M/s. Samsung India Electronics Pvt. Ltd., Gurgaon V. ACIT (TDS), New Delhi

ITA 2496/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2976 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 29-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3); 194C

Judgement Text

1 ITA NO. 2496/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTAN T MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .NO . 2496/DEL/2015 (ASSESSMENT Y EAR-2007-08) SAMSUNG INDIA ELECTRONICS PVT. LTD. 3 RD FLOOR, TOWER-C, VIPUL TECH SQUARE, GOLF COURSE ROAD, SECTOR 43 GURGAON AAACS5123K (APPELLANT) VS ACIT (TDS) CIRCLE-51(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. GAURAV JAIN, ADV & SH. DEEPESH JAIN, CA RESPONDENT BY SH. ATIQ AHMAD, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 24/02/2015 PASSED BY CIT(A)- 41, NEW DELHI FOR ASS ESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN CHARGING INTEREST OF RS. 16,78,676/- UNDER SECTI ON 201(1A) OF THE ACT IN RESPECT OF AMOUNT OF DIFFERENTIAL TAX DEDUCTED AT S OURCE DEPOSITED IN RELATION TO PAYMENTS MADE TO SAMSUNG DATA SYSTEM IN DIA PVT. LTD. (SDSL). 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT SINCE THE DEDUCTEE DID NOT HAVE ANY LIABILITY TO PA Y ADVANCE TAX OR SELF DATE OF HEARING 27.12.2017 DATE OF PRONOUNCEMENT 13.03.2018 2 ITA NO. 2496/DEL/2015 2 ASSESSMENT TAX FOR THE RELEVANT ASSESSMENT YEAR AS THE ACTUAL AMOUNT OF TDS (EXCLUDING TDS DEDUCTED BY THE APPELLANT) EXCEE DED THE TAX PAYABLE BY IT ON ITS TOTAL INCOME, NO INTEREST WAS LEVIABLE UNDER SECTION 201(1A) OF THE ACT. 2.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT PAYMENT OF TAX BY THE DEDUCTEE WOULD NOT ALTER THE LIABILITY T O LEVY INTEREST UNDER SECTION 201(1A) OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR VARY THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 3. A SURVEY WAS CONDUCTED ON THE ASSESSEE ON 15.02. 2011, DURING WHICH IT WAS OBSERVED THAT THE ASSESSEE WAS LIABLE TO DEDUCT TDS U/S 194J (@10%) AND NOT U/S 194C (@2%) ON THE PAYMENTS BEING MADE TO SA MSUNG DATA SYSTEMS PVT. LTD. (SDSL) FOR SERVICES BEING RENDERED BY THE LATTER, AS IN TERMS OF CONTRACT AGREEMENT BETWEEN THE ASSESSEE AND SDSL TH E SERVICES BEING RENDERED BY SDSL TO THE ASSESSEE WERE PROFESSIONAL IN NATURE. THEREAFTER DURING PROCEEDINGS U/S 201/201A OF THE ACT, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT APART FROM SHORT DEDUCTION ON ACCOUNT OF THE FINDINGS DURING SURVEY, THERE WAS ALSO DELAY IN DEPOSIT OF THE TAXE S DUE. HENCE A DEMAND OF RS. 16,78,677/- WAS CREATED U/S 201/201(1A) OF THE ACT VIDE ORDER DATED 25.03.2013. 4. BEING AGGRIEVED BY THE ORDER U/S 201/201(1A), TH E ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THERE WAS NO LOSS TO T HE DEPARTMENT IN AS MUCH AS TAXES DUE FROM THE DEDUCTEE (SDSL) STANDS A LREADY RECOVERED BY THE REVENUE DEPARTMENT, IN ADVANCE, BY WAY OF DEDUCTION OF SUBSTANTIAL TAX AT SOURCE FROM THE INCOME OF THE DEDUCTEE (MUCH MORE T HAN TAX DUE ON INCOME OF THE DEDUCTEE), NO QUESTION OF LEVY OF INTEREST UNDE R SECTION 201(1A) OF THE ACT ARISES AGAINST THE DEDUCTOR ASSESSEE FOR DELAY IN P ART DEDUCTION AND PAYMENT OF TAX ON PAYMENTS MADE TO DEDUCTEE. THE SAID CONTE NTION OF THE ASSESSEE WAS 3 ITA NO. 2496/DEL/2015 3 NOT ACCEPTED BY THE CIT(A) ON THE GROUND THAT SINCE THE SCRUTINY ASSESSMENT IN THE CASE OF SAMSUNG DATA SYSTEM INDIA PVT. LTD. (DE DUCTEE) FOR THE RELEVANT ASSESSMENT YEAR 2011-12 WAS PENDING, THE AFORESAID CLAIM OF THE ASSESSEE QUA SUFFICIENT TAX DEPOSITED IN THE CASE OF DEDUCTEE/RE FUNDS DUE TO THE DEDUCTEE COULD NOT BE ACCEPTED AS ASSESSMENT IN THE CASE OF DEDUCTEE WAS NOT FINALIZED AND ACCORDINGLY REFUNDS DUE TO THE DEDUCTEE WERE NO T ACCEPTED BY THE REVENUE TILL THAT DATE I.E. TILL PASSING OF ORDER BY THE CI T(A). THE LD. AR SUBMITS THAT SINCE THE ASSESSMENT ORDER DATED 23.03.2015 WAS PAS SED UNDER SECTION 143(3) OF THE ACT IN THE CASE OF THE DEDUCTEE (SDSL) WHERE IN RETURNED INCOME AND REFUNDS HAVE DULY BEEN ACCEPTED BY THE REVENUE DEPA RTMENT. THE LD. AR FURTHER SUBMITTED THAT THE SAME COULD NOT BE PLACED ON RECORD BEFORE THE ASSESSING OFFICER AS THE SAME WAS PASSED MUCH AFTER PASSING OF IMPUGNED ORDER BY THE ASSESSING OFFICER. FURTHER, THE AFORES AID ASSESSMENT ORDER IN THE CASE OF DEDUCTEE WAS ALSO NOT AVAILABLE WITH THE AS SESSEE COMPANY AT THE TIME OF CONCLUSION OF THE HEARING BEFORE THE CIT(A)/PASS ING OF ORDER BY THE CIT(A) IN AS MUCH THE ASSESSMENT ORDER IN THE CASE OF DEDUCTE E WAS PASSED ON 23.02.2015 I.E. JUST A DAY PRIOR TO PASSING OF THE IMPUGNED ORDER BY THE CIT(A) (ON 24.02.2015) AND WAS RECEIVED LATER. THEREFORE, THE LD. AR PRAYED THAT THE ADDITIONAL EVIDENCE BE TAKEN ON RECORD AND THE ISSU E BE DECIDED IN LIGHT OF THE ORDER DATED 23.02.2015. THE LD. AR RELIED UPON VARI OUS DECISION OF THE HONBLE HIGH COURTS. 5. THE LD. DR SUBMITTED THAT SINCE THE ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 23.02.2015, THE PRESENT ISSUE BE DECIDED A FRESH BY THE ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ORDER U/S 143(3) WAS PASSED ON 23.02.20 15 BY THE ASSESSING OFFICER WHEREIN THE RETURN OF INCOME OF THE ASSESSE E WAS ACCEPTED. THE SAID ORDER IS PASSED AFTERWARDS AND THEREFORE, THE CIT(A ) WAS NOT HAVING THE BENEFIT OF THE SAID ORDER. IN THE INTEREST OF JUSTICE, WE A RE ADMITTING THE ADDITIONAL 4 ITA NO. 2496/DEL/2015 4 EVIDENCE RELYING UPON THE DECISION OF THE HONBLE D ELHI HIGH COURT IN CASE OF CIT VS. TEXT HUNDRED INDIA PVT. LTD. 239 CTR 263 WH EREIN IT IS HELD THAT RULE 29 PERMITTING THE TRIBUNAL TO ADMIT ADDITIONAL EVID ENCE IS MADE TO ENABLE THE TRIBUNAL TO ADMIT ANY ADDITIONAL EVIDENCE WHICH WOU LD BE NECESSARY TO DO SUBSTANTIAL JUSTICE IN THE MATTER. FURTHER, IT WILL BE APPROPRIATE TO TAKE THE ADDITIONAL EVIDENCE AT THIS JUNCTURE AND DECIDE THE ISSUE ON MERIT. SINCE THE ORDER U/S. 143(3) WAS PASSED ON 23.02.2015 AND THE CIT(A) WAS NOT LOOKED INTO THE SAME WHILE PASSING THE ORDER, THEREFORE, IT WIL L BE APPROPRIATE TO REMAND BACK THIS ISSUE TO THE FILE OF THE CIT(A) FOR TAKIN G COGNIZANCE OF THE ORDER U/S 143(3) WHILE DECIDING THE ISSUE OF CHARGING INTERES T OF RS. 16,78,676/- UNDER SECTION 201(1A) OF THE ACT. THUS, THE ORDER OF THE CIT(A) IS SET ASIDE. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN FULL OPPORTUNITY OF H EARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THEREFORE, THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED. 7. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH, 2018 . SD/- SD/ - (R.K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 13/03/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 2496/DEL/2015 5 DATE 1. DRAFT DICTATED ON 28/12/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 28/12/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .201 8 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 13.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 3 . 03 .201 8 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 2496/DEL/2015 6