ITO(TDS), Cuttack V. The Branch anager, Life Insurance Corporation of India,

ITA 277/CTK/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4259 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 03-12-2009
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: SUNAKAR MOHANTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE HONBLE SHRI D.K.TYAGI, JUDICIAL MEMBER. /AND HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER . / I.TA.NO . 277/CTK/2009 / ASSESSMENT YEAR 2001 - 02 INCOME - TAX OFFICER (TDS), CUTTACK - - - VERSUS - . THE BRANCH MANAGER, LIFE INSURANCE CORPORATION OF INDIA, KENDRAPARA BRANCH, KENDRAPARA . / A PPELLANT RESPONDENT FOR THE APPELLANT : SHRI S.C.MOHANTY, AR FOR THE RESPONDENT : SHRI SUNAKAR MOHANTY, DR / ORDER SHRI K.K.GUPTA, ACCOU NTANT MEMBER . THE REVENUE IS IN APPEAL RAISING A SOLITARY ISSUE, WHICH READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEAL) HAD ERRED IN HOLDING THAT THE PROCEEDINGS U/S.201(1) IS BARRED BY LIMITATION AS PRESCRIBED U/S.149 IN VIEW OF THE HONBLE ITAT, SPECIAL BENCH) MUMBAIS ORDER IN THE CASE OF MAHINDRA & MAHINDRA LIMITED VS. DCIT, TDS, RANGEL(1) IN ITA NO. 2606, 2607, 2613, 2614/MUM/2000 DATED 9.04.2009. BUT IN THE CASE OF HINDUSTAN TIMES LIMITED VS. UNION OF INDIA 1(1998 ) (SC2) - G.IX - 0005 - SCJ THE APEX COURT RULED THAT WHEN NO PROVISION FOR LIMITATION HAS BEEN INCORPORATED IN THE STATUTE THEN THE COURTS CANNOT INTRODUCE SUCH LIMITATION. THE HONBLE APEX COURT IN BOMBAY GAS COMPANY LTD. VS. GOPAL BHIVA & ORS. (1963) (SC2) - GJ X - 0154 - SC] WITH THE SAME PROPOSITION HELD THAT IT WAS NOT PERMISSIBLE FOR HE COURTS TO INTRODUCE ANY SUCH TIME LIMIT. THE LIMITATION IS BEING ENFORCED BY FINANCE ACT, 2009 W.E.F.1 .4.2010 . 2. THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S.201(1) AND 20 (1A) BY HOLDING THAT DUE TO THE CONSEQUENTIAL ORDER OF THE APPELLATE AUTHORITIES , THE ASSESSEE HAD SHORT DEDUCTED TDS ON ACCOUNT OF CONVEYANCE ALLOWANCE AND ADDITIONAL CONVEYANCE ALLOWANCE PAID TO THE EMPLOYEES WHO WERE NOT BEING WHOLLY SUBJECTED TO TDS IN I.TA.NO .277/CTK/20 09 2 VIEW OF THE POLICY OF THE EMPLOYER. VIDE HIS LETTER DT.17.7.2008 HE SOUGHT TO COMPUTE INTEREST ON THE PORTION OF SHORT DEDUCTION FOR EIGHTY EIGHT MONTHS AS RS.1,12,602 AND RAISED THE DEMAND. 3. AGGRIEVED, THE ASSESSEE APPEARED BEFORE THE FIRST APPELLATE AUTHORITY INDICATING THAT THE EXPENSES BORNE BY THE EMPLOYER NAMELY LIC WAS A REIMBURSEMENT TO ITS DEVELOPMENT OFFICERS UNDER THE REIMBURSEMENT OF INVESTMENT SCHEME 1997 WAS TO BE TREATED AS PART OF THE SALARY ALONG WITH OTHER EMOLUMENTS PAID AND THE TDS W AS DEDUCTED. THIS WAS LATER ON HELD BY THE APPELLATE AUTHORITIES THAT SUCH DEDUCTION TO THE SAME EMPLOYEE WAS THEREFORE LEGITIMATE. HOWEVER, THE MATTER REMAINED STAYED FOR NINE YEARS TILL SUCH ORDER THEREFORE WAS TO BE CONSIDERED IN THE LIGHT OF THE LIMITA TION PRESCRIBED U/S.149 OF THE INCOME - TAX ACT,1961 IN VIEW OF THE ITAT,SPECIAL BENCHS DECISION IN THE CASE OF MAHINDRA & MAHINDA LIMITED V. DCIT,TDS RANGE 1(1) IN ITA NO.2606,2607,2613, 2614/MUM/2000 DT.9.4.2009. THE LEARNED CIT(A) CONSIDERED THE SAID PRO VISIONS AND HELD THAT THE AMOUNT INVOLVED EXCEEDS RS.1 LAKH AND AS PER THE DECISION OF ITAT IN THIS CASE WAS SIX YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INTEREST WAS DEBITED AND THEREFORE BECOMES INEFFECTIVE SO FAR AS THE ASSESSING OFFICER HAS PASSED THE ORDER ON 17.7.2008. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED DR HAS NOT BROUGHT ON ANY CONTRADICTING MATERIAL TO THE CASE LAWS CITED AND RELIED UPON BY THE LEARNED CIT(A) IN THIS CASE AND FACTUALLY THE ASSESSEE WAS SUBJECTED TO CHARGE OF INTEREST AS IS PRESCRIBED UNDER THE PROVISIONS OF THE ACT THEREFORE, OUGHT NOT TO HAVE BEEN PROCEEDED ON THE BASIS OF LATE ADJUDICATION BY THE APPELLATE AUTHORITIES. FINDING NO MERIT IN THE APPEAL OF THE DE PARTMENT, IT IS BOUND TO BE DISMISSED AS THE LEARNED DR HAS RELIED ON THE DECISION OF HONBLE ORISSA HIGH COURT WHICH JUSTIFIED INCLUSION OF ADDITIONAL CONVEYANCE AS PART OF THE SALARY AND NOT DISPUTED. THE CASE LAWS CITED BY THE LEARNED COUNSEL BEFORE THE LEARNED CIT(A) HAVE A DIRECT BEARING ON THE ISSUE OF LEVY OF INTEREST UNDER LIMITATION SUBSEQUENT TO SUCH DECISION, THEREFORE HAS BEEN APPROPRIATELY CONSIDERED BY THE LEARNED CIT(A). I.TA.NO .277/CTK/20 09 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 23.07.2010 SD/ - SD/ - ( ), D.K.TYAGI JUDICIAL MEMBER (K.K.GUPTA), ACCOUNTANT MEMBER. DATE: 23.07.2010 - COPY OF THE ORDER FORWARDED TO : / THE APPELLANT : INCOME - TAX OFFICER (TDS), CUTTACK / THE RESPONDENT : THE BRANCH MANAGER, LIFE INSURANCE CORPORATION OF INDIA, KENDRAPARA BRANCH, KENDRAPARA. THE CIT, THE CIT(A), DR, CUTTACK BENCH GUARD FILE TRUE COPY , BY ORDER , [ ] SENIOR PRIVATE SECRETARY ( /) H.K.PADHEE SENIOR.PRIVATE SECRETARY.