIFY THE PROVISIONS OF SEC. 205 AS APPLICABLE, NECESSARILY THE MATTER NEEDS TO BE CONSIDERED AFRESH BY THE AO. 5 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE MATERIAL ON RECORD. TH E ASSESSEE HAS BEEN EMPLOYED DURING THE RELEVANT YEAR WITH THE FOLLOWING CONCERNS: I) B ANGALORE MANAGEMENT ACADEMY P LTD.,(BMA) FOR AN AGREED YEARLY SALARY OF RS. 24 LACS II) R&A OVERSEAS EDUCATION P LTD., (OE4U) ON AN AGREED YEARLY SALARY OF RS. 20,40 ,000/ - IT WAS CLAIMED BY THE ASSESSEE FOR THE ABOVE SALARY PAYMENT, THERE HAS BEEN TAX DEDUCTION AT SOURCE BY THE EMPLOYER, FOR A SUM OF RS. 6,40,580/ - IN THE CASE OF BMA AND AN AMOUNT OF RS 6,30,360/ - ON ACCOUNT OF RECEIPTS FROM OE4U. FOR THE RELEVANT YEAR THE TOTAL SALARY INCOME DECLARED BY THE ASSESSEE WAS ITA NO . 198/COCH/2015 5 RS. 44,40,000/ - ON THE BASIS OF SALARY CERTIFICATE FROM THE ABOVE TWO EMPLOYERS. THE ASSESSEE HAD CLAIMED TDS OF RS. 12,70,878/ - AGAINST THE SALARY INCOME RETURNED. THE ASSESSEE WAS NOT G IVEN TAX CREDIT OF RS. 12, 70,878/ - ; BUT ONLY RS. 93,790/ - . THE REASONING FOR NOT GIVING THE DUE CREDIT WAS THAT BMA HAD REMITTED ONLY RS. 60,00,000/ - AND OE4U HAD REMITTED ONLY SUM OF R S. 33,790/ - INTO THE GOVERNMENT ACCOUNT FOR THE R ELEVANT YEAR. IT IS NOT CLEAR FROM THE MATERIAL PLACED ON RECORD , WHETHER THE EMPLOYER S I.E BMS AND OE4U HAD ACTUALLY DEDUCTED TAX FROM THE SALARY DISBURSEMENT FOR A SUM OF RS.6,40,580/ - AND RS.6,30,360/ - RESPECTIVELY. IF THE EMPLOYER HAS DEDUCTED TAX, THE SAME AMOUNT SHOULD BE GIVEN DUE CREDIT TO THE EMPLOYEE IRRESPECTIVE WHETHER THE SAME HAS BEEN PAID IN THE GOVERNMENT ACCOUNT OR NOT. SECTION 205 OF THE I T ACT STIP ULATES THAT WHERE TAX IS DEDUCTIBLE AT SOURCE, THE ASSESSEE SHALL NOT BE CALLED UPON TO PAY THE TAX HIMSELF TO THE EXTENT TO WHICH T AX HAS BEEN DEDU CTED. W E ARE ALSO SUPPORTED BY THE JUDICIAL PRONOUNCEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VASHAL SAHNI (SUPRA) WHEREIN THEIR LORDSHIP WAS CONSIDERING THE FOLLOWING ISSUE: . , WHERE A COMPANY DEDUCTS TAX AT SOURCE (T DS ; FOR SHORT) FROM THE SALARY PAYABLE TO AN EMPLOYEE, BUT FAILS TO DEPOSIT THE SAID AMOUNT INTO THE GOVERNMENT TREASURY, WHETHER, THE REVENUE CAN RECOVER THE T DS AMOUNT WITH INTEREST FROM THE CONCERNED EMPLOYEE IN SPITE OF THE EXPRESS BAR CONTAINED IN SECTI ON 205 OF THE I T ACT 1961. ON THE ABOVE ISSUE, THE FINDING OF THE HONBLE BOMBAY HIGH COURT READS AS UNDER: ITA NO . 198/COCH/2015 6 IN THE RESULT, THE PETITION SUCCEEDS. AS THE RESPONDENT NO.6 HAD DEDUCTED THE TAX AT SOURCE FROM THE SALARY INCOME OF THE PETITIONER THE REVENUE COULD NOT HAVE RECOVERED THE SAID MOUNT WITH INTEREST FROM THE PETITIONER IN VIEW OF THE BAR CONTAINED IN SEC 205 OF THE ACT. ACCORDINGLY, THE REVENUE IS DIRECTED TO REFUND TO THE PETITIONER WITHIN 8 WEEKS FROM TODAY THE AMOUNT OF RS. 17,89,587/ - WITH INTE REST @ 6% FROM THE DATE OF RECOVER TILL THE DATE OF PAYMENT. THOUGH THE CREDIT OF TAX DEDUCTED AT SOURCE IS NOT AVAILABLE TO THE PETITIONER, SINCE THE SAID LIABILITY IS NOT RECOVERABLE FROM THE PETITIONER, THE REVENUE IS DIRECTED TO EARMARK THE SAID TDS LI ABILITY AS NOT RECOVERABLE FROM THE PETITIONER. 6 IN THE LIGHT OF THE CLEAR PROVISIONS OF SEC. 205 OF THE I T ACT, THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT AND IN THE INTEREST OF JUSTICE AND EQUITY, WE DEEM IT APPROPRIATE TO REMIT THE MATTER TO THE A SSESSING OFFICER TO VERIFY , THE TAX THAT HAS BEEN DEDUCTED AT SOURCE FROM THE SALARY PAYMENTS OF THE ASSESSEE AND GIVE DUE CREDIT FOR THE TAX THAT HAS BEEN DEDUCTED AT SOURCE BY THE EMPLOYER IRRESPECTIVE WHETHER THE EMPLOYER HAD PAID THE SAME INTO THE GOVERNMENT ACCOUNT OR NOT. IT IS ORDERED ACCORDINGLY. 7 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOV 2015 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 24 TH , NOV 2015 RAJ* ITA NO . 198/COCH/2015 7 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CI T , 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN
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