Appeal details
Counselvise Citation
248219914 RSA 2014
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 5 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-10-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2008-2009
Appeal Filed On
11-04-2014
Judgement Text
, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- B,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMB ER & SHAKTIJIT DEY,JUDICIAL MEMBER /.ITA NO.S.2482-83/MUM/2014, /ASSESSMENT YEAR-2008-09&09-10 INCOME TAX OFFICER-(TDS)-2(3) ROOM NO.708, 7 TH FLOOR SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD MUMBAI-400 002. VS THE MUMBAI DISTRICT CENTRAL CO- OPERATIVE BANK LTD. 207, D.N. ROAD, FORT MUMBAI-400 001. PAN:AAALM 0042 L ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY :SHRI S. SRIRAM / REVENUE BY :SHRI MAURYA PRATAP / DATE OF HEARING : 06 - 10 -2015 / DATE OF PRONOUNCEMENT :09 -10-2015 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 17.01.2014,OF CIT(A)-13 ,MUMBAI,THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEALS FOR THE ABOVE MENTIONED T WO ASSESSMENT YEARS.(AY.S.). 2. EFFECTIVE GROUND OF APPEAL FOR BOTH THE AY.S.DEAL W ITH PROVISIONS OF SECTION 194 OF THE ACT. ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF PROV IDING BANKING AND OTHER RELATED SERVICES.A SURVEY ACTION U/S.133A OF THE ACT WAS CARRIED OUT A T ITS BUSINESS PREMISES ON 12. 01.2011 AND STATEMENTS ON OATH OF THE MANAGER ACCOUNTS WERE REC ORDED.DURING THE COURSE OF SURVEY,IT WAS OBSERVED THAT THE ASSESSEE HAD ENTERED IN TO AGREEM ENT WITH THREE COMPANIES FOR MAINTENANCE OF UPS SYSTEMS,COMPUTER SYSTEMS AND AMC SUPPORT ETC.,T HAT IT HAD PAID RS.1,00,38,227/- AND RS. 1.50 CRORES RESPECTIVELY FOR THE ABOVE REFERRED TWO AY.S.TO THOSE COMPANIES,THAT IT HAD DEDUCTED TDS @2%.THE ITO TDS ISSUED NOTICES U/S.133(6)OF THE ACT TO THE PARTIES TO WHOM THE ASSESSEE HAD MADE PAYMENTS.AFTER CONSIDERING THEIR REPLY HE HELD THAT THE NATURE OF SERVICES RENDERED BY THE THREE COMPANIES WAS HIGHLY TECHNICAL IN NATURE AND SAME FELL WITHIN THE MEANING OF TECHNICAL SERVICES DEFINED IN EXPLANATION 2 TO SECTION 9(1)(V II)OF THE ACT,THAT THE ASSESSEE HAD TO DEDUCT TAX AS PER THE PROVISIONS OF SECTION 194J OF THE ACT AN D NOT U/S.194 C OF THE ACT.HE REFERRED TO THE ORDER OF ULTRA ENTERTAINMENT SOLUTIONS LTD.(17SOT24 9)AND PASSED AN ORDER ON 31.03.2011 U/S. 201(1)/201(1A) OF THE ACT FOR BOTH THE AY.S.HE HELD THAT THE ASSESSEE HAD COMMITTED A DEFAULT OF SHORT DEDUCTING OF TAX.HE WORKED OUT THE DEFAULT OF RS.7.80 LACS U/S. 201(1) OF THE ACT AND CALCULATED INTEREST U/S. 201(1A) OF THE ACT AT RS.2 ,80,992/-FOR THE PERIOD 1.4.2008 TO MARCH, 2011 FOR THE AY 08-09.FOR THE AY 09-10 THE DEFAULT U/S.201 WAS CALCULATED AT RS.11.69 LACS AND INTEREST WAS CALCULATED AT RS.2,80,646/-FOR THE PER IOD 1.4.2009 TO MARCH, 2011. 3. AGGRIEVED BY THE ORDER OF THE ITO-(TDS),THE ASSESSE E FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM IT WAS ARGUED THAT PAYMENTS MADE BY IT WERE IN THE NATURE OF ROUTINE MAINTENANCE CONTRACT PAYMENT ATTR ACTING TDS @2%.IT RELIED UPON THE CASES OF PARSURAMPURIA SYNTHETICS LTD.(20SOT248),GUJARAT STA TE ELECTRICITY(82TTJ456).AFTER CONSIDER -ING THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER OF THE ITO-TDS,THE(FAA) HELD THAT THE JOB DONE BY THEM OF ROUTINE MAINTENANCE FELL WITHIN THE DEFINITION OF WORK, THAT IT COULD NOT BE ITA/2482-83/MUM/2014-AY.08-09&09-10,BDCCBANK 2 CONSIDERED TECHNICAL SERVICES,THAT JOB DONE BY THE SERVICE PROVIDERS WAS COVERED BY THE PROVISIONS OF SECTION 194C OF THE ACT NOT BY SECTIO N 194J,THAT THE ASSESSEE COULD NOT BE TREATED AN ASSESSEE IN DEFAULT FOR SHORT DEDUCTION.FINALL Y,HE SET ASIDE THE ORDERS OF THE ITO TDS FOR BOTH THE ASSESSMENT YEARS. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE AO.AUTHORISED REPRESENTATIVE(AR) RELIED UPON THE CASE OF PARSURAM PURIA SYNTHETICS LTD.(SUPRA),GUJARAT STATE ELECTRICITY(SUPRA),KANDALA PORT TRUST(50SOT109) AND ARGUED THAT THE SCOPE OF WORK WERE ROUTINE MAINTENANCE SERVICE FOR THE EQUIPMENTS AND MACHINERY USED BY THE ASSESSEE,THAT SUCH PAYMENTS WERE SUBJECT TO TDS U/S.194C OF THE ACT,TH AT THE ASSESSEE CAN CHOOSE THE PROVISION THAT WAS LESS BURDENSOME,THAT IF THE ASSESSEE OPTED FOR SECTION 194C IN PLACE OF 194J OF THE ACT IT COULD NOT BE TREATED AN ASSESSEE IN DEFAULT,THAT THE RECIPIENT OF INCOME HAD PAID TAXES,THAT THE ASSESSEE COULD NOT BE REGARDED AS DEFAULTER,THAT IN SUBSEQUENT YEARS THE AO HIMSELF HAD NOT TREATED IT AS ASSESSEE IN DEFAULT FOR THE SIMILAR P AYMENTS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ISSUE BEFORE US IS VERY SIMPLE I.E.WHETHER THE PAYM ENTS MADE BY THE ASSESSEE TO THREE OR FOUR ENTITIES FOR MAINTENANCE CHARGES ARE COVERED BY THE PROVISIONS OF SECTION 194C OR 194J OF THE ACT.WE FIND THAT THE FAA HAS GIVEN A CATEGORICAL FI NDING OF FACTS THAT THE AGREEMENTS ENTERED IN TO BY THE ASSESSEE CLEARLY PROVE THAT THE PAYMENTS WERE IN THE NATURE OR WORK.SECONDLY,THE ASSESSEE HAD PRODUCE THE EVIDENCES BEFORE THE FAA I NDICATING THAT THE VENDORS HAD INCLUDED THE SUBJECT INCOME IN THEIR TOTAL INCOME AND HAD PAID T AXES THEREON.WE FIND THAT IN THE CASE OF COCA COLA BEVERAGES PVT. LTD.(293ITR226)THE HONBLE APEX COURT HAS HELD AS UNDER: 10. BE THAT AS IT MAY, CIRCULAR NO. 275/201/95-IT( B) DATED JANUARY 29, 1997, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IN OUR CONSIDERED OP INION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES ' NO DEMAND VISUALIZED UNDER SECTION 201(1) OF THE INCOME- TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED TH E OFFICER-IN-CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER, THIS W ILL NOT ALTER THE LIABILITY TO CHARGE INTEREST UNDER SECTION 201(1A) OF THE ACT TILL THE DATE OF P AYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE OR THE LIABILITY FOR PENALTY UNDER SECTION 271C OF THE INC OME-TAX ACT' . IN THE CASE OF ASIAN HEART INSTITUTE & RESEARCH CEN TER PVT.LTD.(ITA/7051/MUM/2012)IT HAS BEEN HELD THAT AMC CONTRACT ARE SUBJECT TO TDS U/S.194 C OF THE ACT AND UNDER SECTION 194J. CONSIDERING THE ABOVE THE ABOVE AND DELIBERATING UP ON THE FACTS AND CIRCUMSTANCES OF THE CASES, WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOE S NOT REQUIRE ANY INTERFERENCE FROM OUR SIDE. SO,CONFIRMING HIS ORDERS WE DECIDE THE EFFECTIVE GR OUNDS OF APPEAL FOR BOTH THE AY.S.AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO FOR BOTH THE AY. S.STAND DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER,2015. 9, ,2015 SD/- SD/- ( / SHAKTIJIT DEY) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 09.10.2015 . . . JV.SR.PS. ITA/2482-83/MUM/2014-AY.08-09&09-10,BDCCBANK 3 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.
