Gujarat State Electricity Corporation Ltd., Baroda V. The ACIT,TDS Circle, Baroda

ITA 2969/AHD/2011

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0787 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHANAV
• Assessee Lawyers: M K PATEL
• Keywords: Non-deduction of tax; TDS

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NOS. 2969 & 2970/AHD/2011 ( / ASSESSMENT YEARS : 2007-08 & 2008-09) GUJARAT STATE ELECTRICITY CORP. LTD. SARDAR PATEL VIDUYT BHAVAN, RACE COURSE CIRCLE, BARODA - 390007 / VS. ACIT, TDS CIRCLE, BARODA ./ ./ PAN/GIR NO. : AAA CG6 864 F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : M. K. PATEL, A.R. / RESPONDENT BY : O. P. VAISHANAV, CIT DR / DATE OF HEARING 14/03/2019 !'# / DATE OF PRONOUNCEMENT 27 /03/2019 $%/ O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-I, BARODA (CIT(A) IN SHORT), DATED 21.10.2011 ARISING IN THE ASSESSMENT ORDERS D ATED 07.01.2011 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 201(1 )/201(1A) OF THE INCOME TAX ACT, 1961 (THE ACT) IN BOTH CASES CONCER NING A.YS. 2007- 08 AND 2008-09. ITA NOS.2969 & 2970/AHD/2011 [GUJARAT STATE ELECTRICITY VS. ACIT] A.YS. 2007-08 & 2008-09 - 2 - 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND FACTS IN CONFIRMING THE INTEREST OF 337.25 LACS UND ER SECTION 201(1A) OF THE I T ACT FOR THE ALLEGED NON-DEDUCTION OF TAX AT SOURCE ON THE INTEREST ACTUALLY PAID TO BANKS/FINANCIAL INSTITUTIONS BUT C ONSIDERED AS PAID TO GUVNL. 3. WHEN THE MATTER WAS CALLED FOR HEARING THE LD. A R FOR THE ASSESSEE POINTED OUT AT THE OUTSET THAT ASSESSEE HA S CREDITED/PAID INTEREST ON LOAN/BONDS PAYABLE TO A GOVERNMENT COMP ANY M/S. GUJARAT URJA VIKAS NIGAM LTD. (GUVNL). A DISPUTE HAS BEEN RAISED BY THE REVENUE THAT INTEREST PAYABLE TO THE GOVERNMENT COM PANY NOTED ABOVE IS ALSO SUSCEPTIBLE TO INTEREST U/S. 201(1A) FOR DE FAULT COMMITTED IN NOT DEDUCTING TAX DEDUCTED AT SOURCE IN TERMS OF SE C. 194A OF THE ACT. THE LD. AR IN THIS REGARD STRAIGHT AWAY SUBMITTED T HAT THE LENDER TO WHOM THE INTEREST WAS PAYABLE NAMELY GUJARAT URJA V IKAS NIGAM LIMITED (GUVNL) IS A WHOLLY OWNED UNDERTAKING OF GO VERNMENT OF GUJARAT AND100% OF SHARE HOLDING OF GUJARAT URJA VI KAS NIGAM LIMITED (GUVNL) IS HELD BY GOVERNMENT OF GUJARAT AS CERTIFIED BY THE LENDER COMPANY AS PER CONFIRMATION DATED 13.03. 2019 WHICH CERTIFICATE ALBEIT WAS NOT FURNISHED BEFORE THE LOW ER AUTHORITIES. THE LD. AUTHORISED REPRESENTATIVE POINTED THAT THE LEND ER TO WHOM THE INTEREST IS PAYABLE BEING A GOVERNMENT COMPANY, THE ASSESSEE IS EXEMPTED U/S. 194A(3)(III)(F) OF THE ACT FROM ITS O BLIGATION TO DEDUCT TAXES AT SOURCE. THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE FOR THIS PURPOSE REFERRED TO NOTIFICATION S.O. 3489 [NO. 170 (F. NO. ITA NOS.2969 & 2970/AHD/2011 [GUJARAT STATE ELECTRICITY VS. ACIT] A.YS. 2007-08 & 2008-09 - 3 - 12/164/68-ITCC/ITJ0.] DATED 22.10.1970. THE TEXT O F THE NOTIFICATION IS QUOTED HERE UNDER: (I) ANY CORPORATION ESTABLISHED BY A CENTRAL, STAT E OR PROVINCIAL ACT; (II) ANY COMPANY IN WHICH ALL THE SHARES ARE HELD ( WHETHER SINGLY OR TAKEN TOGETHER) BY THE GOVERNMENT OR THE RESERVE BANK OF INDIA OR A CORPORATION OWNED BY THAT BANK; AND (III) ANY UNDERTAKING OR BODY, INCLUDING A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860), FINA NCED WHOLLY BY THE GOVERNMENT. 4. IN VIEW OF THE EXPRESS NOTIFICATION POINTED O UT ON BEHALF OF THE ASSESSEE, THE OBLIGATION TO DEDUCT TAX DEDUCTED AT SOURCE U/S. 194A(III) TOWARDS INTEREST PAYMENTS HAS BEEN OBLITERATED. IN THIS VIEW OF THE MATTER, WE WILL FIND MERIT IN THE CASE OF THE ASSES SEE FOR NON- APPLICATION OF SEC. 201(A) AS THE ASSESSEE CANNOT B E TREATED AS ASSESSEE IN DEFAULT FOR THE PURPOSES OF CHARGING OF INTEREST 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. 6. IN PARITY, APPEAL OF THE ASSESSEE IN ITA NO. 29 70/AHD/2011 IS ALSO ALLOWED FOR THE SAME REASONING. 7. IN THE COMBINED RESULTS BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 27/03/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE THIS ORDER PRONOUNCED IN OPEN COURT ON 27/ 03/2019 ITA NOS.2969 & 2970/AHD/2011 [GUJARAT STATE ELECTRICITY VS. ACIT] A.YS. 2007-08 & 2008-09 - 4 - 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < 1.DATE OF DICTATION ON 15.03.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 25.03.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 26.03.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 26.03.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 27.03.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.03.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER