DCIT (TDS), JODHPUR V. Jodhpur Vidyut Vitran Nigam Ltd., JODHPUR

ITA 230/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5191 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Assessee Lawyers: ANIL BHANSALI
• Section: 201(1); 10; 2; 11

Judgement Text

230.231. IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 2 30 & 231 / JODH /201 5 (ASST. YEAR S : 20 1 0 - 11 & 2011 - 12 ) DCIT (TDS) , JODHPUR . VS. JODHPUR VIDYUT VITRAN NIGAM LTD., NEW POWER HOUSE, JODHPUR. PAN NO . AAACJ 8578 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL BHANSALI ADV. DEPARTMENT BY : S HRI S.L . MOURYA - DR DATE OF HEARING : 1 6 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 6 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER TH E S E ARE THE APPEAL S FILED BY THE REVENUE AGAINST THE SEPARATE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , JODHPUR , BOTH DATED 13 /0 3 /201 5 . 2. THE REVE N UE HAS RAISED THE COMMON GROUNDS OF APPEAL IN BOTH THE APPEALS , WHICH READ AS UNDER: - 1. THE CIT(A) - 1, JODHPUR HAS ERRED IN HO L DING THAT THE PROVISIONS OF SEC. 194J ARE NOT APPLICABLE TO THE ASSESSEES CASE AND IT IS NOT LIABLE TO DEDUCT TAX AT SOURCE ON TRANSMISSION AND WHEELING CHARGES PAID BY IT TO RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD. FOR TRANSMISSION OF ELECTRICITY THROUGH ITS TRANSMISSION SYSTEM MAINTAINING THE KEY PARAMETERS. 2. THE CIT(A) - 1 , JODHPUR HAS ERRED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO PAY INTEREST UNDER SEC. 201(1A) OF INCOME - TAX ACT. 2 ITA NO S . 230 & 231 / JODH /201 5 3 . BRIEF FACTS OF THE CASE ARE THAT DCIT (TDS) , JODHPUR PASSED THE ORDER UNDER SEC. 201(1)/201(1A) OF THE ACT AND RAISED A LIABILITY OF RS.4,85,78,598/ - COMPRISING OF TDS UNDER SEC. 201(1) OF RS. 3,09,533/ - AND INTEREST ON TDS UNDER SEC. 201(1A) OF RS. 4,82,69,065/ - VIDE ORDER DATED 13/03/2012 ON ACCOUNT OF NON - DEDUCTION O F TDS ON PAYMENT MADE TO M/S. RAJASTHAN RAJYA VIDYUT PR A SARAN NIGAM LTD. IN THE ASSESSMENT YEAR 2010 - 11 , AND SIMILARLY , RA I SED LIABILITY OF RS.6,05,76,127/ - COMPRISING OF TDS UNDER SEC. 201(1) OF RS.5,24,205/ - AND INTEREST ON TDS UNDER SEC. 201(1A) OF RS. 6,00,51,922/ - VIDE ORDER DATED 13/03/2013 ON ACCOUNT OF NON - DEDU CTION OF TDS ON PAYMENTS MADE TO M/S. RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DEMAND OF TDS UNDER SEC. 201(1) AND INTEREST UNDER SEC. 201(1A) BY OBSERVING AS UNDER: - 06. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE ORDER DATED 27 - 9 - 2013 OF HON'BLE ITAT, JODHPUR BENCH, JODHPUR IN RESPECT OF ITA NO. 287 TO 291/JODH/2013 FOR AY 2005 - 06 TO 2009 - 10 AND I FIND THAT ISSUE WHETHER THE ASSESSEE I S LIABLE TO DEDUCT TDS U/S 194J ON PAYMENTS MADE TO M/S. RVPNL AND OTHERS AGAINST TRANSMISSION CHARGES CONSIDERING FOR TECHNICAL SERVICES HAS ALREADY BEEN DECIDED BY THE HON'BLE ITAT. THE HON'BLE ITAT, JODHPUR BENCH, WHILE DECIDING THE ISSUE RELIED ON THE FINDINGS OF THE HON'BLE ITAT, JAIPUR BENCH IN THE CASE OF JAIPUR VIDYUT NIGAM LTD. DCIT IN ITA NO. 132/JP/2009 FOR AY 2006 - 07. FOR THE SAKE OF CLARITY, IT WOULD BE IMPERATIVE TO QUOTE THE FINDINGS OF HON'BLE ITAT, WHICH ARE REPRODUCED HEREINUNDER: - AFTER THAT, THE SCENARIO THAT EMERGES IS THAT THE JAIPUR BENCH ORDER (SUPRA) HAS A BINDING EFFECT. THE HELD AND RELEVANT PORTION OF THAT ORDER IS AS UNDER: - ASSESSEE, AN ELECTRICITY DISTRIBUTION COMPANY, WAS NOT LIABLE TO DEDUCT TAX AT SOURCE U/S 194J FR OM THE PAYMENT OF TRANSMISSION/SLDC CHARGES TO THE TRANSMISSION COMPANY RVPN AS THE OPERATION AND MAINTENANCE OF TRANSMISSION LINE BY RVPN AND THE USER OF THEIR LINES BY THE ASSESSEE FROM TRANSMITTING ENERGY DOES NOT RESULT IN ANY TECHNICAL SERVICE BEING R ENDERED TO THE ASSESSEE, APART FROM THE FACT THAT THE PAYMENT OF TRANSMISSION/WHEELING/SLDC CHARGE IS REIMBURSEMENT OF THE COST . 5.1 THE ITAT JAIPUR BENCH FURTHER HELD THAT: 3 ITA NO S . 230 & 231 / JODH /201 5 THE CHENNAI BENCH OF ITAT IN CASE OF SINGAPORE AIRLINES LTD VS. ITO 7 SOT 84 [ CHENNAI] ON THE ISSUE OF LEVY OF INTEREST U/S 201(1 A) HAS HELD AS UNDER: THE GUJARAT HIGH COURT HELD THAT IF THE REVENUE IS PERMITTED TO LEVY INTEREST U/S 201(1 A) OF THE ACT, EVEN IN A CASE WHERE THE PERSON LIABLE TO PAY TAX HAS PAID THE TAX ON THE DATE DUE FOR THE TAX THE REVENUE WOULD DERIVE UNDUE BENEFIT OR ADVANTAGE BY GETTING INTEREST ON THE AMOUNT OF TAX WHICH HAD ALREADY BEEN PAID ON THE DUE DATE. ACCORDING TO THE GUJARAT HIGH COURT SUCH A POSITION CANNOT BE PERMITTED. THE CBDT HAS ALSO CLARIFIED IN THE CIRCULAR [SUPRA] THAT INTEREST HAS TO BE RECOVERED TILL THE TAXES ARE PAID IN VIEW OF ABOVE, WE DO NOT FIND ANY JUSTIFICATION FOR LEVYING TAX TILL THE MONTH OF OCTOBER 1999. SINCE THE ACTUAL DATE OF PAYMENT OF TAX BY THE INTERNATIONAL AIRPORT OF IND IA IS NOT AVAILABLE ON THE FILE OF THIS TRIBUNAL, THE A.O. MAY VERIFY THE ACTUAL DATE ON WHICH THE TAXES WERE PAID BY INTERNATIONAL AIRPORT OF INDIA AND THEREAFTER COMPUTE THE INTEREST FROM THE DATE ON WHICH THE DEDUCTION HAS TO BE MADE TILL THE DATE OF AC TUAL PAYMENT OF THE RATE APPLICABLE AS PER STATUTORY PROVISION. WE HAVE ALSO OCCASION TO COME ACROSS WITH THE RECENT DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS ELI ULLY & CO. [INDIA] P. LTD & ORS [2009] 21 DTR [SUPREME COURT] 74 WHEREIN IT HAS BEEN HELD THAT AS FAR AS THE PERIOD OF DEFAULT IS CONCERNED, THE PERIOD STARTS FROM THE DATE OF DEDUCTIBILITY BILL THE DATE OF ACTUAL PAYMENT OF TAX DATE OF PAYMENT BY THE CONCERNED EMPLOYEE CAN BE TREATED AS THE D ATE OF ACTUAL PAYMENT. WHEN THE PAYEE H AS PAID MORE TAX THAN THE TAX PAYABLE BY IT AND REFUND IS DUE TO IT AS A RESULT OF TDS BY THE ASSESSEE, INTEREST U/S 201(1 A) CANNOT BE CHARGED. IN VIEW OF THE ABOVE AND PARTICULARLY IN THE FACTS OF THE PRESENT CASE NO INTEREST U/S 201 [1 A] IS LEVIABLE ON THE ASSESSEE. HENCE THIS GROUND IS ALLOWED. 6. THEREFORE, BY RESPECTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER, WE HOLD THAT THE PROVISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE TO THIS ASSESSEES AND IT IS NOT LIABLE TO DEDUCT TAX AT SOURCE QUA T HE TRANSMISSION AND WHEELING CHARGES PAID BY IT TO RVPN FOR THE USE OF THEIR TRANSMISSION SYSTEM. ACCORDINGLY, THE A.O. HAS WRONGLY HELD THIS ASSESSEE IS A ASSESSEE IN DEFAULT U/S 201 OF THE ACT AND HAS INCORRECTLY IMPOSED INTEREST U/S 201(1 A). 6.1. EVENTUALL Y, THE HON'BLE ITAT, JODHPUR BENCH, JODHPUR ALLOWED THE APPEALS OF THE ASSESSEE. 6.1.1. FROM THE ABOVE FINDINGS, IT IS CLEAR THAT THE ASSESSEE IS NOT LIABL E TO DEDUCT TDS U/S 19J ON PAYMENTS MADE TO M/S. RVPNL AND 4 ITA NO S . 230 & 231 / JODH /201 5 OTHERS AGAINST TRANSMISSION CHARGES CONSIDERING THEM AS PAYMENT FOR TECHNICAL SERVICES. SINCE FACTS OF THE P RESENT ARE SIMILAR AND IDENTICAL TO THAT OF THE ASSESSEES OWN CASE IN AY 2005 - 06 AND 2009 - 10, THEREFORE, ANY DIVERSION FROM THE DECISION OF HON'BLE ITAT, WOULD NOT BE A JUSTI FIABLE ACTION. THEREFORE RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HON'BLE ITAT, IT IS HELD THAT THE PROVISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE TO THIS ASSESSEES AND IT IS NOT LIABLE TO DEDUCT TAX AT SOURCE QUA THE TRANSMISSION AND WHEEL ING CHARGES PAID BY IT TO RVPN FOR THE USE OF THEIR TRANSMISSION SYSTEM. THE LIABILITY IMPOSED AT RS. 4,85,78,598/ - BY THE DCIT(TDS) VIDE ORDER U/S 201 (1)/201 (1) DATED 13 - 3 - 2013 IS HEREBY CANCELLED. THE GROUNDS OF APPEAL ARE DECIDED IN FAVOUR OF THE APPE LLANT. 5. AT THE TIME OF HEARING , DEPARTMENTAL REPRESENTATIVE AGREED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DEMAND FOR TDS UNDER SEC. 201(1) AND INTEREST 201(1A) BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2005 - 06 AND 2009 - 10 . 6 . DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY GOOD REASON TO NOT TO FOLLOW THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2005 - 06 & 2009 - 10 . NO MATERIAL WAS ALSO BROUGHT ON RECORD BY THE DEPARTMENTAL REPRESENTATIVE TO SHOW THAT THE ORDER OF THE TRIBUNAL WAS REVERSED IN APPEAL BY ANY HIGHER AUTHORITY. HENCE, WE FIND NO MERIT IN THE APPEALS OF THE REVENUE AND ACCORDINGLY THEY ARE DISMISSED. 7. IN THE RESULT, APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 1 6 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 6 TH MARCH , 201 6 . 5 ITA NO S . 230 & 231 / JODH /201 5 VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER .