Dy. Commissioner of Income Tax (TDS0, Kanpur V. Principal Officer, Kanpur Electric Supply Company Ltd., Kanpur

ITA 284/LKW/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92208 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARVIND SHUKLA
• Keywords: Opportunity of being heard
• Section: 201(1); 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.284/LKW/2015 ASSESSMENT YEAR:2008 - 09 PRINCIPAL OFFICER, KANPUR ELECTRIC SUPPLY COMPANY LTD., KESCO HOUSE, 14/7, CIVIL LINES, KANPUR. TAN:KNPK00003D VS DY.C.I.T. (TDS), KANPUR. (RESPONDENT) (APPELLANT) SHRI R. K. RAM, D. R. APPELLANT BY SHRI ARVIND SHUKLA, ADVOCATE RESPONDENT BY 12/06/2015 DATE OF HEARING 07 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2008 - 2009. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. LD. CTT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND AMOUNTING TO RS.5,06,090/ - IGNORING THE FINDING AND DIRECTIONS OF HON'BLE ITAT, LUCKNOW BENCH GIVEN ON PAYMENT OF INTEREST ON CONSUMERS SECURITY PAID/CREDITED ABOVE RS.5000/ - TO THE CONSUMERS OF THE ASSESSEE WHICH ARE NOT COVERED U/S 196 OF I.T. ACT, 1961 AS GIVEN IN ITA NO. 765/LKW/2010 FOR A.Y. 2008 - 09. ITA NO. 145/LKW/2011 FOR A.Y. 2008 - 09, ITA NO.615 TO 618/LKW/2011 FOR A.Y. 2005 - 06 TO 2009 - 10 SETTING ASIDE THE MATTER TO THE F ILE OF ASSESSING OFFICER. 2. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENTIRE ADDITION WITHOUT VERIFYING THE FACT OF ACTUAL PAYMENTS BEING MADE TO ANY EXEMPT GOVERNMENT 2 ORGANIZATION BY THE DEDUCTOR, RELYING AND GIVING A FACT FINDING WITHOUT TAKING INTO CONSIDERATION THE FACTS CONSIDERED BY THE AO WHILE PASSING ORDER U/S 154 OF THE ACT DT. 16/03/2012, THEREBY RESULTING IN DOUBLE BENEFIT TO THE ASSESSEE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT FOR ASSESSMENT YEAR 2005 - 06 TO 2009 - 2010 IN REVENUES APPEAL AS PER ITA NO.615 TO 618/LKW/2011 DATED 24/03/2013, SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL AS PER PARA 4 & 5 OF THE TRIBUNAL ORDER AND THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION AS PER THE DIRECTIONS GIVEN IN PARA 4 OF THE TRIBUNAL ORDER. HE SU BMITTED A COPY OF THIS TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER IN THE ORDER PASSED BY HIM US/ 154 OF THE ACT ON 16/03/2012 THAT ORDER WAS PASSED BY THE ASSESSING OFFICER U/S 201(1)/201 (1A) READ WITH SECTION 194A OF THE ACT ON 16/03/2010 CREATING A TOTAL DEMAND OF RS.1,44,42,120/ - . HE HAS ALSO NOTED THAT AS PER THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR ON 29/10/2010, THE ASSESSING OFFICER WAS DIRECTED TO TAX ON PROVISION/PAYMENT OF INTEREST ON CONSUMER SECURITY IN THE CASES COVERED U/S 196 OF THE ACT AND TO RECOMPUTE THE LIABILITY OF INTEREST U/S 201(1A) OF THE ACT IN VIEW OF THE REVISED COMPUTATION U/S 201(1) OF THE ACT. AGAINST THAT ORDER OF CIT(A) DATED 29/10/2010, CROSS APPEAL W AS FILED BY THE ASSESSEE AND THE REVENUE IN I.T.A. NO.765/LKW/2010 AND 145/LKW/2011 DATED 23/12/2013 AND AS PER THIS TRIBUNAL ORDER, THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION WITH THE FOLLOWING DIRECTIONS AS PER PARA 4 & 5 OF THE TRIBUNAL ORDER, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT REGARDING T HE DEDUCTIBILITY OF TDS FROM INTEREST PAID BY THE ASSESSEE TO UPPCL, IT WAS HELD BY CIT(A) THAT HE PERUSED THE LETTER WRITTEN BY UPPCL DATED 15/10/2010 EXPLAINING THE EXACT NATURE OF LOAN AND ALSO THE ALLOWABILITY OF PAYMENT OF INTEREST TO UP GOVT. SINCE T HE SECURED LOAN IS LOAN FROM UP GOVT. AND THEREFORE, NO TDS IS DEDUCTIBLE ON THE INTEREST PAYABLE TO GOVT. AS PER SECTION 196 OF THE ACT. IN SPITE OF THIS, WE FIND THAT THERE IS NO FINDING GIVEN BY CIT(A) THAT WHETHER SUCH INTEREST WAS PAID BY THE ASSESSE E TO UP STATE GOVT. OR TO UPPCL AND EVEN IF THE ASSESSEE MADE THE PAYMENT TO UPPCL, WHETHER THE EXACT AMOUNT WAS TRANSFERRED BY UPPCL TO UP STATE GOVT. IN OUR CONSIDERED OPINION, THIS FACT IS VERY ESSENTIAL TO DECIDE THIS ISSUE AND HENCE, WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION. WE WOULD LIKE TO MAKE IT CLEAR THAT THE BURDEN IS ON THE ASSESSEE TO BRING EVIDENCE ON RECORD REGARDING THE PARTY TO WHOM PAYMENT OF INTERE ST WAS MADE BY THE ASSESSEE AND AS TO WHETHER THE SAME WAS PAID DIRECTLY TO UP STATE GOVT. OR TO UPPCL. IF THE ASSESSEE CAN ESTABLISH THAT THE INTEREST PAYMENT WAS MADE DIRECTLY TO UP STATE GOVT. THEN OBVIOUSLY THERE IS NO REQUIREMENT OF TDS. IF THE ASSE SSEE HAS MADE THE PAYMENT OF INTEREST TO UPPCL BUT EXACT AMOUNT OF SUCH INTEREST PAYMENT BY THE ASSESSEE TO UPPCL HAS BEEN PAID BY UPPCL TO UP STATE GOVT. THEN ALSO IN THE FACTS OF THE PRESENT CASE, NO TDS IS REQUIRED TO BE DEDUCTED FROM SUCH PAYMENT BECAU SE IT IS THE CLAIM OF THE ASSESSEE AND IT IS STATED BY UPPCL ALSO THAT THIS IS A LOAN FROM UP STATE GOVT. AND UPPCL IS ONLY AN INTERMEDIARY. BUT IF THE ASSESSEE FAILS TO ESTABLISH THIS THAT EXACT AMOUNT OF INTEREST PAID BY THE ASSESSEE TO UPPCL WAS IN TUR N PAID BY UPPCL TO UP STATE GOVT. THEN ASSESSEE WAS REQUIRED TO DEDUCT TDS FROM SUCH INTEREST PAYMENT TO UPPCL. THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. THIS ISSUE IS DECIDED IN THIS MANNER. 5. REGARDING THE SECOND ISSUE, AS TO WHETHER THE ASSESSEE WAS REQUIRED TO DEDUCT TDS OUT OF INTEREST PAYMENT ON CONSUMER SECURITY, WE FIND THAT A CLEAR FINDING IS GIVEN BY CIT(A) THAT SUCH INTEREST PAYMENT DID NOT EXCEED RS.5,000/ - PER PERSON PER YEAR EXCEPT PAYMENT TO GOVT. AND HE HAS HELD THAT NO TDS IS REQUIRED TO BE DEDUCTED IN RESPECT OF PAYMENT MADE TO GOVT. AND IN RESPECT OF PAYMENT TO NON GOVT. ALSO, IF 4 THE AMOUNT PAID PER YEAR PER PERSON DOES NOT EXCEED RS.5,000/ - . THESE FINDINGS OF CIT(A) COULD NOT BE CONTROVERTED BY LEARNED D.R. AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ASPECT. IN THE RESULT, ALL THE FIVE APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. SINCE THE PRESENT APPEAL IS FOR THE SAME ASSESSMENT YEAR FOR WHICH THERE IS ALREADY TRIBUNAL DECISION AVAILABLE, WE FEEL IT PROPER THAT THIS MATTER SHOULD ALSO GO TO ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF THE ORDER PASSED BY THE ASSESSING OFF ICER AS PER DIRECTION GIVEN BY THE TRIBUNAL IN ITS ORDER DATED 23/12/2013, RELEVANT PART OF WHICH HAS BEEN REPRODUCED ABOVE. WE ORDER ACCORDINGLY. WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION. IF I T IS FOUND THAT THE ISSUE IN THE PRESENT APPEAL IS ALREADY TAKEN CARE OF WHILE PASSING CONSEQUENTIAL ORDER AS PER TRIBUNAL DIRECTION , THEN NO FURTHER ORDER IS REQUIRED TO BE PASSED BY THE ASSESSING OFFICER BUT IF IT IS SEEN THAT SOMETHING IS LEFT OUT THEN THE SAME SHOULD BE DECIDED NOW IN THE LIGHT OF THE DIRECTIONS OF THE TRIBUNAL IN ITS ORDER DATED 23/12/2013 AS REPRODUCED ABOVE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07 /07/2015 *C.L.SI NGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR