Bharath Electronics Ltd., V. ACIT, Bangalore

ITA 259/BANG/2013

• Counselvise Citation: 25921114 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY JT
• Assessee Lawyers: MRS PRATIBHA R
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.259/BANG/2013 ASSESSMENT YEAR : 2009-10 M/S. BHARAT ELECTRONICS LTD., NAGAVARA, OUTER RING ROAD, BANGALORE 560 045. PAN : AAACB 5985C VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, LTU, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : MRS. PRATIBHA R., ADVOCATE RESPONDENT BY : SHRI L.V. BHASKAR REDDY, JT.CIT(DR) DATE OF HEARING : 29.05.2014 DATE OF PRONOUNCEMENT : 29.05.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 27.12.2012 OF THE CIT(APPEALS), LTU, BANGALORE RELATING TO ASS ESSMENT YEAR 2009-10. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFAC TURE OF PROFESSIONAL GRADE ELECTRONIC EQUIPMENTS AND COMPON ENTS. FOR THE A.Y. 2009-10, THE ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT WAS PASSED BY THE ITA NO.259/BANG/2013 PAGE 2 OF 7 ASSESSING OFFICER. AS AGAINST THE RETURNED INCOME OF RS.1004,29,76,670, THE AO DETERMINED THE TOTAL INCOME OF RS.1011,65,60 ,240 AFTER MAKING CERTAIN ADDITIONS. 3. AGGRIEVED BY THE AFORESAID ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(APPEALS). ONE OF THE GRIEVANC ES PROJECTED BY THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE AO DID NOT GIVE CREDIT FOR TDS TO THE TUNE OF RS.44,19,75,061, BUT GAVE CREDIT ONLY T O THE EXTENT OF RS.41,23,56,165 WHICH WAS THE TAX CREDIT AVAILABLE IN FORM 26AS. THE CIT(A) DECIDED THE AFORESAID ISSUE AS FOLLOWS:- 5. THE APPELLANT, IN GROUND NO.6, HAS RAISED ITS G RIEVANCE ABOUT SHORT CREDIT OF TDS. AGAINST THE CLAIM OF TD S OF RS.44,19,65,061/- THE AO HAD GIVEN CREDIT ONLY TO T HE EXTENT OF RS.41,23,56,165/- AND FAILED TO GIVE CREDIT FOR REM AINING TDS TO THE TUNE OF RS.2,96,18,902/- EVEN THOUGH THE ORIGIN AL TDS CERTIFICATES FOR THE ENTIRE CLAIM OF RS.44,19,75,06 1/- HAD BEEN SUBMITTED. IN TERMS OF THE TDS PROVISIONS APPLICAB LE FOR THIS PERIOD, CREDIT FOR TAX DEDUCTED IN CASE OF THE APPE LLANT IS TO BE GIVEN AS PER ANNUAL TAX STATEMENT IN FORM 26AS AND NOT AS PER PHYSICAL TDS CERTIFICATES. THE AO IS DIRECTED TO V ERIFY THE TAX CREDITS AVAILABLE IN THE SAID FORM 26AS AND ALLOW C REDIT FOR TDS TO THAT EXTENT. THUS, THIS GROUND OF APPEAL IS ALL OWED. 4. THE ASSESSEE HAD ALSO RAISED A GROUND BEFORE THE CIT(A) REGARDING LEVY OF INTEREST U/S. 234D OF THE ACT, WHICH THE CI T(A) HELD TO BE CONSEQUENTIAL. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO.259/BANG/2013 PAGE 3 OF 7 6. FROM A PERUSAL OF THE ORDER OF THE CIT(APPEALS), IT IS APPARENT THAT HE HAS IGNORED THE PHYSICAL TDS CERTIFICATES AND HA S GONE BY THE ANNUAL STATEMENT IN FORM 26AS. ON THE ABOVE ISSUE, THE LE GAL POSITION AS IT PREVAILS TODAY IS AS FOLLOWS. 7. IN COURT OF ITS OWN MOTION VS. CIT 352 ITR 273 (DEL) , THE HONBLE DELHI HIGH COURT TOOK COGNISANCE OF FAULTY PROCESSING OF THE INCOME TAX RETURNS AND TDS DEDUCTED AT SOURCE, CONS EQUENT TO COMPUTERISATION AND CENTRAL PROCESSING OF INCOME TA X RETURNS HIGHLIGHTED IN A LETTER WRITTEN BY FCA, WHICH WAS T REATED AS PIL. ON THE ISSUE OF GIVING PROPER CREDIT FOR TDS, THE COURT FO UND THAT THE SAID PROBLEM CAN BE DIVIDED INTO TWO CATEGORIES; CASES WHERE THE DEDUCTORS FAIL TO UPLOAD THE CORRECT AND TRUE PARTICULARS OF THE TDS, WHICH HAS BEEN DEDUCTED AND PAID AS A RESULT OF WHICH THE ASSESSEE DOES NOT GET CREDIT OF THE TAX PAID, AND THE SECOND SET OF CASES WHERE THE RE IS A MISMATCH BETWEEN THE DETAILS UPLOADED BY THE DEDUCTOR AND TH E DETAILS FURNISHED BY THE ASSESSEE IN THE INCOME TAX RETURN. THE HONBLE COURT OBSERVED ON THE PROBLEMS AS FOLLOWS: AS REGARDS THE FIRST, THE CBDT HAD EARLIER DIRECTE D THAT THE AOS TO ACCEPT THE TDS CLAIMS WITHOUT VERIFICATION WHERE THE DIFFERENCE BETWEEN THE TDS CLAIMED AND THE TDS AS P ER AS26 DID NOT EXCEED RUPEES ONE LAKH. THE RESPONDENTS HAV E NOW REDUCED THIS FIGURE OF RS.1 LAC TO MERE RS.5,000/- . EX-FACIE, THE REASONING THAT THE REDUCTION IS TO CHECK FRAUDULENT CLAIMS BY UNSCRUPULOUS ASSESSES DOES NOT APPEAR TO BE CORRECT AS IN ORDER TO CLAIM CREDIT OF TDS THE FOLLOWING THREE CORE FIELDS MUST MATCH. THESE CORE FIELDS ARE: NAME OF THE ASSESSEE, THE PA N NUMBER AND ITA NO.259/BANG/2013 PAGE 4 OF 7 THE ASSESSMENT YEAR. BENEFIT OF RS.1 LAC OR RS.3 LA CS OR RS.5,000/- IS ONLY WHEN THERE IS A DISCREPANCY IN THE AMOUNT A ND NOT WHEN THERE IS A DISCREPANCY IN ANY OF THE THREE CORE FIE LDS, I.E. NAME OF THE ASSESSEE, THE PAN NUMBER AND THE ASSESSMENT YEA R. THIS BEING A PIL, WE ARE NOT ISSUING A SPECIFIC DIRECTIO N BUT THE BOARD MUST RE- EXAMINE THE SAID ASPECT AND IF THEY FEEL T HAT UNNECESSARY BURDEN OR HARASSMENT WILL BE CAUSED TO THE ASSESSEE S, SUITABLE REMEDIAL STEPS SHOULD BE TAKEN. 8. THEREAFTER THE HONBLE COURT GAVE THE FOLLOWING DIRECTIONS: IN PARA- 41, 42, 49, 50 & 55:- THE RESPONDENTS MUST TAKE REMEDIAL STEPS AND ENSUR E THAT IN SUCH CASES TDS IS NOT REJECTED ON THE GROUND THAT T HE AMOUNTS DO NOT TALLY. OF COURSE, WHILE ISSUING CORRECTIVE STEP S, THE RESPONDENTS CAN ENSURE THAT FRAUDULENT OR DOUBLE CL AIMS FOR TDS ARE NOT MADE. (PARA 41) ANOTHER PROBLEM HIGHLIGHTED RELATES TO THE USE OF A LPHABETS U, M AND P IN FORM 26 AS. THE SAID ALPHABETS STAND FOR UNMATCHED CHALLAN, MATCHED CHALLAN AND PROVISI ONAL BOOKING. IT IS STATED THAT PROVISIONAL BOOKING I S APPLICABLE FOR DDOS, I.E., GOVERNMENT DEDUCTORS AND SHALL BE SHORT LY DISCONTINUED. UNMATCHED CHALLANS RELATE TO CHALLA NS WHERE THE REPORT BY THE DEDUCTOR IN THE TDS STATEMENT ARE NOT FOUND AVAILABLE IN THE OLTAS DATA BASE (OLTAS STANDS FOR ONLINE TAX ACCOUNTING SYSTEM). THE RESPONDENTS WILL FIX A TIME LIMIT WITHIN WHICH THEY SHALL VERIFY AND CORRECT ALL UNMATCHED C HALLANS. THIS WILL NECESSARILY REQUIRE COMMUNICATION WITH THE DED UCTOR AND STEPS TO RECTIFY. THE TIME LIMIT FIXED SHOULD TAKE INTO ACCOUNT THE DUE DATE OF FILING OF THE RETURN AND PROCESSING OF THE RETURN BY THE ASSESSING OFFICER. AN ASSESSEE AS A DEDUCTEE SHOULD NOT SUFFER BECAUSE OF FAULT MADE BY DEDUCTOR OR INABILITY OF T HE REVENUE TO ASK THE DEDUCTOR TO RECTIFY AND CORRECT. ONCE PAYME NT HAS BEEN RECEIVED BY THE REVENUE, CREDIT SHOULD BE GIVEN TO THE ASSESSEE. BOARD WILL ISSUE SUCH SUITABLE DIRECTIONS IN THIS R EGARD. (PARA 42) ITA NO.259/BANG/2013 PAGE 5 OF 7 DENYING BENEFIT OF TDS TO A TAXPAYER BECAUSE OF THE FAULT OF THE DEDUCTOR, WHICH IS NOT ATTRIBUTABLE TO THE DEDUCTEE , CAUSES UNWARRANTED HARASSMENT AND INCONVENIENCE. THE DEDUC TEE FEELS CHEATED. THE REVENUE CANNOT BE A SILENCE SPECTATOR, WASH THEIR HANDS AND PRETEND HELPLESSNESS. IT IS UNFORTUNATE T HAT THE BOARD DID NOT TAKE IMMEDIATE STEPS AFTER EVEN NOTICING LA CUNA AND WAITED TILL FINANCE ACT, 2012, WHEN SECTION 234E WA S ENACTED. MERE WRITING OF A LETTER BY THE ASSESSING OFFICER T O THE DEDUCTOR BY NO STRETCH CAN BE TREATED AS SUFFICIENT ACTION O N THE PART OF THE RESPONDENTS. EVEN THIS, IT APPEARS, WAS DONE IN A F EW CASES AS THE RESPONDENTS IN THE COUNTER AFFIDAVIT HAVE STATED TH AT THEY HAVE WRITTEN 20119 COMMUNICATIONS TO THE TAX DEDUCTORS, WHERE TDS CREDIT CLAIMED BY THE TAXPAYERS DID NOT MATCH WITH THE DETAILS LOADED BY THE DEDUCTORS. THE ACT EMPOWERS AND AUTHO RISES THE ASSESSING OFFICER TO VERIFY THE CONTENTS OF THE RET URN AND NOTICES CAN BE ISSUED TO A THIRD PARTY, I.E. THE DEDUCTOR, TO FURNISH INFORMATION AND DETAILS. THE DEDUCTOR, THE PRINCIPA L OFFICER OR PERSON RESPONSIBLE FOR MAKING DEDUCTION, ONCE ISSUE D NOTICE TO APPEAR, IN MOST CASES, WOULD LIKE TO COMPLY WITH TH E STATUTORY REQUIREMENTS AND ALSO FURNISH DETAILS WITH REGARD T O TDS DEDUCTED FROM THE INCOME OF THE ASSESSEE. THE STATU TORY POWERS GIVEN TO THE ASSESSING OFFICER ARE SUFFICIENT AND S HOULD BE RESORTED TO AND THE ASSESSEE CANNOT BE LEFT TO THE MERCY OR THE SWEET WILL OF THE DEDUCTORS. THEREFORE, WE DIRECT T HAT WHEN AN ASSESSEE APPROACHES THE ASSESSING OFFICER WITH REQU ISITE DETAILS AND PARTICULARS, THE SAID ASSESSING OFFICER WILL VE RIFY WHETHER OR NOT THE DEDUCTOR HAS MADE PAYMENT OF THE TDS AND IF THE PAYMENT HAS BEEN MADE, CREDIT OF THE SAME SHOULD BE GIVEN TO THE ASSESSEE. THESE DETAILS OR THE TDS CERTIFICATE SHOU LD BE STARTING POINT FOR THE ASSESSING OFFICER TO ASCERTAIN AND VE RIFY THE TRUE AND CORRECT POSITION. THE ASSESSING OFFICER WILL BE AT LIBERTY TO GET IN TOUCH WITH THE TDS CIRCLE IN CASE HE REQUIRE S CLARIFICATION OR CONFIRMATION. (PARA 49, 50) EVERY EFFORT AND ATTEMPT MUST BE MADE TO ENSURE THA T THE ASSESSEE SHOULD GET BENEFIT OF THE TDS DEDUCTED BY THE DEDUC TOR AND PAID TO THE GOVERNMENT. IT WOULD BE UNFORTUNATE AND A MATTE R OF REGRET IF AN ASSESSEE DOES NOT GET CREDIT, INSPITE OF PAYMENT OF TAX. (PARA 55) ITA NO.259/BANG/2013 PAGE 6 OF 7 9. INSTRUCTION NO.5/2013 WAS ISSUED BY THE CBDT DAT ED 8.7.2013 PURSUANT TO THE OBSERVATIONS OF THE HONBLE DELHI H IGH COURT IN THE CASE OF COURT ON ITS OWN MOTION ( SUPRA ) REFERRED TO ABOVE. IN PARA-3 OF THE SAID INSTRUCTION, THE CBDT HAS DIRECTED THE ASSESSING OF FICERS WHEN APPROACHED BY THE ASSESSEE WITH REQUISITE DETAILS A ND PARTICULARS IN THE FORM OF TDS CERTIFICATE AS EVIDENCE AGAINST ANY MIS MATCHED AMOUNT. THE ASSESSING OFFICERS HAVE TO VERIFY WHETHER OR NOT TH E DEDUCTOR HAS MADE PAYMENT OF THE TDS IN THE GOVERNMENT ACCOUNT AND IF THE PAYMENT HAS BEEN MADE, CREDIT OF THE SAME SHOULD BE GIVEN TO TH E ASSESSEE. 10. IT WOULD BE APPROPRIATE TO DIRECT THE AO TO CA RRY OUT VERIFICATION AS GIVEN IN THE INSTRUCTION REFERRED TO ABOVE AND GIVE CREDIT FOR TDS WITHOUT RELYING SOLELY ON THE NSDL/AST. THE ISSUE SHOULD B E EXAMINED AFRESH BY THE AO IN THE LIGHT OF THE SUBSEQUENT INSTRUCTION O F CBDT ON THE ISSUE RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE . THE ASSESSEE IS DIRECTED TO MAKE THE NECESSARY APPLICATION BEFORE T HE AO IN THIS REGARD WITH SUPPORTING EVIDENCE, WHICH ACCORDING TO THE AS SESSEE, HAS ALREADY BEEN FURNISHED TO THE AO. THE AO IS DIRECTED TO EX AMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE INSTRUCTION REFERRED T O ABOVE. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH SUCH FURTHER EVIDENCE AS MAY BE NECESSARY OR CALLED FOR BY THE AO. THE ASSESSEE WILL BE GIVEN O PPORTUNITY OF BEING HEARD BEFORE DECIDING THE ISSUE. ITA NO.259/BANG/2013 PAGE 7 OF 7 11. NO ARGUMENTS WERE ADVANCED WITH REGARD TO CHARG ING OF INTEREST U/S. 234D OF THE ACT AND ACCORDINGLY IT IS HELD TO BE CO NSEQUENTIAL. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 29TH DAY OF MAY , 2014 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 29TH MAY , 2014 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.