Rajhans Cine World Limited, Surat V. The Income tax Officer,TDS-1, Surat

ITA 2301/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1722 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 11-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER RAJHANS CINE WORLD LIMITED. 3 RD FLOOR, RAJHANS HOUSE, OPP. GITANJALI PETROL PUMP, VARACHHA ROAD, SURAT PAN: AADCR4726N (APPELLANT) VS INCOME TAX OFFICER, TDS - 1, SURAT (RESPONDENT) REVENUE BY : S H RI RAJDEEP S INGH , SR. D . R. ASSESSEE BY: S H RI RASESH SHAH , A.R. DATE OF HEARING : 11 - 03 - 2 016 DATE OF PRONOUNCEMENT : 02 - 05 - 2 016 / ORDER P ER : S. S. GODARA , JU DICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR I SES FROM ORDER OF THE CIT(A) - I, SURAT DATED 10 - 06 - 2011 IN APPEAL NO. CAS - I/95/11 - 12 , IN PROC EEDINGS UNDER SECTION 201(1 ) & 201 (1A) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 2301 / A HD/20 11 A SSESSMENT YEAR 200 9 - 10 I .T.A NO. 2301 /AHD/20 11 A.Y. 2009 - 10 PAGE NO RAJHANS CINE WORLD LTD VS. ITO 2 2. THE ASSES SEE S SUBSTANTIVE GROUNDS PLEADED IN THE INSTANT APPEAL READ AS UNDER: - 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICE R IN PASSING ORDER U/S 201(1) OF THE ACT, HOLDING THE ASSESSEE AS 'ASSESSEE IN DEFAULT' IN RESPECT OF NON - DEDUCTION OF SURCHARGE ON TDS AMOUNTING TO RS. 41,920/ - & IN CHARGING INTEREST OF RS. 10,060/ - U/S 201(1A) OF THE ACT ON ABOVE AMOUNT. 2. ON THE FAC TS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) INSTEAD OF DELETING THE DEMAND OF RS. 7,38,670/ - & RS. 2,09,160/ - RAISED BY ASSESSING OFFICER U/S 201(1) & 201(1A) OF THE ACT RESPECTIVELY O N THE GROUND THAT ASSESSEE HAS NOT DEPOSITED TDS ALTHOUGH THE SAME HAS ALREADY BEEN DEPOSITED BY ASSESSEE HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ASCERTAIN THE VERACITY OF CLAIM OF ASSESSEE RELATING TO DEPOSIT OF TDS OF RS. 7,38,670/ - . 3. THIS A SSESSEE IS A DEDUCTOR FOR TDS PURPOSES. IT MADE INTEREST PAYMENT TO S/SH. MANJOJBHAI P. MOVALIA AND VIJAYBHAI P. DESAI TO THE TUNE OF RS. 16,06,620/ - AND RS. 24,63,368/ - ; RESPECTIVELY WITHOUT DEDUCTING SURCHARGE THEREUPON. THERE IS NO DISPUTE BETWEEN TH E PARTIES THAT THE ASSESSEE DEDUCTED TDS ON THESE INTEREST PAYMENTS EXCEPT THE ABOVE STATED SURCHARGE SHORTFALL. THE ASSESSING OFFICER IN SECTION 201(1) ORDER DECLARED IT AS AN ASSESSEE IN DEFAULT FORMING SUBJECT MATTER OF ITS FIRST SUBSTANTIVE GROUND. 4. THE ASSESSEE FILED APPEAL. IT INTER ALIA ARGUED IN T H E LOWER APPELLATE PROCEEDINGS THAT IT HAD FORGOTTEN TO DEDUCT THE SURCHARGE AMOUNT IN QUESTION , BOTH OF ITS PAYEE/DEDUCTEES HAD ALREADY FILED THEIR RESPECTIVE TAX RETURNS AFTER INCLUDING THE IMPUGNED INTEREST I .T.A NO. 2301 /AHD/20 11 A.Y. 2009 - 10 PAGE NO RAJHANS CINE WORLD LTD VS. ITO 3 PAYMENT IN BOOKS OF ACCOUNTS, THE IMPUGNED SHORT FALL WAS AN INSTANCE OF OVER SIGHT AND IT HAD DEDUCTED/PAID THE IMPUGNED TDS AMOUNT. THE CIT(A) IN THE LOWER APPELLATE ORDER TAKES NOTE OF ASSESSING OFFICER S FINDINGS POINTING OUT THE ALLEGED NON - PAYMENT/SHORTFALL IN TDS DEDUCTION AS FOLLOWED BY LATE PAYMENT OF TAXES. HE IS OF THE VIEW THAT THE MERE FACT OF ASSESSEE S PAYEES HAVING INCLUDED THE INTEREST SUMS IN QUESTION IN THEIR BOOKS FOR THE PURPOSE OF ASSESSMENT THEREOF WOULD NOT ABSOLVE THE AS SESSEE FROM DISCHARGING ITS LEGAL OBLIGATION. HE ADOPTS A STICKER VIEW OF SECTION 201(1) OF THE ACT FOR REJECTING ASSESSEE S CORRESPONDING ARGUMENTS . 5. WE HAVE HEARD BOTH SIDES. LD. REPRESENTATIVES APPEARING AT ASSESSEE S AND REVENUE S BEHEST REITERA TING THEIR RESPECTIVE PLEADINGS. THERE IS NO DISPUTE THAT ASSESSEE S INTEREST PAYEES STAND ASSESSED QUA THE IMPUGNED INTEREST PAYMENTS AND THEIR RESPECTIVE RETURNS OF INCOME ALONG WITH THE RELEVANT LEDGER ACCOUNT FORM PART OF THE CASE RECORD. THE CIT(A) DOES NOT REBUT THIS FACTUAL POSITION. THAT BEING THE CASE, WE HOLD THAT THE ASSESSEE IS NOT TO BE DECLARED AS ONE IN D EFAULT AS PER CASE LAW OF HINDU STAN COCA COLA BEVERAGES PVT. LTD VS. CIT 293 ITR 226 (SC) AND M/S. JAGRAN PRAKASHAN LTD VS. DCIT (2012) 21 TAXMANN.COM 489 (ALLAHABAD) . THE REVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS OR LAW. WE ACCEPT ASSESSEE S ARGUMENT IN SUPPORT OF ITS GROUND NO. 01 TO DELETE THE IMPUGNED DEMAND THEREIN. I .T.A NO. 2301 /AHD/20 11 A.Y. 2009 - 10 PAGE NO RAJHANS CINE WORLD LTD VS. ITO 4 6. THIS LEAVES US WITH ASSESSEE S SUBSTANTIVE GROU ND NO. 02. WE FIND THAT THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO CONDUCT FACTUAL VERIFICATION OF ASSESSEE HAVING DEPOSITED THE RELEVANT TDS AMOUNT. LD. AUTHORIZED REPRESENTATIVE FAIRLY PLEADS THAT THE ASSESSING OFFICER MAY CARRY OUT THE NECESSARY VERIFICATION AS PER LAW AS DIRECTED BY TH E LOWER APPELLATE AUTHORITIES. WE FIND NO REASON TO INTERFERE AS THIS SUBST A N T I VE GROUND RENDERED INFRUCTUOUS SINCE THE ASSESSING OFFICER IS YET TO PASS A FINAL ORDER AS PER LAW AFTER CONDUCTING VERIFICATION OF AS SE SSEE S CLAIM. 7. THIS ASSESSEE S APPEAL IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 02 - 0 5 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABA D : DATED 02 /0 5 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,