Lufthansa Cargo AG, New Delhi V. DCIT(TDS), Gurgaon

ITA 2711/DEL/2019

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4277 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-12-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 154; 15; 200A; 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Shri Kul Bharat, Judicial Member & Dr. B. R. R. Kumar, Accountant Member ITA No. 2711/Del/2019 : Asstt. Year: 2013-14 Lufthansa Cargo AG, Present Add: Room No. A-217- 219, Delhi Cargo Service Centre P Ltd., Gate no. 6, Cargo Terminal 2, Cargo Complex, IGI Airport, New Delhi 110037 Earlier at: 12 th Floor DLF Building No. 10, Tower-B, DLF City, Ph-II, Gurgaon, Haryana. Vs The DCIT (TDS), Gurgaon, Haryana (APPELLANT) (RESPONDENT) PAN No. AABCL 6458 R Assessee by : Sh. Sujit Ghosh Adv. Sh. Ajinkya Tiwari, Adv. Revenue by : Sh. Vizay B. Vasanta, Sr. DR Date of Hearing: 07.12.2023 Date of Pronouncement: 17.01.2024 ORDER Per Dr. B. R. R. Kumar:- The present appeal has been filed by assessee against the order of Ld.CIT(A)-1, Gurgoan dated 20.09.2018. 2. The assessee has raised the following grounds of appeal:- 1. F or th at t h e ord er p a s s ed b y t h e l ea rn ed Co mm i s si on er of In c om e Ta x ( Ap p eal s- I) , Gu rg a on , i s b ad i n l a w an d b ad on fa ct s of t h e c as e. 2. F o r th at t h e l ea rn ed C om m is si on er of In com e Ta x ( A pp eal s-I ) , Gu rga on , h a s erred in n ot app recia t in g th at with rega rd t o t h e dem an d ra i s ed on t he a s s es see u / s 20 0A, t h e a ss es see w as eli g ibl e to ap p l y u / s 15 4 of th e Ac t, s o a s t o cl aim th e b en ef it s of t h e ITA No. 2711/Del/2019 Lufthansa Cargo AG 2 Deci si on of H on 'bl e Su p rem e C ou rt i n th e ca s e of Hi nd u st an C oc o Bev erag es Pv t . Lt d . on a cc ou n t of sh ort d ed uc t i on of ta x b y th e Dedu ct i on . 3. For t h at t h e l earn ed C omm i s si on er of I n c om e Ta x ( A pp eal s- I) Gu rga on , h a s g on e wron g b y stat i ng th at th e fi l i ng o f A p pli cat i on u / s 154 of t h e A ct b y t h e Ap p el lan t f or g ett in g t h e reli ef of a Su p r em e Cou rt Ru li ng is n ot an a pp a ren t m i st ak e on record an d th u s th e C P C wa s j u st ifi ed i n rej ect in g t h e ap pl i cat i on u/ s 154 . 4. For t h at t h e l earn ed C omm i s si on er of I n c om e Ta x ( A pp eal s- I) Gu rga on , h as n ot a p preci at ed t h e f ac t t hat n o op po rt u ni t y wa s gi v en to t h e Ap p el lan t an d th e ord er wa s n ot pa ss ed in w ri tin g bu t w as a c omp u t eri zed ord er u / s 154. 5. F o r th at t h e l ea rn ed C om m is si on er of In com e Ta x ( A pp eal s-I ) , Gu rga on , h a s n ot app reciat ed t hat t h e p ro of of d ed u ct ees ha vi ng pai d th e t ax es on t h ei r i n co me c an b e p rod u ced on l y if th e app li ca ti on u / s 1 54 o f t h e In c om e T ax A ct i s a d mi t t ed an d t h e d etai l s wit h reg a rd t o p ro of of f il in g t h e in c om es a re s ou gh t . 6. F or t ha t t h e l earn ed Com m i ssi on er of In com e Ta x ( ap p eal s- i) Gu rga on , h a s n ot a pp reci at ed t h e fi n d i ng of Hon 'b l e S u p rem e C ou rt in th e c ase of Hin d ustan C oc o C ola B ev er ag es ( P) Lt d. v . CI T, 2 93 ITR 226 ( SC) t h at th e p ay er i s n ot li abl e t o p ay th e am ou n t of sh o rt/ n on - d ed u ct i on of t ax u /s 201( 1) i n ca s es wh ere th e pay ee h a s alr ead y in c lu d ed th e rel ev an t i n com e i n hi s t ot al i n c om e and u n l ess th e opp ort un i ty t o p rodu c e t h ese d ocum ent s a re g iv en t o th e as s ess ee, th e b en ef i t of cla im c an n ot b e t ak en b y t h e D ed u ct or. 7. Th a t th e C om m is si on er o f In c om e T ax ( A pp eal s- I) , Gu rgaon , h a s n ot g i v en a n y op p or tu ni ty t o t h e A p p ell an t t o p rodu c e t h e docum en ts in sup p o rt t o t h ei r cl ai m th at th e D edu ct ees had c on si dered th e Rev en u e ( on wh i ch sh ort TDS d edu ct i on is ma d e) in t h ei r t otal in c om e. 8. Th at t h e in t erest i s c on s eq u en t ial an d i s d ep en d ent on th e gr oun d s of a pp eal a s ab o v e. 9. That th e a b ov e g rou nd s of ap p ea l a re mu t ual ly exc l u si v e an d wit h out p rej ud i c e t o ea ch oth er. 3. Brief facts as submitted by the appellant are that the appellant is a Foreign International Airline with its head office in Germany and a controlling branch office in Delhi. The controlling branch office filed a TDS return for the 2nd quarter of FY 2012-13 on 15/10/2012. The return was processed by the ITA No. 2711/Del/2019 Lufthansa Cargo AG 3 CPC vide order dated 09/06/2016 raising a demand of Rs. 48,18,130/- on account of short deduction of TDS and interest on short deduction. The appellant filed an application for rectification of this order u/s 154 before the DCIT, TDS, Gurgaon with a copy to CPC. The relevant part of the application u/s 154 reads as under:- "We are in receipt of an intimation us 200A of Income Tax Act, reference no. IDS/1213/260/D/100019395191 in connection with form 26Q of 2nd quarter for the financial year 2012-13. In response to which we hereby submit as follows:- Th ere i s sh ort d ed u ct i on d eman d of R s . 32 590 17/- is on a c cou nt of TDS d edu ct ed i n c a s e o f M/ s. Ai rli ft (I nd ia) P vt . Ltd ., Da ch s er In di a Pri v at e Li mi t ed , Eas t West F rei gh t Ca rri ers Li m it ed , F reig ht Li n es (I) P. Lt d . , L a F rei gh t l ift P riv at e Ltd , Lea ap Int ern ati onal P vt . Ca r ri ers Li m i t ed , F reig ht Li n es (I) P . Lt d. , La F reig ht Li ft P riv at e L td , Leaa p In t ern ati on al P vt . L td . , M od em Ca rg o Ser vi c es P vt . Ltd . , Sky Ba rg e F reig ht P vt . Lt d. , S kyli ft C a rg o P vt . Li d . , UT W orld wid e ( I nd ia) Pvt . Lt d . and Wi ng s L og i st i c s P vt . Ltd . at a l ow er rat e o n th e a mou n t s whi ch ex c eed ed t h e lim it a m oun t a s p er t h e l ow er ex em p ti on ord er of th e d edu ct ee as t hi s b ei ng a c l er ic al m i st ak e. H ow ev er th e d edu ct ee h av e al read y d ep osi ted t h e In com e Ta x on it s en t i re in c om e an d ha s di s ch a rg ed th ei r In c om e Ta x Lia b ili t y f o r th e fi n an ci al y ea r 2012- 13 , Th ere i s n o l os s t o th e rev enu e s i nc e of ab ov e D edu ct ees h av e di s ch a rg ed th ei r t a x li abi li ty f or th e fi n anci al y ea r 2 012 - 13. C op i es of Low er exemp t i on cert i fi cat es a re en cl o sed . Rel i an c e i s pl a c ed on th e H on orab l e Su pr em e C ou rt ord er i n th e c as e of Hin du stan C oca Col a Bev erag es P L td. V CI T , 29 3 I TR 2 26 ( S C) wh ere H on orab l e C ou rt h el d th a t t h e p ay er i s n ot l i abl e t o pa y th e am oun t of sh o rt/ n o n- d edu ct i on of t ax u/ s 201(1 ) in c a s es wh ere th e pay ee h a s al ready i n clu d ed t h e rel evan t i nc om e- in hi s t ot al i n com e an d pa i d th e t a x. How ev er, th e p oi n t f or c on si d erat io n i s wh et h er it wa s n ec ess a ry t o rai s e t h i s i s su e at t h e fi rst st a ge b y th e Dep a rt m en t i n spi t e of th e sai d ci rc u la r of th e Boa rd . In an y c a s e, w e h op e th at n ow t h e i ssu e i s s et at rest . Th ere a n i nt erest d em a nd of R s . 15, 29 ,109/ - on ab ov e sh ort ded uct i on d eman d wh i ch wi ll al s o g et d el et ed on a cc oun t of al l owin g th e a bo v e sh ort d ed ucti on . In t h e li gh t o f ab ov e w e th u s requ est y ou r g ood s el f to p a s s an o rd er u /s 154 a ft er c ons i deri n g th e ab ov e f act an d d el eti ng th e d em and rai sed . " ITA No. 2711/Del/2019 Lufthansa Cargo AG 4 4. The CPC vide its order dated 11/03/2017 u/s 154 of the IT Act rejected the contention of the assessee and recomputed the demand at Rs. 51,13,630/- In this re-computation, the demand on account of short deduction of TDS remained the same at Rs. 32,89,018/- while the demand on account of interest on short deduction was increased from 15,29,109/- to Rs. 18,24,615/-. 5. The assessee vide written submissions dated 17/09/2018 submitted as under:- "Lu ft h ans a Ca rg o A G is a f oreig n In t ern at i on al a ir lin e wi t h i t s h ead offi c e in Germ an y an d a c ont rol lin g b ran ch offi ce i n D el h i f or i t s op era ti on s in In dia at va ri ou s b ran ch es. Th at t h e c on t rol li n g b ran ch of fi ce h a s b een fi li ng th e TD S r et u rn s c ent ral l y f or a ll it s op era t i on s i n Ind ia an d h a s b een pa yi n g th e ta x es in ti m e an d h a s b een f i lin g t h e TD S ret urn s r eg u la rl y. Lu f th an sa Ca rg o A G f i l ed t h e ID S retu rn f or t he 2n d Qu a rt er ( Fi nan cia l Y ear 201 2-13) on 1 5/10 /20 12 vi d e a ckn owl ed g m en t n o. 0704 620 0020 679 1. Th at an in ti m at i on ws 15 4 of t h e Inc om e t a x A ct , sh owi ng a d eman d of Rs . 54 13,030/ - wa s rai sed on 1 1/ 0 3/ 2 017 On g oin g t h rou g h t h e in t i ma t i on u / s 1 54 , th e s h ort d ed u ct i on dem an d of Rs. 32 ,8 9,0 18/- i s on acc ou n t of TDS d edu ct ed in ca s e of M/ s. A i rl if t ( In d i a) P vt . L td . , D ach s er Ind ia Pr iv at e Li m it ed, E ast W est F reig ht Ca rri ers Li m it ed , F rei gh t Lin es (1) P. Lt d . , La F reig ht Li ft P ri vat e Ltd , Lea ap Int ern a ti on al Pvt . Lt d. , M od ern Ca rg o S erv ic es Pvt . Ltd ., S ky Ba rg e F reig h t P vt . Lt d . , S k yli ft Ca rg o P vt . Lt d ., U T W orld wid e ( In dia ) P vt. Lt d . an d Win g s Log i st i c s Pu t . L td . at a l ow er rat e on t h e a m oun t s wh i ch ex ceed ed t h e li mi t a m ou n t a s p er th e lo w er ex em p t i on ord er of th e d edu ct ee a s t h is b ein g a cl eri cal mi s tak e. H ow ev er t h e d ed uct ees m us t h a v e al r ead y d ep osit ed th e In co m e Tax on i ts ent i re in c om e an d h as d i s ch a rg ed th ei r In c om e Ta x Li abi l i ty for th e fi n an ci a l y ea r 2012- 13 , Th ere is n o l os s t o th e r ev en u e s in c e ab o v e Dedu ct ees h av e di sch a rg ed t h ei r t a x li abi l i ty f or th e f in an ci al y ea r 201 2- 13 . Copi es o f L ow er ex em pt i on c erti fi ca tes a re en cl os ed. W e a re pu rsui ng wi th al l t h e ab ov e pa rt i es t o p rov i d e th e c on fi rm a t ion a s an An n exu re ' A of f orm - 26A . Rel i an c e i s pl a c ed on th e H on orab l e Su pr em e C ou rt ord er i n th e c as e of Hin du stan C oca Col a Bev erag es P L td. V CI T , 29 3 I TR 2 26 ( S C) wh ere H on orab l e C ou rt h el d th a t t h e p ay er i s n ot l i abl e t o pa y th e ITA No. 2711/Del/2019 Lufthansa Cargo AG 5 am oun t of sh o rt/ n o n- d edu ct i on of t ax u/ s 201(1 ) in c a s es wh ere th e pay ee ha s a l read y i n cl ud ed t h e rel eva n t in c om e i n h is t ot al in co m e an d pa i d th e t a x. How ev er, th e p oi n t f or c on si d erat io n i s wh et h er it wa s n ec ess a ry t o rai s e t h i s i s su e at t h e fi rst st a ge b y th e Dep a rt m en t i n spi t e of th e sai d ci rc u la r of th e Boa rd . In an y c a s e, w e h op e th at n ow t h e i ssu e i s s et at rest . Th ere a n i nt erest d em a nd of R s . 18, 24 ,615/ - on ab ov e sh ort ded uct i on d em and whi ch w il l g et d el et ed on a cc ou nt of a l l owin g t h e ab ov e sh ort d edu cti on . W e t h us h u mb l y requ est an d p ray t o y ou r h ono ur t o ki nd l y all ow u s s om e m ore t i m e t o pro vid e t h e d et ail s as p er f orm 26A or p a ss an ord er b y d el et in g th e d em an d or t o i s su e th e i n st ru ct i on t o t h e As s es si n g of fi cer t o d o s o or a s y ou r h on ou r d eem f it i n t h e l igh t of ab ov e ru l in g . " 6. The ld. CIT(A) rejected the contention of the assessee and held that, the demand on account of short deduction of TDS was raised by the CPC vide order u/s 200A dated 09/06/2016. As per the rectification application u/s 154, the assessee had contended that the demand raised by the CPC vide order u/s 200A was not justified in view of the fact that the deductees have already deposited the income tax on its entire income and discharged their income tax liability. The ld. CIT(A) held that, It is not the assessee's case that the documents pertaining to the tax deposits by the deductees were a part of the return filed by the assessee. The ld. CIT(A) held that, in fact in the submissions dated 17/09/2018 filed by the assessee, it was contended that the deductees must have already deducted the income tax on its entire income. In these circumstances, it is apparent that there were no documents on record available with the CPC to arrive at a conclusion that the deductees had paid tax on the entire income. There was therefore no mistake apparent from the record which could have been rectified by the CPC u/s 154 of the IT Act. The ld. CIT(A) relied on the judgment ITA No. 2711/Del/2019 Lufthansa Cargo AG 6 7. in the case of Commissioner Of Income-Tax.vs Keshri Metal Pvt. Ltd. 237 ITR 165 (SC). In this case the Hon'ble Supreme Court held as under:- "Und er t h e p rovi si on s of s ect i on 15 4 th ere h as t o b e a m i st ak e app a ren t from th e rec ord . In oth er w ord s, a l ook a t th e rec ord mu st sh ow th at th ere h a s b een an error an d th at erro r m ay b e rect if i ed. Lea rn ed c oun s el fo r th e Rev en u e ha s n ot b een abl e t o s ati sfy u s t h at it sh ow s an y ap pa ren t err or u p on t h e rec ord . R ef eren c e t o do cu m en t s ou ts id e t h e rec ord an d th e l aw i s i m p erm is s ib l e wh en app l yi ng th e p rovi si on s o f s ect i on 1 54." 8. Heard the arguments of both the parties and perused the material available on record. 9. The assessee had placed reliance on the decision of the Hon'ble Supreme Court in the case of Hindustan Coco Beverages Pvt. Ltd. (Supra). The assessee has contended that the demand raised by the CPC was a mistake apparent from record and the CPC should have rectified the same u/s 154. In a given case where a person has not deducted the TDS and claimed the benefit of the Hon’ble Supreme Court decision in the case of Hindustan Coco Beverage Pvt. Ltd., the fact whether the deductees have already deposited the income tax on its entire income is a matter which requires verification. The Revenue cannot charge the assessee and also collect the same amount from the recipients. Hence in the interest of justice, we remand the matter to the file of the DCIT(TDS) to examine the issue in toto and rectify the demand notice. Further, we also direct that the assessee & DCIT(TDS) shall endeavor to obtain the relevant details to examine the fact of inclusion of the relevant income in the total income of the recipients. The process of rectification u/s. 154 be completed within 180 days from the date of this ITA No. 2711/Del/2019 Lufthansa Cargo AG 7 order, as the matter has not been resolved for the last ten years. 10. In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 17/01/2024. Sd/- Sd/- (Kul Bharat) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 17/01/2024 *NV, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, DELHI