The Income-tax Officer, Jammu V. The Secretary, Rajouri.

ITA 212/ASR/2015

• Counselvise Citation: 21220914 RSA 2015
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: P N ARORA
• Section: 206AA; 194C; 201(1); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO S. 212 , 268 & 269 (ASR)/2015 ASSESSMENT YEAR S : 2011 - 12 , 2012 - 13 & 2013 - 14 THE ITO, TDS CIRCLE, AAYAKAR BHAWAN, RAIL HEAD COMPLEX, JAMMU. VS. THE SECRETARY ARMY GODWILL PUBLIC SCHOOL, RAJOURI. PAN: PT LA14420A (APPELLANT) (RESPONDENT) AP PELLANT BY: SH. R.K.SHARDA ( DR. ) RESPONDENT BY: SH. P.N.ARORA (ADV. ) DATE OF HEARING: 01.12 .2015 DATE OF PRONOUNCEMENT: 04 . 12 .2015 ORDER PER T.S.KAPOOR (A.M): THESE APPEAL S HAVE BEEN FILED BY THE REVENUE AGAINST THE SEPARATE ORDER OF LEARNED CIT(A) DATED 19.02.2015, 9.3.2015 AND 9.3.2015 RESPECTIVELY , FOR THE ASST. YEAR.2011 - 12, 2012 - 13 AND 2013 - 14 . SIMILAR GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN THESE APPEALS. FOR THE SAKE OF CONVENIENCE THE GROUNDS OF APPEAL FOR ASST. YEAR 2013 - 14 ARE REPRODUCED BELOW. (I) THAT THE LEARNED CIT(A), JAMMU HAS ERRED IN LAW AND FACTS IN HOLDING THAT THE DEMAND RAISE D U/S 201(1) AND INTEREST U/S 201(1A) OF THE INCOME TAX ACT, 1961 BY APPLYING THE TAX RATE @ 20% BY THE ASSESSING OFFICER, SHOULD BE CHARGED @ 1% ON PAYMENT MADE TO INDIVIDUALS AND @ 2% ON THE PAYMENT MADE TO OTHER PERSONS AS ALL THE PANS WERE ALLOTTED WEL L BEFORE THE PERIOD UNDER CONSIDERATION. 2 . ITA NO S.212, 268 & 269 (ASR)/20 1 5 ASST. YEAR 2011 - 12, 2012 - 13 &2013 - 14 WHEREAS AS PER PROVISION OF SECTION 206AA OF THE INCOME TAX ACT,1961 W.E.F. 01.04.2010, THE DEDUCTOR HAS TO OBTAIN PAN OF THE DEDUCTEE AT THE TIME OF MAKING PAYMENT FAILING WHICH TAX HAS TO BE DEDUCTED BY THE DEDUCT OR @20%. (II) THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETED OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THESE APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 3 . AT THE TIMER OF HEARING, IT WAS OBSERVED THAT REVENUE HAD FILED AN APPLICATION FOR ADJOURNMENT, HOWEVER, GORING THROUGH THE FACTS AND MATERIAL ON RECORD, WE WERE OF THE OPINION THAT THE MATTER COULD BE DISPOSED OFF , T HEREFORE, THE LEARNED DR WAS DIRECTED TO TAKE ONE COPY OF FILES FOR ARGUMENTS AND THEREFORE, ADJOURNMENT APPLICATION WAS REJECTED AND APPEALS WERE HEARD. 4 . AT THE OUTSET, THE LEARNED D R SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO DEDUCT THE TDS AT THE RATE OF 20% BECAUSE THE PAYEES TO WHOM PAYMENTS WERE MADE, WERE NOT HAVING PAN NO S . AND THEREFORE, HE SUBMITTED THAT THE ORDERS PASSED BY THE LEARNED CIT(A) ARE NOT AS PER LAW. 5 . THE LEARNED AR, ON THE OTHER HAND PLACED HIS RELIANCE ON THE ORDER OF LEAR NED CIT(A) AND SUBMITTED THAT THE PAN NO. O F PAYEES WERE ALREADY AVAILABLE ON RECORD AND SINCE THE ASSESSEE WAS NOT AWARE OF THE INSPECTION AND THEREFORE, AT THE TIME OF INSPECTION COULD NOT PRODUCE THE DETAILS OF SUCH PAN NO. HE SUBMITTED THAT THE LEARNED CIT(A) HAS VERIFIED FROM THE SYSTEM OF ITO (TDS) REGARDING EXISTENCE OF PAN NO. OF PAYEES ALONGWITH THE DATE S OF ISSUE OF 3 . ITA NO S.212, 268 & 269 (ASR)/20 1 5 ASST. YEAR 2011 - 12, 2012 - 13 &2013 - 14 PAN NO. WHICH WERE BEFORE THE DATE OF INSPECTION AND THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY DELETED THE DEMAND. 6 . WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSING OFFICER, TDS CIRCLE, JAMMU CARRIED AN INSPECTION ON 21.1.2013 IN THE CASE OF THE ASSESSEE AND FOUND THAT IN VARIOUS YEARS THE ASSESSEE HAD PAID CERTAIN AMOUNTS FOR EXECUTION OF WORKS. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE @ 1% WHEREAS THE ASSESSEE WAS R EQUIRED TO DEDUCT THE TAX @ 20% I N VIEW OF THE FACT THAT AT THE TIME OF PAYMENT THE ASSESSEE HAD NOT OBT AINED PAN NO. OF PAYEES . THE LEARNED CIT(A) HAS RECORDED A FINDING OF FACT THAT PAN NOS. WERE AVAILABLE WITH THE ASSESSEE AND THESE WERE OBTAINED BEFORE THE DATE OF INSPECTION, WHICH AT THE TIME OF INSPECTION DUE TO CERTAIN MISCOMMUNICATION BETWEEN MANAGEMENT AND PRINCIPAL COULD NOT BE PRODUCED. THE LEARNED CIT(A) HAS FURTHER MADE A FINDING OF FACT THAT THE EXISTENCE OF PAN NO. OF PAYEES WERE VE RIFIED FROM THE SYSTEM OF ITO ( TDS ) AND WERE FOUND TO BE CORRECT. THE PAN NO. AND THEIR DATE OF ISSUE AS RECORDED IN THE APPELLATE ORDER REVEALS THE FOLLOWING DETAILS AS RECORDED IN APPELLATE ORDER OF ASST. YEAR 2011 - 12. NAME PAN DATE OF ISSUE GUPTA TOUR & TRAVELS (PROP. RIPU DAMAN GUPTA) AMMPG6220C 15/10/2007 AMARDEEP SINGH CSZPS0487E 18/05/2010 RAKESH WOOL CENTRE (PROP. RAKESH GUPTA) AAVPG9612K 30/11/1998 MANOHAR SINGH CONTRACTOR (FIRM) AAHFM6720G 23/10/2002 S.V. TOUR & TRAVE LS (PROP. SUKESH GUPTA) AJEPG9052H 21/11/2005 4 . ITA NO S.212, 268 & 269 (ASR)/20 1 5 ASST. YEAR 2011 - 12, 2012 - 13 &2013 - 14 IN ALL THESE YEARS THE PAYEES REMAINED THE SAME. THE FINDINGS OF LEARNED CIT(A) AS RECORDED IN ASS T. YEAR 2011 - 12 VIDE PARA 4.3 ARE REPRODUCED BELOW. 4.3 THE APPELLANT FURTHER SUBMITTED THAT OUT OF THE FIVE PERSONS; M/S MANOHAR SINGH CONTRACTOR WAS A PARTNERSHIP FIRM AND THE OTHER FOUR WERE INDIVIDUALS. THE APPELLANT SUBMITTED THAT IN CASE OF INDIVIDUALS THE RATE OF TDS U/S 194C WAS 1% AND IN CASE OF O THERS IT WAS 2%; WHEREAS THE AO CHARGED TAX @ 20% ON PAYMENTS MADE TO ALL THE PERSONS. THE AO HELD THAT APPELLANT DID NOT OBTAIN PANS OF PAYEES AND THEREFORE APPLIED THE PROVISIONS OF SECTION 206AA AND CHARGED TAX @ 20%. WHEREAS, THE APPELLANT ARGUED THAT PANS OF ALL THE PERSONS WERE AVAILABLE WITH THE APPELLANT AT THE TIME THE INSPECTION CONDUCTED. THE APPELLANT PRODUCED A COPY OF STATEMENT OF SCHOOL PRINCIPAL RECORDED BY THE AO AT THE TIME OF INSPECTION IN WHICH THE PRINCIPAL ADMITTED THAT PANS OF M/S GU PTA TOUR & TRAVE LS, M/S S.V. TOUR & TRAVELS, M/S S.V TOUR & TRAVELS AND SH. AMARDEEP SINGH WERE AVAILABLE WITH THEM. THE APPELLANT FURTHER ARGUED THAT THE SCHOOL IS RUN BY ARMY AND ALL THE MAJOR DECISIONS ARE TAKEN BY THEM ONLY. THE PRINCIPAL WAS ONLY INVO LVED IN RUNNING OF SCHOOL; HE DID NOT HAVE ANY SAY IN FINANCIAL MATTERS. THE APPELLANT ALSO SUBMITTED THAT THE PANS OF OTHER PERSONS WERE ALSO AVAILABLE WITH THEM AND WERE LYING WITH ARMY PERSONS, BUT THEY WERE NOT AWARE OF THE INSPECTION AND THEREFORE COU LD NOT PRODUCE THE DETAILS BEFORE THE AO. THE APPELLANT ALSO SUBMITTED DATE OF PANS OF PAYEES SHOWING THEIR DATE OF ISSUE WHICH CLEARLY SHOW THAT ALL PANS WERE ALLOTTED WELL BEFORE THE PERIOD UNDER CONSIDERATION EXCEPT THE PAN OF SH. AMARDEEP SINGH WHICH W AS ALLOTTED ON 18/05/2010. THIS WAS VERIFIED FROM THE SYSTEM OF ITO (TDS) AND FOUND CORRECT. THIS SHOWS THAT THE APPELLANT DID NOT INSTIGATE THE PAYEES TO GET PANS SO AS TO AVOID HIGHER RATE OF TAX. IT APPEARS THAT THERE WAS SOME MISCOMMUNICATION BETWEEN T HE SCHOOL PRINCIPAL AND THE ARMY AUTHORITIES. THE APPELLANT ALSO ARGUED THAT SECTION 206AA MANDATES THAT THE PAYEE SHALL FURNISH HIS PAN TO THE DEDUCTOR BUT THE AO OBSERVED THAT THE APPELLANT DID NOT OBTAIN THE PANS OF THE PAYEES. FROM THE ABOVE DISCUSSI ON IT APPEARS THAT THERE WAS NO MALAFIDE INTENTION ON PART OF THE APPELLANT. I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLANT AND 5 . ITA NO S.212, 268 & 269 (ASR)/20 1 5 ASST. YEAR 2011 - 12, 2012 - 13 &2013 - 14 COME TO A CONCLUSION THAT TAX SHOULD BE CHARGED @1% ON PAYMENTS MADE TO INDIVIDUALS & @ 2% ON PAYMENTS MADE TO THE OTHER P ERSONS EXCEPT ON ONE PAYMENT OF RS.1,97,475/ - MADE TO SH. AMARDEEP SINGH BEFORE ISSUE OF HIS PAN; AND THE EXCESS TAX AND INTEREST ALREADY CHARGED BE REVERSED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LE ARNED CIT(A), THEREFORE, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 7 . IN THE RESULT, THE APPEAL S FILED BY THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPE N COURT ON 4 TH DECEMBER , 2015. SD/ - SD/ - (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04 . 12 . 2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1 . THE ASSESSEE: 2 . THE 3 . THE CIT(A) 4 . THE CIT 5 . THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.