Director General Health, Dehradun V. ACIT (TDS), Dehradun

ITA 2133/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7313 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-09-2014
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2013
• Result in Favour of: Set Aside
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: RAJIV NANDA
• Keywords: Opportunity of being heard
• Section: 2; 194C; 12AA; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .2132/DEL/2013, 2133/DEL/2013 & 5123/DEL/2013 2132/DEL/2013, 2133/DEL/2013 & 5123/DEL/2013 2132/DEL/2013, 2133/DEL/2013 & 5123/DEL/2013 2132/DEL/2013, 2133/DEL/2013 & 5123/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2010 2010 2010 2010- -- -11, 2011 11, 2011 11, 2011 11, 2011- -- -12 & 2012 12 & 2012 12 & 2012 12 & 2012- -- -13 1313 13 DIRECTO DIRECTO DIRECTO DIRECTOR GENERAL HEALTH, R GENERAL HEALTH, R GENERAL HEALTH, R GENERAL HEALTH, NEAR I.T. PARK, NEAR I.T. PARK, NEAR I.T. PARK, NEAR I.T. PARK, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. TAN : MRTD00478C. TAN : MRTD00478C. TAN : MRTD00478C. TAN : MRTD00478C. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), 13 1313 13- -- -A, SUBHASH ROAD, A, SUBHASH ROAD, A, SUBHASH ROAD, A, SUBHASH ROAD, DEHRADUN DEHRADUN DEHRADUN DEHRADUN 248 001. 248 001. 248 001. 248 001. (APPELLANT) (RESPONDENT) ITA NO.2061/DEL/2013 ITA NO.2061/DEL/2013 ITA NO.2061/DEL/2013 ITA NO.2061/DEL/2013 ASSESSMENT YEAR : 201 ASSESSMENT YEAR : 201 ASSESSMENT YEAR : 201 ASSESSMENT YEAR : 2011 11 1- -- -12 1212 12 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), INCOME TAX (TDS), DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. VS. VS. VS. VS. THE DIRECTOR GENERAL HEALTH, THE DIRECTOR GENERAL HEALTH, THE DIRECTOR GENERAL HEALTH, THE DIRECTOR GENERAL HEALTH, NEAR I.T. PARK, NEAR I.T. PARK, NEAR I.T. PARK, NEAR I.T. PARK, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, SHASHTRADHARA ROAD, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. TAN : MRTD00478C. TAN : MRTD00478C. TAN : MRTD00478C. TAN : MRTD00478C. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV NANDA, ADVOCATE. REVENUE BY : SMT. PARWINDER KAUR, SR.DR. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : ITA NOS.2133/DEL/2013 AND 2061/DEL/2013 ITA NOS.2133/DEL/2013 AND 2061/DEL/2013 ITA NOS.2133/DEL/2013 AND 2061/DEL/2013 ITA NOS.2133/DEL/2013 AND 2061/DEL/2013 AY 2011 AY 2011 AY 2011 AY 2011- -- -12 : 12 : 12 : 12 :- -- - THESE APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-I, DEHRADUN DAT ED 15 TH OCTOBER, 2012 FOR THE AY 2011-12. 2. THE FACTS OF THE CASE FOR THE YEAR UNDER APPEAL ARE THAT THE ASSESSING OFFICER TREATED THE ASSESSEE TO BE IN DEF AULT FOR NON- DEDUCTION OF TAX UNDER SECTION 194C AMOUNTING TO `5 9,88,320/- AND ITA-2132/DEL/2013 & 3 OTHERS 2 UNDER SECTION 194J AT `30,00,000/-. HE ALSO CHARGE D INTEREST UNDER SECTION 201(1A) AMOUNTING TO `33,71,672/-. THE ASS ESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) WHO DID NOT AGREE WITH TH E ASSESSEES CONTENTION THAT IT WAS NOT LIABLE TO DEDUCT TAX AT SOURCE BUT HE AGREED WITH THE ALTERNATIVE CONTENTION OF THE ASSESSEE THA T THE PAYEES WHO ARE INCOME TAX ASSESSEES, IF ALREADY PAID TAX DUE O N THEIR INCOME, THEN THE ASSESSEE SHOULD NOT BE TREATED TO BE IN DEFAULT UNDER SECTION 201(1) FOR THE SHORT DEDUCTION OF TAX. WHILE DOING SO, LEARNED CIT(A) RELIED UPON THE DECISION OF HONBLE APEX COURT IN T HE CASE OF HINDUSTAN COCA COLA BEVERAGE P.LTD. VS. CIT [2007] 293 ITR 226. HOWEVER, HE UPHELD THE LEVY OF INTEREST IN PRINCIPLE. ACCORDIN GLY, HE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR VER IFICATION OF THE CORRECTNESS OF THE ASSESSEES CLAIM THAT ALL THE PA YEES HAVE ALREADY PAID THE TAX DUE ON THEIR INCOME FOR THE YEAR UNDER CONSIDERATION. THE REVENUE, AGGRIEVED WITH THE ORDER OF LEARNED CIT(A) , IS IN APPEAL BEFORE US AND HAS RAISED ONLY ONE GROUND WHICH READ S AS UNDER:- THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECT ING THE ASSESSEE TO FURNISH THE DOCUMENTARY EVIDENCE FOR RS.89,88,320/- BEFORE THE A.O. AND ALSO DIRECTING T HE AO TO SATISFY HERSELF ABOUT THE CORRECTNESS OF THE SAME I N THE LIGHT OF THE DECISION OF THE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT.LTD. VS. CIT (2007 ) 293 ITR 226 (SC) WITHOUT APPRECIATING THE FACTS THAT TH E SAME IS TANTAMOUNT TO SET ASIDE OF THE CASE. 3. IN THE ASSESSEES APPEAL, SEVERAL GROUNDS RUNNIN G INTO SIX PAGES HAVE BEEN RAISED BUT AT THE TIME OF HEARING BEFORE US, IT IS CONTENDED BY THE LEARNED COUNSEL THAT THE MAIN GROUND IN THE ASSESSEES APPEAL IS THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED RELEVANT MATERIAL PLACED BEFORE US. IT WAS CONTEND ED BY THE LEARNED COUNSEL THAT THE ASSESSEE IS THE DIRECTOR GENERAL H EALTH, GOVERNMENT ITA-2132/DEL/2013 & 3 OTHERS 3 OF UTTARAKHAND. THAT THE GOVERNMENT OF UTTARAKHAND ALLOTS FUNDS TO THE MINISTRY OF HEALTH TOWARDS THE CONSTRUCTION OF HOSPITALS ETC. THE ASSESSEE BEING THE DIRECTOR GENERAL, MINISTRY OF HE ALTH ASSIGNED THIS BUDGET TO THE VARIOUS GOVERNMENT UNDERTAKINGS LIKE U.P. RAJKIYA NIRMAN NIGAM, U.P. SAMAJ KALYAN NIRMAN NIGAM ETC. THAT THEREAFTER, THOSE GOVERNMENT UNDERTAKINGS CALL FOR THE TENDERS FROM THE CONTRACTOR AND THEN ENTER INTO A CONTRACT WITH THE CONTRACTOR FOR CONSTRUCTION OF HOSPITAL BUILDINGS OR OTHER BUILDIN GS. THAT THERE IS NO CONSTRUCTION CONTRACT BETWEEN ASSESSEE AND U.P. RAJ KIYA NIRMAN NIGAM AND U.P. SAMAJ KALYAN NIRMAN NIGAM AND OTHERS . THEREFORE, SECTION 194C IS NOT APPLICABLE IN THE CASE OF THE A SSESSEE. THAT THERE IS A CONTRACT BETWEEN THOSE GOVERNMENT UNDERTAKINGS AND THE CONTRACTOR AND THE GOVERNMENT UNDERTAKINGS WHO ALLO TTED THE CONTRACT TO THE CONTRACTOR HAS DULY DEDUCTED THE TAX UNDER S ECTION 194C ON THE PAYMENTS MADE TO THE CONTRACTOR. HE, THEREFORE, SU BMITTED THAT SECTION 194C IS NOT AT ALL APPLICABLE IN RESPECT OF THE ASSIGNMENT OF BUDGED BY THE ASSESSEE TO VARIOUS STATE GOVERNMENT UNDERTAKINGS. WITH REGARD TO APPLICABILITY OF SECTION 194J IN RES PECT OF PAYMENT TO EMERGENCY MANAGEMENT AND RESEARCH INSTITUTE (EMRI) IS CONCERNED, IT IS CONTENDED BY THE LEARNED COUNSEL THAT EMRI IS A NON-PROFIT MAKING ORGANIZATION WHICH IS A REGISTERED SOCIETY AND ALSO REGISTERED UNDER SECTION 12AA OF THE ACT. EMRI IS PROVIDING EMERGEN CY MEDICAL SERVICES IN THE ENTIRE STATE OF UTTARAKHAND. THAT PAYMENT TO EMRI IS ONLY REIMBURSEMENT OF THE EXPENSES INCURRED BY THEM AND SECTION 194J IS NOT APPLICABLE IN RESPECT OF SUCH REIMBURSE MENT OF EXPENSES. 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE ASSESSING OFFICER AND SHE ALTERNATIVELY SUGGESTED T HAT THE ASSESSEES CONTENTION WOULD REQUIRE VERIFICATION AT THE END OF THE ASSESSING OFFICER. ITA-2132/DEL/2013 & 3 OTHERS 4 6. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES, WE AGREE WITH THE SUGGESTION OF THE LEAR NED DR THAT THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. THE ASSESSEE CONTENDED THAT THERE IS NO CONTRACT FOR CONSTRUCTION WORK BETWEEN DIRECT OR GENERAL HEALTH AND U.P. RAJKIYA NIRMAN NIGAM, U.P. SAMAJ KALYAN NI RMAN NIGAM. THE DIRECTOR GENERAL HEALTH HAD ONLY ASSIGNED THE BUDGE T ALLOCATION TO VARIOUS GOVERNMENT UNDERTAKINGS. THIS CONTENTION O F THE ASSESSEE WOULD REQUIRE VERIFICATION AT THE END OF THE ASSESS ING OFFICER. SIMILARLY, THE CLAIM OF THE ASSESSEE THAT THE PAYME NT TO EMRI IS ONLY REIMBURSEMENT OF THE EXPENSES ALSO REQUIRES VERIFIC ATION AT THE END OF THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE TH E ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FIL E OF THE ASSESSING OFFICER. WE DIRECT THE ASSESSEE TO PRODUCE ALL THE EVIDENCES IN SUPPORT OF ITS CONTENTION BEFORE THE ASSESSING OFFICER AND THEREAFTER, THE ASSESSING OFFICER IS DIRECTED TO READJUDICATE THE I SSUE IN ACCORDANCE WITH LAW. IN CASE WHERE THE ASSESSING OFFICER ARRI VES AT THE CONCLUSION THAT THE ASSESSEE WAS LIABLE TO DEDUCT THE TAX UNDE R SECTION 194C OR 194J, AS THE CASE MAY BE, THEN, HE WILL FURTHER EXA MINE THE FACTS IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT.LTD. (SUPRA) SO AS TO ARRIVE AT THE FURTHER CONCLUSION THAT WHETHER IN THE LIGHT OF ABOVE DECIS ION, ASSESSEE CAN BE TREATED IN DEFAULT OR NOT. NEEDLESS TO MENTION THA T ASSESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE AS WELL AS OF THE REVENUE BOTH ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.2132/DEL/2013 & 5123/DEL/2013 ITA NOS.2132/DEL/2013 & 5123/DEL/2013 ITA NOS.2132/DEL/2013 & 5123/DEL/2013 ITA NOS.2132/DEL/2013 & 5123/DEL/2013 AY 2010 AY 2010 AY 2010 AY 2010- -- -11 & 2012 11 & 2012 11 & 2012 11 & 2012- -- -13 : 13 : 13 : 13 :- -- - 7. ITA NO.2132/DEL/2013 IS THE ASSESSEES APPEAL FO R AY 2010-11 AND ITA NO.5123/DEL/2013 IS THE ASSESSEES APPEAL F OR AY 2012-13. ITA-2132/DEL/2013 & 3 OTHERS 5 8. IN BOTH THESE APPEALS, THE GROUNDS RAISED BY THE ASSESSEE ARE IDENTICAL TO THE GROUNDS RAISED BY THE ASSESSEE AND THE REVENUE FOR AY 2011-12. FOR THE DETAILED DISCUSSION THEREIN, THE ORDERS OF THE AUTHORITIES BELOW FOR AY 2010-11 AS WELL AS AY 2012 -13 ARE ALSO SET ASIDE AND HE IS DIRECTED TO READJUDICATE THE ISSUE IN THE LIGHT OF OUR DIRECTION IN PARAGRAPH NOS.4 TO 6 ABOVE. 9. IN THE RESULT, ALL THE APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2014. SD/- SD/- ( (( (H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU) )) ) (G.D (G.D (G.D (G.D. AGRAWAL . AGRAWAL . AGRAWAL . AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 26.09.2014 VK. COPY FORWARDED TO: - 1. ASSESSEE : DIRECTOR GENERAL HEALTH, DIRECTOR GENERAL HEALTH, DIRECTOR GENERAL HEALTH, DIRECTOR GENERAL HEALTH, NEAR I.T. PARK, SHASHTRADHARA ROAD, NEAR I.T. PARK, SHASHTRADHARA ROAD, NEAR I.T. PARK, SHASHTRADHARA ROAD, NEAR I.T. PARK, SHASHTRADHARA ROAD, DEHRADUN. DEHRADUN. DEHRADUN. DEHRADUN. 2. REVENUE : DEPUTY COMMISSIONER OF INCOME TAX (TDS), DEPUTY COMMISSIONER OF INCOME TAX (TDS), DEPUTY COMMISSIONER OF INCOME TAX (TDS), DEPUTY COMMISSIONER OF INCOME TAX (TDS), DEHRA DEHRA DEHRA DEHRADUN. DUN. DUN. DUN. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR