The Academy of Medical Sciences, Kannur V. ITO (TDS), Kannur

ITA 208/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69051 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 24-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Charitable institution; Non-deduction of tax
• Section: 40A(3); 12A; 201(1); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 206, 208 &209/COCH/2013 ASSESSMENT YEARS : 2007-08, 2008-09 & 2009-10 THE ACADEMY OF MEDICAL SCIENCES, PARIYARAM, KANNUR-670 503. [PAN: CHNAO 0649F] VS. THE INCOME TAX OFFICER (TDS), KANNUR. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) I.T.A. NOS. 207 & 210/COCH/2013 ASSESSMENT YEARS : 2008-09 & 2009-10 THE ACADEMY OF MEDICAL SCIENCES, PARIYARAM, KANNUR-670 503. [PAN: CHNAO 0649F] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KANNUR RANGE, KANNUR. (ASSESSEE- APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR & SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 24/09/2013 DATE OF PRONOUNCEMENT 22/11/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THESE FIVE APPEALS CHALLENG ING THE ORDERS PASSED BY LD CIT(A), OF WHICH THREE APPEALS( ITA 206, 208 & 209/ COCH/2013) RELATE TO THE DEMANDS RAISED U/S. 201& 201(IA) OF THE ACT TREATING THE AS SESSEE AS THE ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX AT SOURCE. THESE THREE APPEAL S RELATE TO THE FINANCIAL YEARS RELEVANT TO THE ASSESSMENT YEARS 2007-08, 2008-09 A ND 2009-10. THE OTHER TWO APPEALS, VIZ., ITA 207 & 210/COCH/2013, ARE AGAINST THE QUANTUM ASSESSMENTS RELATING I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 2 TO THE ASSESSMENT YEARS 2008-09 AND 2009-10. ALL T HESE APPEALS WERE HEARD TOGETHER AND HENCE THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. WE SHALL FIRST TAKE UP THE APPEALS FILED BY THE ASSESSEE CHALLENGING THE DEMAND RAISED U/S. 201 & 201(IA) OF THE ACT. 3. THE FACTS RELATING TO THE SAME, WHICH ARE COMMON IN ALL THE THREE YEARS, ARE STATED IN BRIEF. THE ASSESSEE-SOCIETY WAS STARTED TO RUN A MEDICAL COLLEGE AT A PLACE CALLED PARIYARAM. IT IS PERTINENT TO NOTE THAT TH E ASSESSEE- SOCIETY IS NOT REGISTERED U/S. 12A OF THE ACT. SINCE IT COULD NOT INVEST FUN DS FOR ESTABLISHMENT OF A FULL-FLEDGED HOSPITAL, ANOTHER BODY BY THE NAME KERALA STATE CO- OPERATIVE HOSPITAL COMPLEX AND ADVANCED MEDICAL SCIENCES LTD. (KCHC LTD.), A SOCIE TY REGISTERED UNDER THE KERALA STATE CO-OPERATIVE SOCIETY ACT ESTABLISHED FULL INFRASTRU CTURAL FACILITIES INCLUDING CLASS ROOMS, FURNITURES, LABORATORY EQUIPMENTS, MEDICAL EQUIPMEN TS ETC., ALONG WITH 500-BED SUPER SPECIALITY HOSPITAL. THESE FACILITIES WERE GIVEN T O THE ASSESSEE HEREIN AND ACCORDINGLY IT GOT AFFILIATION FROM THE MEDICAL COUNCIL OF INDIA F OR RUNNING THE MEDICAL COLLEGE. THE ASSESSEE TOOK POSSESSION OF CLASS ROOMS FOR RUNNING THE MEDICAL COLLEGE. HOWEVER, THE HOSPITAL INFRASTRUCTURE AND OTHER THE ALLIED SERVIC ES REMAINED WITH KCHC LTD., WHICH RUN THE HOSPITAL. BUT THE ASSESSEE WAS ALLOWED TO HAVE ACCESS TO THE ENTIRE FACILITIES, SO THAT IT COULD RUN THE MEDICAL COLLEGE AS PER THE NO RMS OF MEDICAL COUNCIL OF INDIA. IN THIS REGARD, BOTH KCHC LTD AND THE ASSESSEE ENTERED INTO A INDENTURE OF LEASE ON 01- 11-1995 FOR A PERIOD OF 99 YEARS WHEREBY ALL THE IN FRASTRUCTURAL FACILITIES INCLUDING CLASS ROOMS, HOSPITAL FACILITIES WERE MADE AVAILABLE TO T HE ASSESSEE BY KCHC LTD. THE LEASE RENT WAS FIXED AT RS. 2.00 CRORES FOR THE FIRST YEA R, I.E., FINANCIAL TEAR 1995-96, AT RS.3.00 CRORES FOR THE SECOND YEAR, AT RS.4.00 CROR ES FOR THE THIRD YEAR AND AT RS.5.00 CRORES FROM THE FIFTH YEAR ONWARDS. AN AMENDMENT W AS MADE TO THE LEASE DEED ON 01- 04-2006 WHEREBY THE LEASE RENT WAS INCREASED TO RS. 6.5 CRORES. 4. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS ACCOUNTED FOR THE LEASE RENT OF RS.6.50 CRORES IN ITS BOOKS OF ACCOUNT IN ALL TH E THREE YEARS AND THE SAME WAS SHOWN I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 3 AS LEASE RENT PAYABLE, I.E., THE ASSESSEE DID NOT A CTUALLY PAY THE LEASE RENT TO KCHC LTD AND HENCE IT WAS SHOWN AS PAYABLE IN THE BOOKS. T HE AO NOTICED THAT THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE FROM THE ABOVE SAID PA YMENT, AS REQUIRED U/S. 194I OF THE ACT. THE AO FURTHER NOTICED THAT KCHC HAS ALSO NO T FILED RETURNS OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER INITIATED PROCEE DINGS U/S. 201 OF THE ACT. 5. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBMI TTED THAT THE MEDICAL COLLEGE WAS RUNNING IN LOSS AND HENCE IT DID NOT HAVE ENOUG H MONEY TO PAY THE LEASE RENT. HENCE THE LEASE RENT WAS NOT PAID, APPARENTLY MEANI NG THAT IT DID NOT DEDUCT TAX AT SOURCE, SINCE THE PAYMENT OF LEASE RENT WAS NOT MAD E. HOWEVER, THE ASSESSING OFFICER NOTICED THAT THE PROVISIONS OF SEC. 194I MANDATES D EDUCTION OF TDS U/S. 194I OF THE ACT AT THE TIME OF CREDIT OF LEASE RENT TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT WHICHEVER IS EARLIER. SO, ACCORDINGLY, THE ASSESSI NG OFFICER HELD THAT THE ASSESSEE IS REQUIRED TO DEDUCT TAX AT SOURCE FROM THE LEASE REN T EVEN IF IT IS NOT PAID TO THE LESSOR. SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE, TH E ASSESSING OFFICER TREATED IT AS AN ASSESSEE IN DEFAULT AND RAISED DEMAND U/S. 201 OF T HE ACT IN ALL THE THREE YEARS. THE ASSESSING OFFICER ALSO LEVIED INTEREST U/S. 201 & 2 01(1A) OF THE ACT APPARENTLY, UP TO THE DATE OF PASSING OF THE IMPUGNED ORDER, I.E., UP TO 17-12-2009. 6. WE SHALL NOW DISCUSS ABOUT THE FACTS RELATING TO THE ADDITIONS MADE IN THE QUANTUM PROCEEDINGS RELATING TO THE ASSESSMENT YEAR S 2008-09 AND 2009-10. IN BOTH THESE YEARS, THE ASSESSING OFFICER HELD THAT THE IN COME OF THE ASSESSEE IS ASSESSABLE AS INCOME FROM BUSINESS, SINCE THE ASSESSEE IS NOT REG ISTERED AS CHARITABLE INSTITUTION U/S. 12A OF THE ACT AND FURTHER THE ASSESSEE IS SEEN COL LECTING FEES. ACCORDINGLY, THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESS EE UNDER THE HEAR INCOME FROM BUSINESS. WHILE COMPUTING THE INCOME FOR ASSESSMEN T YEAR 2008-09, THE ASSESSING OFFICER MADE DISALLOWANCES U/S. 40((A)(IA) FOR FAIL URE TO DEDUCT TAX AT SOURCE AND ALSO MADE DISALLOWANCE 40A(3) OF THE ACT. IN ASSESSMENT YEAR 2009-10, THE AO MADE DISALLOWANCE U/S 40(A)(IA) OF THE ACT, DISALLOWANCE OF SUNDRY DEBTORS WRITTEN OFF DISALLOWED AND DISALLOWANCE OF DIFFERENCE IN THE AC COUNT OF KCHC LTD. IN BOTH THE I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 4 YEARS, THE AO NOTICED THAT THE ASSESSEE DID NOT ACC OUNT FOR THE ACCRUED INTEREST ON THE BANK DEPOSITS. HENCE THE AO ASSESSED THE ACCRUED I NTEREST IN BOTH THE YEARS. 7. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) CONFIRMED THE ORDERS PASSED BY THE AO U/S 201 OF THE ACT AND ALSO CONFIRMED THE INTERE ST CHARGED U/S 201(1A) OF THE ACT. IN THE QUANTUM ASSESSMENTS, THE LD CIT(A) CONFIRMED THE DISALLOWANCES MADE U/S 40(A)(IA) OF THE ACT AND DIRECTED THE AO TO GIVE AP PROPRIATE RELIEF IN RESPECT OF OTHER ITEMS. AGGRIEVED BY THE ORDERS PASSED BY LD CIT(A), THE ASSESSEE HAS FILED THESE APPEALS BEFORE US, WHEREIN THE ISSUE RELATING TO TH E DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT IS BEING CONTESTED. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE PAYMENT OF RS.6.5 CRORES REPRESENTS CONSOLIDATED PAYMENT MADE IN RESPECT OF USE OF LAND AND BUILDING, FURNITURE AND FIXTURE AND MEDICAL EQUIPMENTS AND ALSO AS CONS IDERATION FOR PROVIDING INFRASTRUCTURAL FACILITIES WITHOUT GIVING POSSESSIO N OF THE HOSPITAL COMPLEX. HE SUBMITTED THAT THERE WAS AN ORAL AGREEMENT IN ARRIVING AT THE CONSIDERATION AS PER WHICH RS. 5.93 CRORES WAS TREATED AS CONSIDERATION FOR PROVIDING I NFRASTRUCTURAL FACILITIES WITHOUT GIVING POSSESSION OF THE HOSPITAL COMPLEX AND RS. 57.00 LA KHS PERTAINED TO THE RENT FOR BUILDING, FURNITURE AND FIXTURES AND MEDICAL EQUIPM ENTS. THE LD COUNSEL SUBMITTED THAT THE ASSESSEE DID NOT TAKE POSSESSION OF HOSPITAL CO MPLEX AND IN FACT THE FEE COLLECTED FROM THE PATIENTS WERE ACCOUNTED FOR BY KCHC. THE ASSESSEE PAID A SUM OF RS.5.93 CRORES TO KCHC TO ALLOWING ACCESS TO HOSPITAL COMPL EX AND THE SAME WOULD NOT FALL UNDER THE CATEGORY OF RENT AS DEFINED U/S 194I OF T HE ACT. ACCORDINGLY, HE SUBMITTED THAT THE PROVISIONS OF SEC. 194I SHALL APPLY ONLY T O RENT PORTION AND IT CANNOT BE EXTENDED TO THE CONSIDERATION PAID FOR PROVIDING IN FRASTRUCTURAL FACILITIES. 9. HE FURTHER SUBMITTED THAT KCHC LTD. HAS FILED THE RETURNS OF INCOME BELATEDLY SUBSEQUENT TO THE IMPUGNED PROCEEDINGS WITH THE VER Y SAME ASSESSING OFFICER. HOWEVER, THE SAID RETURNS WERE NOT ACTED UPON BY TH E ASSESSING OFFICER. HE SUBMITTED THAT KCHC LTD. HAS DECLARED THE IMPUGNED LEASE RENT PAYMENTS IN THE SAID RETURNS OF INCOME IN THE RESPECTIVE YEARS. HE SUBMITTED THAT , AS PER THE DECISION OF THE HONBLE I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 5 SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BE VERAGES (P) LTD. VS. CIT (293 ITR 226), THE ASSESSING OFFICER WAS NOT RIGHT IN RAISIN G THE DEMAND U/S. 201 OF THE ACT, ONCE THE RECIPIENT HAS DECLARED THE RECEIPT IN ITS RETURN OF INCOME AND PAID THE TAX THEREON. HE SUBMITTED THAT KCHC IS NOT LIABLE TO PA Y ANY TAX IN VIEW OF THE LOSS DECLARED IN THE RETURNS OF INCOME. 10. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS SUBMITTED AN APPLICATION SEEKING REGISTRATION U/S. 12A OF THE ACT BEFORE THE LD. CIT , CALICUT ON 31-03-2011. BOTH THE ASSESSEE AS WELL AS KCHC LTD. HAS SUBMITTED PETITIO NS BEFORE THE CENTRAL BOARD OF DIRECT TAXES SEEKING CBDT TO CONDONE THE DELAY - IN FILING THE APPLICATION FOR REGISTRATION U/S. 12A OF THE ACT BY THE ASSESSEE AN D ALSO IN FILING OF INCOME TAX RETURNS BY KCHC LTD. ACCORDINGLY, HE PRAYED THAT THE IMPUG NED APPEALS MAY BE KEPT PENDING TILL THE DISPOSAL OF APPLICATIONS BY THE CBDT. 11. THE LD COUNSEL ALSO SUBMITTED THE FOLLOWING ARGUMENTS:- 1. FINANCE ACT 2012 HAS INSERTED THE FOLLOWING I N SEC. 201(1) OF THE IT ACT, 1961. PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RES IDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT: - (I) HAS FURNISHED HIS RETURN OF INCOME U/S. 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICA TE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED . 2. THE APPELLANTS CASE, THE PAYEE IS M/S. KERALA STATE HOSPITAL COMPLEX AND ADVANCED MEDICAL SERVICES LTD. THE PAYEE IS ASSESS ED TO INCOME TAX IN PAN: AAJK 0393C. THE PAYEE HAS FILED THE RETURN OF INCO ME FOR PREVIOUS YEARS RELEVANT FOR ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10. THESE RETURNS ARE FILED BEFORE THE SAME ASSESSING OFFICER BEFORE WHOM THE APPELLANT IS ALSO I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 6 ASSESSED TO TAX. THE PAYEE HAS INCLUDED THE PAYMEN TS CONSIDERED IN THE IMPUGNED ORDERS IN ITS ACCOUNTS FOR THE RELEVANT FI NANCIAL YEARS, WHICH ARE CONSIDERED AS LIABLE TO DEDUCT INCOME TAX AT SOURCE IN THE HANDS OF THE PAYEE, I.E., THE APPELLANT HEREIN. BASED ON THE AMENDMENT EFFECTED IN SECTION 201, THE APPELLANT SUBMITS THAT SINCE THE PAYEE IS ASSESSED TO TAX AND HAS INCLUDED THE PAYMENTS AS PART OF ITS RECEIPTS AND INCOME, THE AP PELLANTS CASE WILL SQUARELY FALL WITHIN THE PURVIEW OF THIS AMENDED PROVISO TO SEC. 201 AND THEREFORE, THE ASSESSEE CANNOT BE TREATED TO BE A DEFAULTER SO AS TO INVOKE THE PROVISIONS OF SEC. 40(IA). CERTIFICATE FROM ACCOUNTANT IN PRESCR IBED FORMAT IS ENCLOSED. 3. THE ABOVE AMENDMENT CAME INTO EFFECT WITH EFFECT FROM THE ASSESSMENT YEAR 2013-14. HOWEVER, THIS AMENDMENT WAS INSERTED AS A MEASURE TO MITIGATE THE HARDSHIP CAUSED TO ASSESSEE IN SIMILAR CASES. THE CALCUTTA HIGH COURT, IN THE CASE OF COMMISSIONER OF INCOME TAX VS. VIRGIN CREAT IONS IN I.T.A. NO. 302 OF 2011 HAS HELD THAT SIMILAR AMENDMENTS IN SECTION 40 (I)(A) WHICH WAS MADE TO MITIGATE THE RIGORS OF SECTION 40A(IA) ARE RETROSPE CTIVE IN NATURE. A COPY OF THE SAID DECISION IS ALSO ENCLOSED. 4. IT IS THEREFORE SUBMITTED THAT THIS AMENDMENT MA Y BE CONSIDERED AS APPLICABLE TO THE APPLICANTS CASE IN RESPECT OF TH ESE ASSESSMENT YEARS. 12. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEES REQUEST TO KEEP THE APPEALS IN ABEYANCE ONLY POINT TO THE FACT THAT THE ASSESSEE IS ACCEPTING THE ADDITIONS MADE BY THE AO. SHE FURTHER SUBMITTED THAT THE CLA SSIFICATION OF LEASE RENT PAYMENT OF RS.6.50 CRORES INTO TWO CATEGORIES IS NOT SUPPORTED BY ANY DOCUMENT AND IN ANY CASE, THE PAYMENT MADE FOR USE OF HOSPITAL FACILITIES WIT HOUT TAKING POSSESSION WILL ALSO FALL IN THE CATEGORY OF RENT ONLY. SHE FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED APPLICATION SEEKING REGISTRATION U/S 12A OF THE ACT ONLY SUBSEQ UENT TO THE PASSING OF IMPUGNED ORDERS AND HENCE IT WILL NOT HAVE ANY EFFECT ON THE PRESENT APPEALS. WITH REGARD TO THE CLAIM OF FILING OF RETURNS OF INCOME BY KCHC, THE L D D.R SUBMITTED THAT THE SAME HAS BEEN BELATEDLY AND HENCE THEY CANNOT BE CONSIDERED AS RETURNS OF INCOME FILED U/S 139 OF THE ACT. ACCORDINGLY SHE SUBMITTED THAT THE AME NDMENTS BROUGHT OUT BY FINANCE ACT 2012 IN SEC. 201 AS WELL AS IN SEC. 40(A)(IA) SHALL NOT APPLY TO THE ASSESSEE. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE IS LIABLE TO PAY A LEASE R ENT OF RS.6.50 LAKHS IN EACH OF THE THREE YEARS UNDER CONSIDERATION TO KCHC. THOUGH AS SESSEE IS SPLITTING UP THE SAID I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 7 PAYMENT IN TWO MAIN CATEGORIES VIZ., PAYMENT FOR US E OF ASSETS BY TAKING POSSESSION OF THE SAME AND THE PAYMENT TOWARDS USE OF HOSPITAL FA CILITIES, IN OUR VIEW, ALSO SUCH A SPLIT UP MAY NOT COME TO THE HELP OF THE ASSESSEE. ULTIMATELY THE LIABILITY TO MAKE PAYMENT ARISES ONLY ON ACCOUNT OF USE OF ASSETS BEL ONGING TO SOME OTHER PERSON AND HENCE, IN OUR VIEW, THE ENTIRE AMOUNT OF RS.6.50 CR ORES WILL FALL UNDER THE CATEGORY OF RENT ONLY. FURTHER, THE PROVISIONS OF SEC. 94I ARE VERY CLEAR THAT THE TDS LIABILITY IS NOT DEPENDENT UPON ACTUAL PAYMENT OF RENT. HENCE THE P ROVISIONS OF SEC. 194I SHALL GET ATTRACTED AS SOON AS THE ASSESSEE ACCOUNTED FOR THE LEASE RENT LIABILITY IN ITS BOOKS OF ACCOUNT. 14. IT IS AN ADMITTED FACT THAT THE ASSESSEE DO ES NOT HAVE REGISTRATION U/S 12A OF THE ACT. SIMILARLY, THE KCHC HAS FILED RETURNS OF INCO ME ONLY BELATEDLY BY INCLUDING THE LEASE RENT AND SINCE IT WAS FILED BELATEDLY, THE AO APPEARS TO HAVE NOT TAKEN ANY ACTION OVER IT. THOUGH IT IS STATED THAT BOTH THE ASSESSE E AS WELL AS KCHC HAVE FILED PETITIONS WITH CBDT SEEKING CONDONATION OF DELAY, YET, IN OUR VIEW, THERE IS NO NECESSITY FOR US TO WAIT FOR THE OUTCOME OF THE PETITIONS, REFERRED ABO VE. HENCE, WE ARE UNABLE TO ACCEPT TO THE REQUEST MADE BY ASSESSEE IN THIS REGARD. 15. SINCE THE RECIPIENT OF LEASE RENT, VIZ., KC HC FILED RETURN OF INCOME BELATEDLY, THEY CANNOT BE CONSIDERED AS RETURNS FILED U/S 139 OF TH E ACT AND FURTHER IT ALSO STATED THAT THE DEPARTMENT HAS NOT TAKEN ANY ACTION ON THOSE RE TURNS. ACCORDINGLY, IN OUR VIEW, THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES LTD (SUPRA) SHALL NOT APPLY TO THE FACTS OF THE INSTANT CASE. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE PROVISO INSERTED BY FIN ANCE ACT, 2012 IN SEC. 201 OF THE ACT TO CONTEND THAT THE ASSESSEE SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT, SINCE THE RECIPIENT, M/S KCHC HAS DECLARED THE LEASE RENTAL I N ITS RETURN OF INCOME. FOR IDENTICAL REASONS, IN OUR VIEW, THE ASSESSEE CANNOT BE SAID T O HAVE SATISFIED THE CONDITIONS PRESCRIBED IN THE PROVISO TO SEC. 201 OF THE ACT IN SERTED BY THE FINANCE ACT, 2012, WHICH IS EXTRACTED IN THE WRITTEN SUBMISSIONS MADE BY LD A.R. I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 8 15. IN VIEW OF THE FOREGOING DISCUSSIONS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION RENDERED BY LD CIT(A) WITH REGARD TO T HE DEMAND RAISED U/S 201 OF THE ACT AND THE INTEREST CHARGED U/S 201(1A) OF THE ACT IN ALL THE THREE APPEALS UNDER CONSIDERATION. 16. IN THE QUANTUM APPEALS FILED FOR THE ASSESSM ENT YEAR 2008-09 AND 2009-10, THE ASSESSEE IS CONTESTING THE ADDITIONS MADE U/S 40(A) (IA) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOURCE ON CERTAIN PAYMENTS. HOWEVER, THE AS SESSEE DID NOT DEMONSTRATE BEFORE US AS TO HOW THE SAID PROVISION IS NOT APPLICABLE T O IT. THE ASSESSEE SIMPLY PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE CALCUT TA HIGH COURT IN THE CASE OF VIRGIN CREATIONS (SUPRA), WHEREIN IT WAS HELD THAT THE AME NDMENT BROUGHT OUT BY FINANCE ACT 2010 IN SEC. 40(A)(IA) WAS RETROSPECTIVE IN NATURE. WE NOTICE THAT THE SAID DECISION WAS RENDERED IN THE CONTEXT OF AMENDMENT BROUGHT OUT BY FINANCE ACT 2010 IN SEC. 40(A)(IA) OF THE ACT BY MAKING CERTAIN MODIFICATION S IN THE SECTION. THE FACTS PREVAILING IN THE INSTANT CASE IS TOTALLY DIFFERENT, WHICH HAS BEEN DISCUSSED IN THE PRECEDING PARAGRAPHS. FOR EXAMPLE, THE DEPARTMENT IS DISPUTI NG ABOUT THE VALIDITY OF RETURNS FILED BY KCHC. HENCE, IN OUR VIEW, THE ASSESSEE CANNOT T AKE SUPPORT OF THE RATIO OF THE SAID DECISION IN THE FACTS AND CIRCUMSTANCES OF THE INST ANT CASE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF LD CIT (A) ON THIS ISSUE ALSO IN BOTH THE YEARS. 17. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED ACCORDINGL Y ON 22-11-2013 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 22ND NOVEMBER, 2013 GJ I.T.A. NOS. 206, 208 & 209 & 207&210/COCH/2013 9 COPY TO: 1. THE ACADEMY OF MEDICAL SCIENCES, PARIYARAM, KANN UR-670 503. 2. THE INCOME TAX OFFICER (TDS), KANNUR. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KANNUR RANGE, KANNUR. 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, KOCH I. 4.THE COMMISSIONER OF INCOME-TAX, KANNUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN