The ITO(TDS), Tirupathi V. Ravindra Bharthi Educational Society, Nellore

ITA 22/VIZ/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6607 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SATYANANDAM
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 2 2 / VIZ /201 7 (ASST. YEAR : 20 13 - 14 ) ITO (TDS), WARD - 1, TIRUPATI. V S . M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY, H.NO. 3/812, FATHEKHAPET, NELLORE. PAN NO. AAAAR 2715 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SHRI T. SATYANANDAM SR. DR DATE OF HEARING : 03 / 0 1 /201 8 . DATE OF PRONOUNCEMENT : 05 / 0 1 /201 8 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , TIRUPATI , DATED 30 / 11 /201 6 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS AN EDUCATIONAL INSTITUTION. A SURVEY OPERATION UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') WAS CONDUCTED IN THE OFFICE PREMISES OF M/S. RAVINDRA BHARATHI EDUICATIONAL SOCIETY, NELLORE TO VERIFY THE COMPLIANCE TO TDS 2 ITA NO. 2 2 /VIZ/2017 ( M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY ) PROVISIONS. IN THE ASSESSMENT ORDER , T HE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT DEDUCTED TDS UNDER SECTION 194C OF THE ACT . THE RELEVANT PART OF THE ASSESSING OFFICERS ORDER IS REPRODUCED AS UNDER: - FROM THE ANNEXURE FILED ALONG WITH THE RETURN OF INCOME FILED FOR THE F.Y. 2012 - 13, THE FOLLOWING PAYMENTS HAVE BEEN PAID. A) LABOUR PAYMENTS FOR EARTH WORK AND CONSTRUCTION WORK RS. 6,88,95,725 B) LABOUR CONTRACT PAYMENTS RS. 16,67,19,367 C ) PLUMBING WORKS RS. 42,38,520 D) ELECTRICAL WORKS RS. 9,85,000 E) FENCING WORKS RS. 1,43,300 TOTAL RS. 24,09,81,912 THE ABOVE ITEMS ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C @ 1% SINCE THE PAYMENTS ARE TO INDIVIDUALS. THEREFORE, THE ASSESSEE IS TREATED AS AN ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE I.T. ACT, 1961, FOR NON - DEDUCTION OF TDS . 3 . ON APPEAL, LD. CIT(A) DELETED THE ADDITION BY OBSERVING THAT THE ASSESSING OFFICER WITHOUT MAKING ANY EFFORT TO IDENTIFY THE PERSON/PERSONS TO WHOM PAYMENTS ARE MADE . MERELY IDENTIFYING ITEMS FROM THE ITEMS OF EXPENDITURE , WITHOUT IDENTIFYING THE NATURE OF PAYMENT AND THE PERS ON TO WHOM THE PAYMENTS ARE MADE, THE ASSESSING OFFICER HAS NOT MADE THE CORRECT ASSESSMENT OF FACTS. 4 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL . 3 ITA NO. 2 2 /VIZ/2017 ( M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY ) 5. LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) IS NOT CORRECT AND WITHOUT CONSIDERING ANY FACTUAL MATRIX OF THE CASE, SIMPLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . ON THE OTHER HAND, L D. C OUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) IS AN EXPARTE ORDER, THOUGH THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND SUBMITTED THAT THE ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATION. 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE BEFORE US IS THAT LD. CIT(A) IS NOT CORRECT IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 194C OF THE ACT . WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE GR O UND THAT THE ASSESSEE HAS MADE CERTAIN PAYMENTS TO VARIOUS CONTRACTORS FOR VARIOUS WORKS , AMOUNTING TO RS. 24,09,81,912/ - . THE ASSESSEE HAS TO DEDUCT TDS UNDER SECTION 194C OF THE ACT, THEREFORE THE ASSESSEE HAS BEEN TREATED AS ASSESSEE IS IN DEFAULT UNDER SECTION 201(1) OF THE ACT FOR NON - DEDUCTION OF TDS. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT EXAMINED WITH REGARD TO THE PAYMENTS MADE BY THE ASSESSEE TO THE PARTIES, HE ONLY CONSIDERED 4 ITA NO. 2 2 /VIZ/2017 ( M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY ) THE PAYMENT MADE TO VARIOUS WORKS. ON APPEAL, LD. CIT(A) HAS GIVEN A FINDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS NOT CORRECT FOR THE REASON THAT ASSESSING OFFICER HAS NOT MADE PROPERTY ENQUIRY IN RESPECT OF PARTIES TO WHOM PAYMENTS ARE MADE , AND DELETED THE ADDITION. WE FIND THAT BOTH THE AUTHORITIES BELOW HAVE NOT CONSIDERED TO WHOM THE ASSESSEE MADE THE PAYMENTS. WH E THER THERE IS A NY CONTRACT EXISTS BETWEEN THE ASSESSEE AND THE PARTIES TO WHOM PAYMENTS ARE MADE. THEREFORE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO EXAMINE THE PARTIES TO WHOM THE PAYMENTS ARE MADE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. WE ALSO DIRECT THE ASSESSEE TO FILE ALL RELEVANT DETAILS BEFORE THE ASSESSING OFFICER. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON TH IS 0 5 T H DAY OF JAN ., 201 8 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 5 T H JANUARY , 201 8 . VR/ - 5 ITA NO. 2 2 /VIZ/2017 ( M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY ) COPY TO: 1. THE ASSESSEE - M/S. RAVINDRA BHARATHI EDUCATIONAL SOCIETY, H.NO. 3/812, FATHEKHAPET, NELLORE. 2. THE REVENUE ITO (TDS), WARD - 1, TIRUPATI. 3. THE CIT (TDS), VIJAYAWADA. 4. THE CIT(A) , TIRUPATI. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.