Deputy Commissioner of Income Tax, TDS, Jabalpur V. M/s Simplex Casting Ltd.,

ITA 278/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1090 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2013
• Court: TRIBUNAL
• Department Lawyers: V B SARGOR
• Assessee Lawyers: G N PUROHIT
• Keywords: Additional evidence; Non-deduction of tax; Reasonable cause; TDS
• Section: 143(3); 133A; 40(a)(ia); 201(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 278/JAB/2013 A.Y. : 2008-09 (24Q-4 TH ) DY. CIT, TDS, JABALPUR M/S. SIMPLEX CASTING LTD., BHILAI ( C.G.) VS APPELLANT RESPONDENT TAN NO. : JBPS01058B I.T.A.NO. 279/JAB/2013 A.Y. : 2007-08 DY. CIT, TDS, JABALPUR M/S. COMMERCIAL AUTO CENTRE, 124, NAPIER TOWN, JABALPUR VS APPELLANT RESPONDENT -: 2: - 2 TAN NO. JBPC00371A APPELLANT BY : SHRI V.B.SARGOR, DR RESPONDENT S BY : SHRI G.N.PUROHIT, ADV. DATE OF HEARING : 29 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 29 . 0 5 .201 5 O R D E R PER GARASIA, J.M. THESE TWO APPEALS ARE FILED BY THE REVENUE RELATE T O DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE SEPARA TE ORDERS OF CIT(A), JABALPUR, DATED 20.09.2013 AND 11.10.2013 F OR THE ASSESSMENT YEARS 2008-09 AND 2007-08. I.T.A.NO. 278/JAB/2013 A.Y. 2008-09 (24Q-4 TH ) : 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE : - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN -: 3: - 3 ANNULLING THE ORDER PASSED BY THE ACIT (TDS), JABALPUR, U/S 201(1)/201(1A) FOR WANT OF JURISDICTION WHEN THE AO WAS HOLDING JURISDICTION OVER TAN OF THE ASSESSEE UP TO 07/05/2013. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ANNULLING THE ORDER PASSED BY THE ACIT(TDS), JABALPUR, U/S 201(1)/201(1A) FOR WANT OF JURISDICTION BY IGNORING BINDING PROVISIONS OF SECTION 124(2) AND 124(3) OF THE INCOME-TAX ACT, 1961. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN APPLYING BOARDS INSTRUCTION NO. 5/2013 DATED 8.7.2013, ON THE MATTER ARISING WELL BEFORE THE DATE OF ISSUE OF INSTRUCTION NO. 5/2013. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DEMAND OF RS. 11,40,690/- RAISED U/S 201(1)/201(12A) OF THE INCOME-TAX ACT, 1961. BY -: 4: - 4 THE ASSESSING OFFICER ON THE BASIS OF CHALLANS DEPOSITED BY THE OTHER ASSESSEES NAME. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND IT FILED REGULAR QUARTER LY TDS RETURN AS REQUIRED U/S 200(3) OF THE ACT IN FORM 24 Q: THE ASSESSEE THROUGH ITS AUTHORIZED REPRESENTATIVE MR. L. V. PRASAD REPLIED TO THE ABOVE NOTICE ALONGWITH WRITTE N REPLIES TO THE ALLEGED DEFAULTS ON SEPTEMBER 20,2010, THAT THE AO PROVIDED DETAILS OF ALLEGED SHORT DEDUCTION TO THE ASSESSEE. THE ASSESSEE REPLIED TO THE SAME VIDE ITS LETTER SENT B Y REGISTERED POST ON NOVEMBER 18,2010, THE AO PASSED ORDER U/S 2 01 AND 201(1A) OF THE ACT ON MARCH 25,2011, RAISING A DEMA ND OF RS. 11,40,690/- THAT AS REGARD ALLEGED SHORT D4ED OF RS . 7,84,970/-, THE AO HAS IDENTIFIED THREE CASES OF TH E SAME IN HIS ORDER DATED MARCH, 15,2011, DETAILED BELOW : -: 5: - 5 SR.NO. CHHALLAN NO. BSR NO. CHALLAN DEPOSIT DATE CHALLAN AMOUNT TDS MAPPED AGAINST THIS CHALLAN 1 6 6360202 16.04.2008 3,33,104 3,33,104 2 7 6360202 16.04.2008 4,51,363 4,51363 3 23 6360202 14.07.2007 500 500 TOTAL 7,84,970 7,84,970 4. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) AL LOWED THE APPEAL OBSERVING AS UNDER :- 6. I HAVE CAREFULLY GONE THROUGH THE ORDER APPEALED AGAINST, SUBMISSIONS OF THE APPELLANT AND MATERIAL ON RECORD. IT IS SEEN THAT THE CHALLANS ARE VERIFIABLE FROM OLTAS, THE FACT REMAINS THAT THE TDS HAS BEEN DEPOSITED BY THE APPELLANT AND RELEVANT CHALLANS WERE ALSO FURNISHED. I AM CONVINCED THAT THE DEMAND HAS BEEN RAISED MERELY DUE TO FAULT OF SYSTEM AND IN VIEW OF THE CBDTS INSTRUCTION NO. 5/2013 DATED 08.07.2013, THE DEMAND RAISED AGAINST THE APPELLANT CANNOT BE SUSTAINED. THEREFORE, THE ORDER PASSED U/S 201(1) AND 201(1A) ARE CANCELLED. -: 6: - 6 I.T.A.NO. 279/JAB/2013 : 5. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS JUSTIFIED IN DELETING DEMAND OF RS. 19,38,826/- RAISED U/S 201(1) OF THE INCOME-TAX ACT, 1961, FOR THE SHORT DEDUCTION OF TAX. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS JUSTIFIED IN DELETING DEMAND OF RS. 8,53,083/- RAISED U/S 201(1A) OF THE INCOME-TAX ACT, 1961. FOR INTEREST ON NON PAYMENT OF TAX. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS JUSTIFIED IN ADMITTING FRESH EVIDENCE IN APPELLATE PROCEEDINGS IN VIOLATIO N OF RULE 46A OF INCOME TAX RULES, 1962. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS JUSTIFIED IN HOLDING T HAT THE ASSESSEE DEDUCTOR HAS FULFILLED ITS RESPONSIBIL ITY -: 7: - 7 OF RULE 29C OF THE INCOME TAX RULES, 1962, BY DEPOSITION OF ALLEGED FORMS 15G AND 15H IN OFFICE O F THE CIT, KANPUR, WHO HAVE NOT JURISDICTION OVER THE CASE OF ASSESSEE BY VIRTUE OF CBDT NOTIFICATION NO. 288/2001(F.NO.187/5/2001-ITA -1 DATED 31.7.2001 AND JUDGMENT OF THE SUPREME COURT GIVEN IN THE CASE OF M/S. INDUSTRIAL TRUST LIMITED VS. CIT, 91 I TR 550 (S.C.). 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PARTNERSHIP FIRM DERIVING INCOME FROM BUSINESS OF S ALE AND PURCHASE OF TYRE AND OTHER AUTOMOBILE COMPONENTS AN D RECEIVING OF PUBLIC MONEY AS DEPOSIT UNDER VARIOUS SCHEMES. THE AO HAD PASSED THE ORDER U/S 201(1) AND 201(1A) HOLDING THE ASSESSEE AS ASSESSEE IN DEFAULT FOR SHORT PAY MENT OF TDS AMOUNTING TO RS. 19,38,826/- AND INTEREST THEREON RS. RS. 8,53,083/- TOTALING TO 27,91,909/-. 7. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) A LLOWED THE APPEAL BY OBSERVING AS UNDER :- I HAVE CAREFULLY GONE THROUGH THE ORDER APPEALED AGAINST AND SUBMISSIONS OF THE APPELLANT. -: 8: - 8 THE APPELLANT HAS MADE AN APPLICATION FOR ADMISSION FOLLOWING EVIDENCES AS ADDITIONAL EVIDENCES. COPY OF ACKNOWLEDGEMENT OF LETTER OF DEPOSITING FORM NO.15H/15G IN THE OFFICE OF CIT, KANPUR. LIST OF DEPOSITORS WHO HAVE SUBMITTED FORM NO.15H/15G. LIST OF DEPOSITORS WHERE INTEREST PAID / PROVIDED F OR DURING THE FINANCIAL YEAR IN RESPECT OF EACH DEPOSI TOR IS BELOW RS.5,OOO/-. COPY OF TDS RETURNS FILED WITH THE DETAILS OF TAX DEDUCTED AT SOURCE. COPY OF ASSESSMENT ORDER FOR A.Y. 2007-08 PASSED BY INCOME TAX OFFICER, WARD 2(1), KANPUR. 7. THE APPELLANT HAS STATED THAT HE WAS NOT AFFORD ED SUFFICIENT OPPORTUNITY TO SUBMIT THE AFORESAID DOCUMENTS, I AM OF THE CONSIDERED OPINION THAT THE DOCUMENTS BEING RELIED UPON ARE GOING TO THE ROOT O F THE CASE AND VITAL FOR DISPOSAL OF THE APPEAL AND I AM CONVINCED THAT THE APPELLANT WAS PREVENTED BY REASONABLE CAUSE DUE TO WHICH THE ADDITIONAL EVIDEN CES COULD NOT BE SUBMITTED BEFORE THE A.O DURING THE CO URSE -: 9: - 9 OF PROCEEDINGS U/S 201. HENCE, THE ADDITIONAL EVIDENCES ARE ADMITTED. A. 8. IT IS SEEN THAT THE INSTANT APPEAL PERTAINS TO F .Y 2006-07 AND SURVEY OPERATION U/S 133A WAS CONDUCTED IN THE PREMISES OF THE APPELLANT ON 17 TH SEPTEMBER, 2010. THE PRECISE ALLEGATION OF THE A.O IS THAT DURING THE COURSE OF SURVEY OPERATION, IMPROPERLY/PARTIALLY FILLED UP FORM NO. 15G AND FOR M NO. 15H WERE FOUND AND THAT THE APPELLANT DID NOT H AVE IN HIS POSSESSION ANY EVIDENCE OF HAVING SUBMITTED FORM NO.15G OR FORM NO. 15H WHICH ABSOLVES THE APPELLANT FROM LIABILITY TO MAKE TDS FROM INTEREST ON LOAN BORROWED BY THE APPELLANT. ON THE CONTRARY, TH E APPELLANT HAS CLAIMED TO HAVE SUBMITTED FORM NO.15G AND FORM NO. 15H WHICH ABSOLVED THE APPELLANT FROM LIABILITY TO MAKE TDS FROM INTEREST ON LOAN. THE APPELLANT HAS FURNISHED ACKNOWLEDGED COPY OF LETTER DATED 05 .04.2007 VIDE WHICH APPELLANT HAD SUBMITTED FORM NO. 15G AND FORM NO. 15H BEFORE THE OFFICE OF -: 10: - 10 CIT-I, KANPUR. WITH A VIEW TO VERIFY THE CLAIM OF T HE APPELLANT, THE ENQUIRIES WERE CONDUCTED FROM THE O FFICE OF CIT-I, KANPUR BEING THE JURISDICTIONAL COMMISSIONERATE WHERE APPELLANT IS FILING ITS INCO ME TAX RETURNS REGULARLY. THE CONFIRMATION WAS RECEIVE D FROM THE OFFICE OF CIT-I, KANPUR VIDE LETTER DATED 12 TH OCTOBER, 2012 WITH FOLLOWING REMARKS: 'IN THIS CONNECTION, I HAVE BEEN DIRECTED TO SUBMIT THAT ON PERUSAL OF OFFICE RECORDS, IT IS SEEN THAT M/S COMMERCIAL AUTO CENTRE POST BOX NO.47, NAPIER TOWN, JABALPUR (M.P) HAS SUBMITTED FORM NO. 15G & 15H (IN DUPLICATE) DULY FILLED & SIGNED BY THE PARTIES IN T HIS OFFICE ON 05.04.2007.' 9. THE RESULTS OF THE ENQUIRY MADE IT ABUNDANTLY CL EAR THAT THE APPELLANT DID FURNISH REQUISITE FORMS I.E. FORM NO. 15G & 15H DULY FILLED AND SIGNED BY THE PARTIES . IT CAN BE SAFELY DEDUCED THAT THE CIT-I, KANPUR DID NO T FIND ANY INFIRMITY OR IRREGULARITY IN THE FORMS SUB MITTED AND COMPLIANCE MADE BY THE APPELLANT. IT IS ALSO SE EN -: 11: - 11 THAT THE SCRUTINY ASSESSMENT OF THE APPELLANT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 20.05.2009 BY THE ITO-2( I), KANPUR AND IT IS A MATTER ON RECORD THAT NO DISALLOWANCE WAS MADE U/S 40(A)(IA) ON ACCOUNT OF ALLEGED FAILURE TO DEDUCT TAX AT SOURCE FROM INTERE ST ON LOAN. IT IS SEEN THAT 513 NOS. OF FORM NO.15G & 838 NOS. OF FORM NO.15H WERE SUBMITTED BY THE APPELLANT ON 05.04.2007 WHEREAS THE SURVEY OPERATION TOOK PLACE ON 17TH SEPTEMBER, 2010, HENCE, IT CANNOT BE SAID THAT THE COMPLIANCE WAS MADE BY THE APPELLANT SUBSEQUENT TO SURVEY OPERATION AS AN AFTER THOUGHT. IN MY CONSIDERED VIEW, THE CIT-I, KANPUR AND ITO-2(I), KANPUR HAVE ACCEPTED THE COMPLIANCES MADE BY THE APPELLANT FOR THE SAME FINANCIAL YEAR AND SAME ISSU E. THE REMAND REPORT WAS CALLED FROM THE A.O VIDE LETT ER DATED 12 TH JANUARY, 2012, HOWEVER, THE A.O HAS NOT DISPUTED THAT THERE WAS NO LIABILITY TO MAKE TDS ON INTEREST PAID TO DEPOSITORS AMOUNTING TO RS.17,49,239/- AS THE AMOUNT OF INTEREST PAID/ PROVIDED FOR DURING THE YEAR IN RESPECT OF EACH -: 12: - 12 DEPOSITOR WAS BELOW RS.5,000/-. THE A.O HAS ALSO NO T DISPUTED THAT THERE WAS NO LIABILITY TO MAKE TDS ON INTEREST PAID TO DEPOSITORS AMOUNTING TO RS. 1,68,40,835/- AS THE DEPOSITORS HAD SUBMITTED FORM NO.15G/L5H AS PER PROVISIONS OF SECTION 197A. THE A .O HAS NOT DISPUTED THAT THE APPELLANT HAD DEDUCTED TD S ON INTEREST PAID TO DEPOSITORS AMOUNTING TO RS. 15,02,117/- AND ON INTEREST PAID/PROVIDED FOR TO OT HERS AMOUNTING TO RS. 1,49,55,828/- AND PAID THE SAME TO THE GOVERNMENT WITHIN STIPULATED TIME AND FILED THE TDS RETURNS. 10. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND EVIDENCES ON RECORD, I AM CONVINCED THAT THERE WAS NO FAILURE ON THE PART OF THE APPELLANT T O MAKE TDS U/S 194A AS THE APPELLANT HAD FURNISHED THE REQUISITE FORMS AND DOCUMENTS WELL WITHIN THE STATUTORY TIME LIMIT AND ABSOLVED HIMSELF FROM THE LIABILITY TO MAKE TDS, THE APPELLANT CANNOT BE HELD LIABLE AS ASSESSEE IN DEFAULT AS THERE WAS NO LIABI LITY -: 13: - 13 TO MAKE TDS INASMUCH AS RS. 5,OOO/- IN CERTAIN CASES. THEREFORE, THE DEMAND RAISED AGAINST THE APPELLANT HOLDING IT TO BE ASSESSEE IN DEFAULT CANNOT BE SUSTAINED. THE APPELLANT GETS RELIEF OF RS. 27,91,910/- IN THE RESULT, THE APPEAL IS ALLOWED. 8. WE FIND THAT THE LD. CIT(A), HAS ALLOWED THE APPEAL S IN THE CASES OF BOTH THE ASSESSEES WITHOUT GIVING PROP ER REASONS AND WITHOUT VERIFYING WHETHER THE ASSESSEES WERE LI ABLE FOR TDS AND WHETHER THERE WERE ANY SHORT DEDUCTION OF T AX AT SOURCE AND WHETHER THE ASSESSEES WERE ENTITLED FOR PAYMENT OF INTEREST ON SUCH RATE OF TDS OR NOT. 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUS ED THE MATERIAL AVAILABLE ON RECORD. AFTER HEARING TH E RIVAL SUBMISSIONS AND GOING THROUGH THE ORDERS OF THE TAX AUTHORITIES, WE NOTED THAT THE CASES OF THE ASSESSE ES ARE DULY COVERED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ELI LILLY & CO. (INDIA) (P) LTD. (2 009) 312 ITR -: 14: - 14 225 (SC), WHEREIN, IT HAS BEEN HELD THAT THE PERIOD OF DEFAULT STARTS FROM DATE OF DEDUCTIBILITY OF TAX TILL DATE OF ITS ACTUAL PAYMENT BY THE CONCERNED EMPLOYEE AND ALSO IN THE C ASE OF M/S. HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT (2007) 293 ITR 226 (SC), WHEREIN, IT HAS BEEN HELD THAT WH EN THE TAX HAS BEEN PAID BY THE DEDUCTEE-ASSESSEE, THE TAX COU LD NOT BE RECOVERED ONCE AGAIN FROM THE ASSESSEE. ALL FACTS A RE NOT BORNE OUT FROM THE ASSESSMENT ORDERS AND THE LD. CI T(A) HAS ALSO NOT VERIFIED THE SAME. THEREFORE, IN THE INTER EST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS MATTER BACK TO THE F ILE OF AO WITH THE DIRECTION THAT THE AO SHALL VERIFY WHETHER THE PAYMENT SHOWN IN THE ASSESSMENT ORDERS ARE LIABLE F OR TDS OR NOT. SECONDLY, IF THERE IS ANY SHORT DEDUCTION OF T AX OR NOT AND IF THERE IS ANY SHORT DEDUCTION OF TAX THAN THE REC EIPT AND THE PAYEE HAS PAID THE TAX OR NOT AND THEY HAVE SHOWN I N THE RETURN OF INCOME HAS TO BE VERIFIED FROM THE CONCER NED ASSESSEES. THEREFORE, THIS ALL REQUIRES VERIFICATIO N AT THE END OF AO. WE FOUND BOTH THE AUTHORITIES HAVE FAILED TO DO SO. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY , WE RESTORE BACK THIS ISSUE TO THE FILE OF AO AND THE AO IS DIR ECTED TO -: 15: - 15 VERIFY WHETHER ANY SHORT DEDUCTION OF TAX OR NOT AN D WHETHER THE ASSESSEE IS LIABLE FOR INTEREST OR NOT AND WHET HER THE DEDUCTEE HAS PAID TAX OR NOT. THE ASSESSEE IS DIREC TED TO COOPERATE WITH THE AO AND HE MUST PRODUCE ALL THE R ELEVANT EVIDENCE BEFORE THE AO AND THE AO IS FURTHER DIRECT ED TO VERIFY THE SAME AND DECIDE THE MATTER AFRESH KEEPING IN MI ND THE DECISIONS OF HON'BLE SUPREME COURT IN THE CASE OF C IT VS. ELI LILLY & CO. (INDIA) (P) LTD AND HINDUSTAN COCA COLA BEVERAGE P. LTD. V. CIT (SUPRA). 10. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH MAY, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 29 TH MAY , 2015. CPU* 1126 -: 16: - 16