The Superintendent Engineer (O & M), Jalandhar V. The Income-tax Officer, Jalandhar

ITA 241/ASR/2011

• Counselvise Citation: 24120914 RSA 2011
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Keywords: Opportunity of being heard; Additional evidence
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.240, 241, 242 & 283(ASR)/2011 & 2013 ASSESSMENT YEARS:2007-08,2008-09, 2010-11 & 2009 -10 PAN :AAACM0666N THE SUPERINTENDENT ENGINEER (O&M) VS. THE INCOME TA X OFFICER, MUNICIPAL CORPORATION, (TDS)-II, JALANDHAR, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.J.S.BHASIN, ADVOCATE RESPONDENT BY:SH. MAHAVIR SINGH, DR DATE OF HEARING: 11/02/2014 DATE OF PRONOUNCEMENT:24/02/2014 ORDER PER BENCH ; THESE FOUR APPEALS OF THE ASSESSEE ARISE FROM FOU R DIFFERENT ORDERS OF THE CIT(A), JALANDHAR, WHICH ARE DATED 25.02.2011 F OR THE ASSESSMENT YEARS 2007-08, 2008-09 & 2010-11 WHEREAS FOR THE ASSESSME NT YEAR 2009-10, THE SAID ORDER IS DATED 28.02.2013. IDENTICAL GROUNDS HAVE BEEN TAKEN EXCEPT THE AMOUNT OF TDS. SINCE THE ISSUE INVOLVED IS IDENTIC AL IN ALL THE APPEALS, 2 THEREFORE, WE PROCEED TO DECIDE ALL THE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST OF ALL, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.240(ASR)/2011 FOR THE ASSESSMENT 2007-08 AND OU R DECISION HEREINBELOW SHALL BE IDENTICALLY APPLICABLE IN ALL THE APPEALS. THE GROUNDS OF APPEAL IN ITA NO.240(ASR)/2011 FOR THE A.Y. 2007-08 ARE REPRO DUCED, WHICH ARE SIMILAR IN OTHER APPEALS, AS UNDER: 1. THAT THE LD. CIT(A) MISDIRECTED HIMSELF IN LAW AND ON FACTS, IN SUSTAINING THE ORDER OF THE ITO HOLDING THE PR AS ASSESSEE IN DEFAULT IN TERMS OF SECTION 201(1) FOR THE ALLEGED SHORT DEDUCTION OF TAX AT SOURCE AMOUNTING TO RS.11,39,91 1/- ON PAYMENTS MADE TO PUNJAB WATER SUPPLY & SEWERAGE BOA RD. 2. THAT THE LD. CIT(A) GROSSLY ERRED IN LAW AND ON FA CTS IN CONFIRMING THAT THE PAYMENT MADE TO PUNJAB WATER S UPPLY & SEWERAGE BOARD. FOR LAYING OF SEWERAGE PIPE LINES, WATER SUPPLY LINES AND TREATMENT OF POLLUTED WATER, WAS I N PURSUANCE OF A CONTRACT AND THEREFORE, LIABLE TO DEDUCTION OF TAX AT SOURCE U/S 194C. 3. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THAT THE PUNJAB WATER SUPPLY & SEWERAGE BOARD. WAS NOT A LO CAL AUTHORITY SO AS TO SAVE THE PR FROM HIS ALLEGED LI ABILITY AS ENVISAGED U/S 201(1). 4. THAT WHEN THE PUNJAB WATER SUPPLY & SEWERAGE BOARD HAD NO INCOME LIABLE TO TAX, WHICH FACT REMAINS UNDISPUTED ON RECORD, THE AUTHORITIES BELOW ERRED IN STILL FASTENING THE APPELLANT WHICH THE IMPUGNED LIABILITY U/S 201(1) & 201(1A). 5. THAT WITHOUT PREJUDICE TO ABOVE, THE APPELLANT COU LD NOT BE SADDLED WITH THE IMPUGNED LIABILITY, IN VIEW OF THE LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF HINDUS TAN 3 COCACOLA BEVERAGE P. LTD VS. CIT 293 ITR 226SC), WH EN THE SAID PUNJAB WATER SUPPLY & SEWERAGE BOARD HAD FILED ITS INCOME TAX RETURN FOR THE YEAR UNDER APPEAL, THROUG H ITS HO AT CHANDIGARH, CLAIMING REFUNDS OF TDS WHEREVER DEDUC TED. 6. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, EV EN THE LEVY OF INTEREST U/S 201(1A) WAS NOT SUSTAINABLE. 7. THAT THE ORDERS OF THE AUTHORITIES BELOW, TO THE EX TENT DISPUTED HEREINABOVE, ARE AGAINST LAW AND FACTS OF THE CASE. 3. THE BRIEF FACTS OF THE CASE AS PER AOS ORDER, WHICH FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UNDER: 4 5 6 7 8 4. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 9 5. THE LD. COUNSEL FOR THE ASSESSEE, SH.J.S.BHASIN, ADVOCATE, AT THE OUTSET SUBMITTED THE ADDITIONAL EVIDENCE UNDER RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, WHICH FOR THE SAK E OF CONVENIENCE IS REPRODUCED HEREUNDER: 10 11 6. THE LD. COUNSEL FOR THE ASSESSEE ARGUED AND PRAY ED TO ADMIT THE ADDITIONAL EVIDENCE FOR THE REASONS MENTIONED IN TH E PETITION FOR FILING THE ADDITIONAL EVIDENCE REPRODUCED HEREINABOVE. 7. THE LD. DR, ON THE OTHER AND, AFTER READING THE PETITION FOR ADDITIONAL EVIDENCE SUBMITTED BY THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ADDITIONAL EVIDENCE CAN BE ACCEPTED AND HE DOES NO T HAVE ANY OBJECTION. 8. AFTER HEARING BOTH THE PARTIES REGARDING ADDITI ONAL EVIDENCE, WE ARE OF THE VIEW THAT THE ASSESSEE HIMSELF HAS SUBMITTED THAT THE PUNJAB WATER SUPPLY & SEWERAGE BOARD ( IN SHORT PWSSB) WAS NOT FILING ANY INCOME TAX RETURN AS NO INCOME TAX WAS APPLICABLE ON A L OCAL AUTHORITY. THIS IS EVIDENT FROM THE ORDER OF THE LD. CIT(A) IN PARA 2. 1 AT PAGE 3. 9. NOW, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED, AS MENTIONED HEREINABOVE IN THE PETITION THAT PWSSB HAS BEEN FIL ING THE RETURN OF INCOME THROUGH ITS HEAD OFFICE, WHICH FACT CAME TO LIGHT A T THE TIME OF FILING THE PRESENT APPEALS BEFORE THE TRIBUNAL. THE LD. COUNSE L FOR THE ASSESSEE ARGUED THAT THE WHEN PAYEE HAS BEEN FILING ITS RETURNS O F INCOME, IT WOULD BRING THE ISSUE WITHIN THE DOMAIN OF HONBLE APEX COURT I N THE CASE OF HINDUSTAN COCACOLA BEVERAGE P. LTD. VS. CIT 293 ITR 226 (SC) THAT IF THE PAYEE HAS PAID THE TAX OR IN PAYEES CASE, THERE WAS NO TAXAB ILITY, THE PAYER CANNOT BE HELD AS AN ASSESSEE IN DEFAULT FOR NON DEDUCTION OF TAX AT SOURCE ON PAYMENTS 12 MADE TO THE PAYEE. THE LD. COUNSEL FOR THE ASSESS EE RELIED UPON THE DECISION OF THE SPECIAL BENCH OF ITAT ( MUMBAI) IN THE CASE OF MAHINDRA & MAHINDRA LTD. VS. DCIT (2009) 122 TTJ (MUM)(SB) 5 77 AND DECISION OF ITAT (SPECIAL BENCH) DELHI, IN THE CASE OF L.G. ELE CTRONICS INDIA (P) LTD. VS. ACIT (2013) 83 DTR (DEL)(SB) (TRIB)1 AND PRAYED TO DECIDE THE ISSUE ACCORDINGLY. 10. AS REGARDS OTHER GROUNDS, THE LD. COUNSEL FOR T HE ASSESSEE DID NOT ARGUE THE MATTER AND THEREFORE, A REASONABLE PRESUM PTION CAN BE DRAWN THAT THE LD. COUNSEL FOR THE ASSESSEE HAS NOTHING TO SAY ABOUT THE FINDINGS OF THE LD. CIT(A) EXCEPT AS SUBMITTED IN THE PETITION FILE D FOR ADDITIONAL EVIDENCE. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE REJECTED EXCEPT, THE PETITION FOR ADDITIONAL EVIDENCE, WHICH IS ACCEPTED UNDER RULE 29 OF INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. THE MATTER IS SET ASIDE TO THE FILE OF THE A.O. FOR THE LIMITED ISSUE WHEN THE PAYEE HAD BEEN FILING ITS RETURNS OF INCOME THEN THE PAYER IF HAS NOT DEDUCTED THE TAX AT SOURCE, WHETHER THE PAYER CAN BE HELD AS AN ASSESSEE IN DEFAULT FOR N ON DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO THE PAYEE. IN VIEW OF T HE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. VS. CIT (SUPRA) AND THE DECISION OF THE SPECIAL BEN CH OF ITAT, MUMBAI, IN THE CASE OF MAHINDRA & MAHINDRA LTD. VS. DCIT (SU PRA), THE AO IS DIRECTED 13 TO EXAMINE THE ISSUE AS DIRECTED HEREINABOVE BUT BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDI NGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S. 11. SINCE THE ISSUE IN ALL THE APPEALS IS IDENTICAL AS IN ASSESSEES APPEAL IN ITA NO.240(ASR)/2011 FOR THE A.Y. 2007-08, THEREFOR E, OUR DECISION HEREINABOVE SHALL BE IDENTICALLY APPLICABLE IN ALL OTHER APPEALS OF THE ASSESSEE BEFORE US I.E. IN ITA NOS. 241, 242 & 283 (ASR)/2011 & 2013 FOR THE ASSESSMENT YEARS 2008-09, 2010-11 & 2009-10 RES PECTIVELY. . ACCORDINGLY, ALL THE APPEALS OF THE ASSESSEE ARE PA RTLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE IN ITA NOS. 240, 241, 242 & 283(ASR)/2011 & 2013 ARE PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE SUPERINTENDING ENGINEER (O&M) MUNI CIPAL CORPORATION, JALANDAR. 2. THE ITO (TDS)-II, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER