THE THE CHIEF MUNICIPAL OFFICER, BEMETARA V. THE INCOME TAX OFFICER, TDS, RAIPUR (CG)

ITA 264/BIL/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3208 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 15-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 194C; 201(1)

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 264/RPR/2016 Ǔनधा[रण वष[ / Assessment Year : 2014-15 The Chief Municipal Officer, PO- Than Khamariya, Dist. Bemetara (C.G.) PAN : JBPCO1940B .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer (TDS), Raipur (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri G.N Singh, Sr. DR स ु नवाई कȧ तारȣख / Date of Hearing : 09.06.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 26.07.2022 2 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT (Appeals)-I, Raipur (C.G.), dated 01.03.2016, which in turn arises from the order passed by the ITO (TDS) under Sec. 201(1) & Sec. 201(1A) of the Income Tax Act, 1961 (for short ‘the Act’) dated 07.11.2014 for assessment year 2014-15. Before us the assessee has assailed the impugned order on the following solitary ground of appeal: “That the assessee being local authority paid interest u/s.201(1A) paid interest up to default. Hence, charging of interest u/s.201(1) not justified.” 2. Succinctly stated, TDS verification was carried out in the Office of Chief Municipal Officer, P.O. Than Khamaria, Dist. Durg on 28.04.2014. On perusal of the records, it was therein gathered by the ITO (TDS), viz. (i) that though the assessee had deducted tax at source while making/crediting certain work payments to the contractors, but had failed to deposit the amount of tax at source within the stipulated time period; (ii) that the assessee had failed to deduct tax at source on certain payments made/credited to various contractors. Also, it was noticed by the ITO (TDS) that the assessee during the year under consideration had failed to file its quarterly e-TDS returns in the prescribed Form 26Q within the 3 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 stipulated time period. On the basis of the aforesaid observations, the ITO (TDS) vide his order passed u/s.201(1) & 201(1A) of the Act held the assessee as an ‘assessee-in-default’ qua the aforesaid defaults. 3. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 4. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 5. Controversy involved in the present appeal lies in a narrow compass, i.e., as to whether or not the lower authorities have rightly held the assessee as an ‘assessee-in-default’ qua its failure to comply with the statutory obligation of deducting tax at source on the payments made/credited to the accounts of certain contractors. Before proceeding any further, we may herein observe that as is discernible from impugned order of the CIT(Appeals), controversy before us is narrowed down only qua treating of the assessee as an ‘assessee-in-default’ as regards its failure to deduct tax at source on the payments made to certain contractors. 4 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 6. Confining ourselves to the controversy as emerges from the order of the CIT(Appeals), we herein deal with the same. Controversy involved in the present appeal lies in narrow compass, i.e., as to whether or not, both the lower authorities have rightly concluded that because of the failure on the part of the assessee to deduct tax at source which it was obligated to do u/s.194C of the Act i.e at the time of making/crediting payments to the contractors, it was to be held as an ‘assessee-in-default' u/ss.201(1) & 201(1A) of the Act? Admittedly, the assessee had failed to deduct tax at source on the payments made/credited to certain contractors, i.e, as per the mandate of Section 194C of the Act. As is discernible from the orders of the lower authorities, we find that the assessee had sought not be treated as an ‘assessee-in-default’ for the reasons, viz. (i) that due to unwillingness of the Chief Municipal Officer and other members of staff to be posted at the assessee’s office which was situated in the interiors i.e 110 Kms from District Durg necessary compliances could not be made; (ii) that the office of the assessee at the relevant point of time was not manned with trained staff and (iii) the assessee had insufficient funds to deposit the amount of tax. We find that the CIT(Appeals) holding no infirmity in treating of the assessee as an ‘assessee-in- default’ by the ITO (TDS), Raipur (C.G.) had upheld his order by observing as under: “2.3 Appellant has been held as assessee in default in respect of Rs.64,044/- which was the amount of short deduction of TDS. Appellant has 5 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 pleased short availability of funds as reason for not able to deposit tax. This reason is not acceptable on facts. It is not that the payment of tax is required to be made out of its own pocket/funds. The appellant was required to make TDS out of the payments made to various persons as mentioned in the order and that amount of TDS was to be paid to the government. It has failed to do so, and the failure is not due to shortage of funds. Therefore, the tax in respect of which the appellant is in default is sustained and grounds are rejected.” 7. After having given a thoughtful consideration to the issue before us, we find no infirmity in the view taken by the CIT(Appeals) who had rightly concluded that the failure on the part of the assessee to deduct tax at source u/s.194C of the Act on the payments made/credited to certain contractors, had rendered it liable for being treated as an ‘assessee-in-default’ u/s.201(1) & u/s. 201(1A) of the Act. At this stage, we may herein observe, that as the liability to deduct tax at source is in the nature of vicarious liability, therefore, failure on the part of the assessee to deduct tax at source on the aforementioned amounts which it was obligated to do as per mandate of law, had, therein, rendered it liable to meet out the same u/s.201(1) of the Act a/w. the corresponding interest liability u/s.201(1A) of the Act. On the basis of our aforesaid observations, we, herein, uphold the order of the CIT(Appeals) who had rightly concurred with the view taken by the A.O in treating the assessee as an ‘assessee-in-default’. Thus, the solitary ground of appeal raised by the assessee is dismissed in terms of our aforesaid observations. 6 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 8. In the result, appeal of the assessee is dismissed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- RATHOD KAMLESH JAYANTBHAI RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 26 th July, 2022 SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-I, Raipur (C.G) 4. The Pr. CIT-1,Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 7 The Chief Municipal Officer Vs. ITO (TDS) ITA No. 264/RPR/2016 Date 1 Draft dictated on 20.06.2022 Sr.PS/PS 2 Draft placed before author 20.06.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order