M/s. IBM India Private Limited, Bangalore V. Assistant Commissioner of Income-Tax - TDS, Bangalore

ITA 2263/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7633 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 21-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Question of law
• Section: 260A; 201(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S. 2263 TO 2272/BANG/2016 ASSESSMENT YEAR S : 2010 - 11 TO 2014 - 15 M/S. IBM INDIA PVT. LTD., NO. 12, SUBRAMANYA ARCADE, BANNERGHATTA MAIN ROAD, BANGALORE 560 029. PAN: AAACI4403L VS. THE ASSISTANT COMMISSIONER OF INCOME TAX-TDS, CIRCLE 2 (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SHARATH RAO, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 10 .0 7 .2018 DATE OF PRONOUNCEMENT : 20 .0 7 .2018 O R D E R PER BENCH OUT OF THIS BUNCH OF 10 APPEALS, FIVE APPEALS ARE I N RESPECT OF DEMAND RAISED U/S. 201(1) OF IT ACT FOR ASSESSMENT YEARS 2010-11 TO 2014-15 AND THE REMAINING FIVE APPEALS ARE IN RESPECT OF DEMAND RAI SED BY THE AO U/S. 201(1A) OF IT ACT FOR ASSESSMENT YEARS 2010-11 TO 2014-15. THESE APPEALS ARE DIRECTED AGAINST A COMBINED ORDER OF LD. CIT (A)-13 , BANGALORE DATED 17.10.2016. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF DEMAND RAISED U/S. 201(1) OF IT ACT ARE IDENTICAL AND HENCE, REPRODUCED FROM ITA NO. 2264/BANG/2016. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, I BM INDIA PRIVATE LIMITED (HEREINAFTER REFERRED TO AS 'THE APPELLANT' ), RESPECTFULLY SUBMITS IN RESPECT OF THE ORDER PASSED BY THE LEARN ED COMMISSIONER OF INCOME-TAX (APPEALS) ['CIT (A)'] UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') TH AT: 1. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACT S IN UPHOLDING THE ITA NOS. 2263 TO 2272/BANG/2016 PAGE 2 OF 8 ORDER OF THE ASSISTANT COMMISSIONER OF INCOME-TAX TDS ('AO') AND PASSING AN ORDER UNDER SECTION 250 OF THE ACT 2. THE LEARNED CIT (A) HAS ERRED IN PASSING AN ORDE R UNDER SECTION 250 OF THE ACT WHICH IS BAD IN LAW AND ON FACTS. 3. THE LEARNED CIT (A) AND THE AO HAVE ERRED IN LAW AND ON FACTS HOLDING THAT THE 'EXPENSE PROVISIONS' DEBITED TO TH E PROFIT AND LOSS ACCOUNT AS AT THE YEAR-END WOULD ATTRACT THE TAX DE DUCTION AT SOURCE PROVISIONS UNDER THE ACT WITHOUT APPRECIATING THE F ACT THAT NO LIABILITY TO PAY TO THE VENDORS HAD ACCRUED TO THE APPELLANT IN RELATION TO SUCH PROVISION. 4. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THE APPELLANT TO BE AN 'ASSESSEE IN DEFAULT ' UNDER SECTION 201(1) OF THE ACT IN RESPECT OF THE EXPENSE PROVISI ONS DEBITED TO THE PROFIT AND LOSS ACCOUNT. 5. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT MERE CREATION OF PROVISI ON BY THE APPELLANT DOES NOT RESULT IN CREATION OF INCOME IN THE HANDS OF THE PAYEE. AT THE TIME OF CREATION OF PROVISION, EITHER THE PAYEE OR THE ACTUAL AMOUNT TO BE PAID AGAINST THE PAYEE CANNOT BE DETERMINED WITH CERTAINTY. 6. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT THE EXISTENCE OF 'INCOME ' ELEMENT IN THE HANDS OF THE PAYEES, WITH A RIGHT TO RECEIVE THE AM OUNTS BEING CERTAIN, IS A SINE QUA NON FOR APPLICABILITY OF THE TAX DEDU CTION PROVISIONS UNDER THE ACT 7. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THE VARIOUS JUDGMENTS CITED B Y THE APPELLANT AND CIRCULARS ISSUED BY THE CBDT WHICH RECOGNIZE THE FA CT THAT THERE CAN BE NO LIABILITY TO DEDUCT TAX AT SOURCE ON 'EXPENSE PROVISIONS'. 8. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN STATING THAT THE APPELLANT HAS BELATEDLY DEDUCTED T DS ON 'EXPENSE PROVISIONS' DURING THE SUBSEQUENT YEAR I.E. WHEN TH E ACTUAL EXPENSES WERE RECORDED/PAYMENTS WERE MADE TO VENDORS THEREBY HOLDING THE APPELLANT TO BE AN 'ASSESSEE IN DEFAULT' UNDER SECT ION 201 OF THE ACT. 9. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT, HAVING MADE A DISALLOWA NCE UNDER SECTION 40(A) OF THE ACT WAS ESTOPPED FROM CONTENDING THAT THERE WAS NO LIABILITY TO DEDUCT TAX UNDER CHAPTER XVII-B OF THE ACT, WITHOUT APPRECIATING THAT A DISALLOWANCE UNDER SECTION 40(A ) WOULD NOT AUTOMATICALLY RESULT IN A DEFAULT IN TERMS OF SECTI ON 201 OF THE ACT 10. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT THE LIABILITY TO DEDUCT TAX AT SOURCE WOULD ARISE ON CREDIT ITA NOS. 2263 TO 2272/BANG/2016 PAGE 3 OF 8 TO A 'SUSPENSE ACCOUNT', INCLUDING A 'PROVISION' CR EATED IN THE BOOKS OF ACCOUNT AND THAT THEREFORE THE APPELLANT IS REQUIRE D TO DEDUCT TAX AT SOURCE ON SUCH PROVISIONS. 11. THE LEARNED CIT(A), BEING AN APPELLATE AUTHORIT Y LOWER TO THE HONOURABLE ITAT, HAS ERRED IN LAW IN HOLDING THE DE CISION OF THE JURISDICTIONAL ITAT IN THE CASE OF BOSCH LIMITED VS . INCOME TAX OFFICER (ITA 1583/BNG/2014) AS 'PER INCURIAM' AND A CCORDINGLY TO NOT HAVE A BINDING PRECEDENT VALUE. EACH OF THE ABOVE GROUND IS INDEPENDENT AND WITHOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL PREFERRED BY THE APPELLANT FURTHER, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME B EFORE OR AT, THE TIME OF HEARING, OF THE APPEAL. 3. THE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF DEMAND RAISED U/S. 201(1A) OF IT ACT ARE ALSO IDENTICAL AND HENCE, REPRODUCED FROM ITA NO. 2263/BANG/2016. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, I BM INDIA PRIVATE LIMITED (HEREINAFTER REFERRED TO AS 'THE APPELLANT' ), RESPECTFULLY SUBMITS IN RESPECT OF THE ORDER PASSED BY THE LEARN ED COMMISSIONER OF INCOME-TAX (APPEALS) ['CIT (A)'] UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') TH AT: 1. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACT S IN UPHOLDING THE ORDER OF THE ASSISTANT COMMISSIONER OF INCOME-TAX TDS ('AO') AND PASSING AN ORDER UNDER SECTION 250 OF THE ACT 2. THE LEARNED CIT (A) HAS ERRED IN PASSING AN ORDE R UNDER SECTION 250 OF THE ACT WHICH IS BAD IN LAW AND ON FACTS. 3. THE LEARNED CIT (A) AND THE AO HAVE ERRED IN LAW AND ON FACTS HOLDING THAT THE 'EXPENSE PROVISIONS' DEBITED TO TH E PROFIT AND LOSS ACCOUNT AS AT THE YEAR-END WOULD ATTRACT THE TAX DE DUCTION AT SOURCE PROVISIONS UNDER THE ACT WITHOUT APPRECIATING THE F ACT THAT NO LIABILITY TO PAY TO THE VENDORS HAD ACCRUED TO THE APPELLANT IN RELATION TO SUCH PROVISION. 4. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THE APPELLANT TO BE AN 'ASSESSEE IN DEFAULT ' UNDER SECTION 201(1) OF THE ACT IN RESPECT OF THE EXPENSE PROVISI ONS DEBITED TO THE PROFIT AND LOSS ACCOUNT. 5. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT MERE CREATION OF PROVISI ON BY THE APPELLANT DOES NOT RESULT IN CREATION OF INCOME IN THE HANDS OF THE PAYEE. AT THE ITA NOS. 2263 TO 2272/BANG/2016 PAGE 4 OF 8 TIME OF CREATION OF PROVISION, EITHER THE PAYEE OR THE ACTUAL AMOUNT TO BE PAID AGAINST THE PAYEE CANNOT BE DETERMINED WITH CERTAINTY. 6. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT THE EXISTENCE OF 'INCOME ' ELEMENT IN THE HANDS OF THE PAYEES, WITH A RIGHT TO RECEIVE THE AM OUNTS BEING CERTAIN, IS A SINE QUA NON FOR APPLICABILITY OF THE TAX DEDU CTION PROVISIONS UNDER THE ACT 7. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THE VARIOUS JUDGMENTS CITED B Y THE APPELLANT AND CIRCULARS ISSUED BY THE CBDT WHICH RECOGNIZE THE FA CT THAT THERE CAN BE NO LIABILITY TO DEDUCT TAX AT SOURCE ON 'EXPENSE PROVISIONS'. 8. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN STATING THAT THE APPELLANT HAS BELATEDLY DEDUCTED T DS ON 'EXPENSE PROVISIONS' DURING THE SUBSEQUENT YEAR I.E. WHEN TH E ACTUAL EXPENSES WERE RECORDED/PAYMENTS WERE MADE TO VENDORS THEREBY HOLDING THE APPELLANT TO BE AN 'ASSESSEE IN DEFAULT' UNDER SECT ION 201 OF THE ACT. 9. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT, HAVING MADE A DISALLOWA NCE UNDER SECTION 40(A) OF THE ACT WAS ESTOPPED FROM CONTENDING THAT THERE WAS NO LIABILITY TO DEDUCT TAX UNDER CHAPTER XVII-B OF THE ACT, WITHOUT APPRECIATING THAT A DISALLOWANCE UNDER SECTION 40(A ) WOULD NOT AUTOMATICALLY RESULT IN A DEFAULT IN TERMS OF SECTI ON 201 OF THE ACT 10. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT THE LIABILITY TO DEDUCT TAX AT SOURCE WOULD ARISE ON CREDIT TO A 'SUSPENSE ACCOUNT', INCLUDING A 'PROVISION' CR EATED IN THE BOOKS OF ACCOUNT AND THAT THEREFORE THE APPELLANT IS REQUIRE D TO DEDUCT TAX AT SOURCE ON SUCH PROVISIONS. 11. THE LEARNED CIT(A), BEING AN APPELLATE AUTHORIT Y LOWER TO THE HONOURABLE ITAT, HAS ERRED IN LAW IN HOLDING THE DE CISION OF THE JURISDICTIONAL ITAT IN THE CASE OF BOSCH LIMITED VS . INCOME TAX OFFICER (ITA 1583/BNG/2014) AS 'PER INCURIAM' AND A CCORDINGLY TO NOT HAVE A BINDING PRECEDENT VALUE. 12. THE LEARNED CIT(A) AND THE AO HAVE ERRED IN LAW AND ON FACTS IN FAILING TO APPRECIATE THAT THE LIABILITY UNDER SECT ION 201 WOULD HAVE TO BE DECIDED BASED ON THE PROVISIONS OF LAW RELATING THERETO AND THAT THEREFORE UNLESS TAX WAS DEDUCTIBLE IN TERMS OF THE PROVISIONS IN CHAPTER XVII-B OF THE ACT, NO LIABILITY UNDER SECTI ON 201(1A) COULD BE FOISTED ON THE APPELLANT. 13. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FAC TS IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 201(1A) OF THE A CT EACH OF THE ABOVE GROUND IS INDEPENDENT AND WITHOUT PREJUDICE TO THE ITA NOS. 2263 TO 2272/BANG/2016 PAGE 5 OF 8 OTHER GROUNDS OF APPEAL PREFERRED BY THE APPELLANT FURTHER, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME B EFORE OR AT, THE TIME OF HEARING, OF THE APPEAL. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE ISSUE INVOLVED IN THESE APPEALS IS COVERED AGAINST THE AS SESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 TO 2009-10 IN ITA NOS. 749 TO 752/BANG/2012 & 1588 TO 1591/BANG/2012 DATED 14.05.2015 AND HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER. HE ALSO S UBMITTED THAT AGAINST THIS TRIBUNAL ORDER, THE ASSESSEE HAS PREFERRED APPEAL B EFORE HON'BLE KARNATAKA HIGH COURT AND AS PER THE JUDGMENT OF HON'BLE KARNA TAKA HIGH COURT DATED 01.01.2016 IN ITA NOS. 562 TO 565/2015, THE APPEALS WERE ADMITTED ON TWO QUESTIONS OF LAW. HE SUBMITTED A COPY OF THIS JUDG MENT OF HON'BLE KARNATAKA HIGH COURT. THEREAFTER HE SUBMITTED A DECLARATION UNDER SUB SECTION 1 OF SECTION 158A OF IT ACT STATING THAT FINAL DECISION ON THE QUESTIONS OF LAW ADMITTED BY HON'BLE KARNATAKA HIGH COURT IN THOSE Y EARS MAY BE APPLIED IN THE PRESENT YEARS ALSO AND THE ASSESSEE WILL NOT RAISE SUCH QUESTION OF LAW IN THE PRESENT YEARS BEFORE HON'BLE KARNATAKA HIGH COURT U /S. 260A. SUCH DECLARATION OF THE ASSESSEE FURNISHED UNDER SUB SEC TION 1 OF SECTION 158A WAS FORWARDED TO THE AO ASKING THE AO TO SUBMIT A REPOR T IN THIS REGARD. THE LD. DR OF REVENUE FURNISHED THE REPORT RECEIVED FROM THE A O ON 25.06.2018 AS PER WHICH THE AO HAS STATED THAT QUESTION OF LAW PENDIN G IN THE ASSESSEES CASE FOR ASSESSMENT YEARS 2006-07 TO 2009-10 BEFORE HON' BLE KARNATAKA HIGH COURT IN ITA NOS. 562 TO 565/2015 U/S. 260A ARE IDE NTICAL WITH THE QUESTIONS OF LAW ARISING IN ASSESSEES CASE FOR ASSESSMENT YEARS 2010-11 TO 2014-15 IN THESE 10 APPEALS I.E. ITA NOS. 2263 TO 2272/BANG/20 16 WHICH ARE PENDING BEFORE THE TRIBUNAL. THE AO HAS STATED THAT THE AS SESSEES DECLARATION U/S. 158A (1) MAY BE CONSIDERED ACCORDINGLY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN VIEW OF THE FACT DISCUSSED ABOVE, WE ADMIT THE CLAIM OF THE ASSESSEE THAT THE QUESTION OF LAW ARISING IN THE ASSESSMENT YEARS 2006-07 TO 2009-10 BEFORE HON' BLE KARNATAKA HIGH COURT ARE IDENTICAL TO THE QUESTION OF LAW ARISING IN THE PRESENT 10 APPEALS. HENCE WE DISPOSE OF THESE APPEALS BY RESPECTFULLY F OLLOWING THE TRIBUNAL ORDER ITA NOS. 2263 TO 2272/BANG/2016 PAGE 6 OF 8 IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2006-07 TO 2009-10 ON SIMILAR LINE EXCEPT WHERE FACTS ARE DIFFERENT. IN THOSE YEA RS, THE ISSUE REGARDING DEMAND U/S 201 (1) WAS DECIDED AS PER PARA 23 & 24 OF THAT TRIBUNAL ORDER AND HENCE, FOR READY REFERENCE, WE REPRODUCE THESE PARA S HEREIN BELOW:- 23. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND THE LEARNED DR. THE LEARNED COUNS EL FOR THE ASSESSEE AT THE OUTSET BROUGHT TO OUR NOTICE THAT P ENDING DISPOSAL OF THE APPEALS, THE ASSESSEE HAS FURNISHED BEFORE THE AO, DETAILS REGARDING THE ACTUAL PAYMENT OF TDS IN SUBSEQUENT F INANCIAL YEAR, ON THE PROVISIONS MADE IN THE VARIOUS FINANCIAL YEARS. THESE DETAILS WERE VERIFIED BY THE AO. THE AO HAS ADDRESSED A LETTER T O THE DR IN WHICH THE AO AFTER VERIFICATION HAS FOUND THAT THE ASSESS EE HAD DEDUCTED TAX AT SOURCE AT THE TIME WHEN THE PROVISION MADE IN ON E FINANCIAL YEAR IS SUBSEQUENTLY REVERSED AND THE EXPENSES BOOKED IN TH E SUBSEQUENT FINANCIAL YEAR. THE FOLLOWING ARE THE CONTENTS OF T HE SAID LETTER (COPY FILED BY DR IN COURT), IN SO FAR AS RELATES TO TAXE S DEDUCTIBLE AT SOURCE. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE HONBLE ITAT THE ASSESSEE COMPANY TOOK THE SAME PLEA THAT I T HAS DEDUCTED TAX AT SOURCE IN THE SUBSEQUENT YEAR ON ALL THE AMOUNTS THAT WERE DISALLOWED U/S 40A (I) AND 40A (IA) AS AND WHEN THE SE AMOUNTS WERE PAID. THE HONBLE ITAT THEREFORE DIRECTED THAT SUCH DETAILS BE PRODUCED BEFORE THE INCOME TAX OFFICER (TDS) FOR VE RIFICATION. 4. AT THE REMAND STAGE THE ASSESSEE COMPANY HAS NOW SUBMITTED YEAR WISE DETAILS OF ALL CHARGES PAID, PROFESSIONAL CHAR GES PAID, CONTRACT AMOUNTS PAID AND DETAILS OF OTHER PAYMENTS. THE DET AILS OF YEAR END PROVISIONS AS PER TAX AUDIT REPORT (DISALLOWED U/S 40A (I) AND 40A (IA), PAYMENTS MADE IN SUBSEQUENT YEAR IN RESPECT OF THES E PROVISIONS AND DETAILS OF TAX DEDUCTED AT SOURCE ON SUCH PAYMENTS ALONG WITH PROOF OF DEPOSIT OF SUCH TDS INTO GOVT. ACCOUNT WERE CALLED FOR AND SYSTEMATICALLY VERIFIED. SINCE, THE TRANSACTIONS WE RE ENORMOUS IN RESPECT OF THESE FOUR ASSESSMENT YEARS, VERIFICATIO NS WERE CARRIED OUT RANDOMLY FOR DIFFERENT MONTHS FOR THESE ASSESSMENT YEARS. AFTER THOROUGH VERIFICATION OF THE TRANSACTIONS IN RESPECT OF THE MONTHS SELECTED RANDOMLY AND AFTER ANALYSIS OF CONSOLIDATE D ANNUAL FIGURES SEPARATELY FOR EACH SECTIONS OF TDS, IT IS SEEN THA T THE AMOUNTS WHICH WERE SHOWN IN THE PROVISIONS AS ON 31 MARCH OF A PA RTICULAR YEAR, WHETHER ETHER LIQUIDATED BY WAY OF PAYMENT OR WAS A DDED BACK TO THE PROFIT & LOSS ACCOUNT IN SUBSEQUENT YEAR. WHEREVER PAYMENTS WERE MADE TAX HAS BEEN DEDUCTED AT SOURCE UNDER THE RELE VANT PROVISIONS OF THE IT ACT AND REMITTED TO THE GOVT. ACCOUNT. 5. THOUGH, THE HAS BEEN DEDUCTED AT SOURCE AT THE T IME OF PAYMENTS IN RESPECT OF PROVISIONS MADE AS ON 31 MARCH, IT IS BE STATED THAT IN WAS THE ASSESSEE COMPANYS RESPONSIBILITY TO DEDUCT TAX AT SOURCE AND REMIT IT TO THE GOVT. ACCOUNT AS SOON AS ITEM OF EX PENDITURE IS DEBITED BY IT IN THE BOOKS OF ACCOUNTS. REFERENCE IS INVITE D TO SUB SECTION 2 OF ITA NOS. 2263 TO 2272/BANG/2016 PAGE 7 OF 8 SECTION 194C, WHICH MANDATES THAT THE ANY AMOUNT CR EDITED TO ANY ACCOUNT WHETHER CALLED SUSPENSE ACCOUNT OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNTS SUCH CREDITING SHALL BE DEEME D TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PRO VISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. SIMILAR PROVISIONS /EXPLANATION IS ALSO TO BE FOUND IN OTHER SECTIONS RELATING TO TDS. THUS , IT CAN BE SEEN THAT THE ASSESSEE COMPANY HAS FAILED TO DEDUCT TAX AT SO URCE ON THE PROVISIONS MADE BY IT ON 31 ST MARCH WITHIN THE STIPULATED TIME. THE ASSESSEE COMPANY HAS DEDUCTED TAX AT SOURCE ON THESE AMOUNTS IN THE SUBSEQUENT YEAR AS AND WHEN THE SAME WERE PAID BY IT. THUS, IT IS LIABLE FOR CHARGING OF INTEREST U/S 201 (1A) FOR DELAYED DEDUCTION AND REMITTANCE OF TAX TO GOVT. ACCOUNT. (EMPHASIS SUPPLIED) 24. IN VIEW OF THE ABOVE, THE DEMAND ON ACCOUNT OF TAX /S 201 (1) OF THE ACT, IN OUR VIEW, WILL NO LONGER SURVIVE. HOWEVER T HE APPEALS WILL SURVIVE WITH REGARD TO THE LIABILITY OF THE ASSESSE E TO INTEREST U/S 201 (1A) OF THE ACT. THEREFORE THE APPEALS IN SO FAR AS IT RELATES TO CHALLENGE TO ORDER U/S 201 (1) OF THE ACT HAVE TO B E ALLOWED. 6. FROM THE ABOVE PARAS, IT IS SEEN THAT IN THOSE Y EARS, THE TRIBUNAL HAS CONSIDERED A REPORT OF THE AO AS PER WHICH, IT WAS REPORTED BY THE AO THAT THE ASSESSEE HAS IN SUBSEQUENT YEAR EITHER DEDUCTED TAX AT THE TIME OF PAYMENT OR ADDED BACK THE RELEVANT EXPENDITURE IN P & L ACCOUN T. IT IS ALSO REPORTED THAT WHEREVER TDS WAS DEDUCTED IN SUBSEQUENT YEAR, THE S AME WAS REMITTED TO GOVT. ACCOUNT. BASED ON THIS REPORT OF THE AO, THE TRIBUNAL IN THOSE YEARS HELD THAT THE DEMAND U/S 201 (1) DOES NOT SURVIVE AND CO NFIRMED THE DEMANDS U/S 201 (1A) ONLY. IN THE PRESENT YEARS, NO SUCH REPORT OF THE AO IS BROUGHT ON RECORD TO SHOW THAT TDS IS DEDUCTED IN LATER YEARS AT THE TIME OF PAYMENT AND REMITTED TO GOVT. ACCOUNT OR WHERE PAYMENT WAS NOT MADE, THE PROVISION OF EXPENSES WAS WRITTEN BACK AND CREDITED TO P & L ACC OUNT. HENCE, THE ASSESSEE CANNOT GET ANY RELIEF IN THE PRESENT YEARS ON SIMILAR LINE. RATHER ONE THING STANDS ADMITTED THAT THE LIABILITY OF THE ASS ESSEE IS THERE FOR TDS AND SINCE, THIS LIABILITY IS NOT DISCHARGED IN THE PRES ENT YEARS OR IN ANY SUBSEQUENT YEAR, THE ISSUE REGARDING TDS U/S 201 (1) IS ALSO D ECIDED AGAINST THE ASSESSEE AND ACCORDINGLY, WE DISMISS ALL TEN APPEALS OF THE ASSESSEE REGARDING DEMANDS U/S 201 (1) AS WELL AS LEVY OF INTEREST U/S . 201(1A) OF IT ACT. WE ALSO HOLD THAT THE ASSESSEES CLAIM U/S. 158A (3) IS ADM ITTED AND THEREFORE, ASSESSEE SHALL NOT BE ENTITLED TO RAISE ANY QUESTIO N OF LAW IN THE PRESENT FIVE YEARS BEFORE HON'BLE KARNATAKA HIGH COURT U/S. 260A OF IT ACT AND WHEN THE ITA NOS. 2263 TO 2272/BANG/2016 PAGE 8 OF 8 DECISION ON THE QUESTIONS OF LAW IN ASSESSMENT YEAR S 2006-07 TO 2009-10 BECOMES FINAL, IT SHALL BE APPLIED TO THE PRESENT 5 YEARS ALSO I.E. ASSESSMENT YEARS 2010-11 TO 2014-15. ACCORDINGLY IF THE ASSES SEE GETS ANY RELIEF IN THOSE FOUR YEARS I.E. ASSESSMENT YEARS 2006-07 TO 2009-10 , THE PRESENT ORDER SHOULD BE AMENDED BY THE TRIBUNAL IN CONFORMITY WITH SUCH DECISION OF HON'BLE KARNATAKA HIGH COURT IN ASSESSMENT YEARS 2006-07 TO 2009-10. 7. IN THE RESULT, ALL TEN APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (SUNIL KUMAR YADAV) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH JULY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.