Deputy Commissioner of Income-tax, V. City Corporation Ltd., Pune

ITA 2088/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1652 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.2088/PN/2014 % % / ASSESSMENT YEAR : 2008-09 DCIT, TDS-1, PUNE . / APPELLANT V/S CITY CORPORATION LTD., 917/19A, F.C. ROAD, CITY CHAMBERS, PUNE 411004 PAN NO.PNECO5334A . / RESPONDENT / APPELLANT BY : SHRI ANIL CHAWARE / RESPONDENT BY : SHRI SUHAS P. BORA / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 18-08-2014 OF THE CIT(A)-V, PUNE RELATING TO ASSES SMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DEVELOPMENT OF TOWNSHIP NAMED AMANORA PARK NEAR HADAPSAR, PUNE. A SURVEY ACTION U/S.133A OF THE ACT WAS CARRIED OUT BY THE TDS OFFICERS ON 23-12-2008 FOR THE PU RPOSE OF VERIFICATION OF COMPLIANCE TO THE VARIOUS PROVISIONS OF TDS. I T WAS / DATE OF HEARING :04.07.2016 / DATE OF PRONOUNCEMENT:04.07.2016 2 ITA NO.2088/PN/2014 NOTICED THAT THE ASSESSEE HAS DEDUCTED TDS U/S.194C(C ONTRACT) INSTEAD OF SECTION 194I (RENT) IN RESPECT OF PAYMENTS MAD E TO SHUBHAM EARTH MOVERS TOWARDS SOIL EXCAVATION CHARGES A MOUNTING TO RS.73,68,490/-. THEREFORE, ACCORDING TO THE AO, THERE WAS SHORT DEDUCTION OF TAX AMOUNTING TO RS.16,89,644/-. HE ACCORDING LY PASSED ORDER U/S.201(1)/201(1A) OF THE I.T. ACT ON 30-03-2 011. SUBSEQUENTLY, HE INITIATED PENALTY PROCEEDINGS U/S.271C OF THE I.T. ACT AND ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED U/S.271C OF THE I.T. ACT. SINCE THERE WAS N O COMPLIANCE FROM THE SIDE OF THE ASSESSEE THE AO LEVIED PENALTY OF RS .16,89,644/- U/S.271C OF THE I.T. ACT. 3. BEFORE CIT(A) IT WAS SUBMITTED THAT THE DEMAND RAISED U/S.201(1)/201(1A) OF THE I.T. ACT IN RESPECT OF SOIL EXCAVATIO N CHARGES HAS BEEN DELETED AT THE LEVEL OF THE CIT(A) AND THEREFORE PENALTY U/S.271C OF THE ACT IS NOT LEVIABLE. 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND OBSERVING THAT THE CIT(A) HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE IN RESPECT OF DEMAND U/S.201(1)/201(1A) THE CIT(A) HELD THAT THERE IS NO CASE FOR LEVY OF PENALTY U/S.271C OF THE I.T. ACT. WHILE DOING SO, HE FURTHER NOTED THAT THE AMOUNT OF SHORT DEDUCTION OF RS.1 6,89,644/- PERTAINS TO TWO YEARS, I.E. A.Y. 2008-09 AND 2009-10 AMOUN TING TO RS.6,67,585/- AND RS.10,22,059/- RESPECTIVELY AS PER ORDER U/S.201(1)/201(1A) OF THE I.T. ACT ON 30-03-2011. HOWEVER, THE ADDITIONAL CIT (TDS), PUNE HAS LEVIED PENALTY FOR BOTH THE A MOUNTS IN A.Y. 2008-09 FOR WHICH THE SAME IS NOT CORRECT. IN ANY CASE SINCE THE CIT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE, THEREFOR E, THE PENALTY DOES NOT SURVIVE. 3 ITA NO.2088/PN/2014 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE PROVISIONS OF SECT ION 194I ARE NOT APPLICABLE IN RESPECT OF SOIL EXCAVATION CHARGES WITHO UT APPRECIATING THE FACT THAT AS PER THE AMENDED PROVISIONS OF SECTION 1941 W.E.F. 13-07- 2006, THE RENT IN RESPECT OF MACHINERY, PLANT OR EQU IPMENT ETC. WERE BROUGHT INTO THE AMBIT OF SECTION 194I. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OR ALL THE GROUNDS OF APPEAL OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE OR THEREAFTER. 3. THE ORDER OF THE LD.CIT(A) BEING ERRONEOUS BE SET -ASIDE AND AOS ORDER BE RESTORED ON THIS ISSUE. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.YRS. 2 008-09 AND 2009-10 VIDE ITA NOS. 593 & 594/PN/2014 ORDER DATED 1 2-08-2015 AND SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS H ELD THAT THE ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOURCE U/S.194C OF THE I.T. ACT SINCE THE PAYMENTS MADE FOR HIRING OF MACHINES ARE IN NAT URE OF WORKS CONTRACT AND NOT RENT AS DEFINED IN EXPLANATION T O SECTION 194I OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS BE EN UPHELD AND THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED. THERE FORE, THE PENALTY LEVIED U/S.271C OF THE ACT DOES NOT SURVIVE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED THAT THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DE CISION OF THE TRIBUNAL. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE AO LEVIED PENA LTY U/S.271C OF THE I.T. ACT ON THE GROUND THAT THE ASSESSEE HAS DED UCTED TAX U/S.194C OF THE I.T. ACT INSTEAD OF SECTION 194I IN R ESPECT OF PAYMENTS MADE TO SHUBHAM EARTH MOVERS AMOUNTING TO 4 ITA NO.2088/PN/2014 RS.73,68,490/- AND THEREFORE, THERE WAS SHORT DEDUCTION OF RS.16,89,644/-. WE FIND THE ORDER PASSED U/S.201(1)/201(1A) O F THE I.T. ACT WAS SET ASIDE BY THE CIT(A) AND ON FURTHER APPE AL THE TRIBUNAL VIDE ORDER DATED 12-08-2015 IN ITA NOS. 593 AND 594/PN /2014 FOR A.YRS. 2008-09 AND 2009-10 HAS DISMISSED THE APPEAL FILED B Y THE REVENUE HOLDING THAT THE ASSESSEE HAS RIGHTLY DEDUCTE D TAX U/S.194C ON ACCOUNT OF PAYMENTS MADE FOR HIRING OF MACHINERIES. SINC E THE VERY BASIS ON WHICH PENALTY HAS BEEN LEVIED U/S.271C OF T HE ACT DOES NOT SURVIVE, THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF TH E CIT(A) DELETING THE PENALTY LEVIED U/S.271C OF THE I.T. ACT. THE GROUNDS RAISED BY THE REVENUE ARE THEREFORE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HE ARING ITSELF, I.E. ON 04-07-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 04 TH JULY , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-V, PUNE 4. % S / THE CIT-V, PUNE 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , P // ( + //TRUE COPY // 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE