Deputy Commissioner of Income-tax, V. Bajaj Allianz Insurance Co. Ltd., Pune

ITA 297/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9384 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133A; 194C

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.297 AND 298/PUN/2016 / ASSESSMENT YEARS : 2007-08 AND 2008-09 DY. COMMISSIONER OF I NCOME TAX (TDS), PUNE. . / APPELLANT V/S BAJAJ ALLIANZ INSURANCE CO., LTD., GROUND FLOOR, GE PLAZA, AIRPORT ROAD, PUNE. PAN : AADCA1701E. . / RESPONDENT ASSESSEE BY : SHRI NIKHIL MUTHA REVENUE BY : SHRI AJAY MODI. / ORDER PER ANIL CHATURVEDI, AM : THESE TWO APPEALS FILED BY THE REVENUE U/S 253 OF THE ACT ARE EMANATING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INC OME TAX (A) PUNE 10, DT.23.12.2015 FOR THE ASSESSMENT YEARS 200 7-08 AND 2008-09. 2. BEFORE US, AT THE OUTSET, BOTH THE PARTIES SUBMITTED T HAT THOUGH THE APPEALS FILED BY THE REVENUE ARE FOR TWO DIFFERENT ASSE SSMENT YEARS BUT THE FACTS AND ISSUES INVOLVED IN BOTH THE APPE ALS ARE IDENTICAL EXCEPT FOR THE ASSESSMENT YEAR AND THE AMOUNT S INVOLVED AND THEREFORE THE SUBMISSIONS MADE BY THEM WHILE ARGUING ONE APPEAL WOULD BE EQUALLY APPLICABLE TO THE OTHER APPEAL ALSO AND THUS, / DATE OF HEARING : 29.01.2018 / DATE OF PRONOUNCEMENT: 31.01.2018 2 BOTH THE APPEALS CAN BE HEARD TOGETHER. IN VIEW OF TH E AFORESAID SUBMISSIONS OF BOTH THE PARTIES, WE, FOR THE SAKE OF CONVEN IENCE, PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER BUT HOWEVER, PROCEED WITH NARRATING THE FACTS FOR ASSESSMEN T YEAR 2007- 08. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF LIFE INSURANCE. A SURVEY ACTION U/S 133A OF THE ACT WAS CO NDUCTED IN THE OFFICE PREMISES OF THE ASSESSEE ON 03.01.2008 FOR VERIFICATION OF COMPLIANCE TO THE VARIOUS PROVISIONS OF TDS / TCS. DURING THE COURSE OF SURVEY, IT WAS NOTICED THAT DURING THE YEAR AS SESSEE HAD MADE PAYMENTS AMOUNTING TO RS.1,66,82,034/- TO VARIOUS PA RTIES AS DG SET HIRE CHARGES - AND HAD DEDUCTED TDS AT 2% PLUS APPLICABLE SURCHARGE AND EDUCATION CESS U/S 194C OF THE ACT. A O WAS OF THE VIEW THAT IN VIEW OF THE AMENDMENT TO THE DEFINITION OF R ENT W.E.F. 13.07.2006, ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT 20% PLUS APPLICABLE SURCHARGE AND CESS U/S 194I OF THE ACT. AO A LSO NOTICED THAT ASSESSEE HAD PAID A SUM OF RS.76,00,000/- TO TBWA A NTHEM PVT. LTD., TOWARDS COST OF PRODUCTION OF THREE FILMS AND AS SESSEE HAD DEDUCTED TAX AT 1% PLUS APPLICABLE SURCHARGE AND CESS U /S 194C OF THE ACT. AO WAS OF THE VIEW THAT ASSESSEE OUGHT TO HA VE DEDUCTED TAX U/S 194J OF THE ACT AS THE SERVICES INVOLVED TECHNICAL, MANAGERIAL AN D PROFESSIONAL SERVICES. IT WAS ALSO NOTICED BY HIM THAT ASS ESSEE HAD MADE PAYMENT TO VARIOUS PARTIES TOWARDS AMCS AND OTHE R CHARGES (THE DETAILS OF WHICH ARE LISTED AT PAGE 3 OF THE ORDER). IN RESPECT OF ALL THOSE PAYMENTS, ASSESSEE HAD DEDUCTED TAX U/S 194C O F THE ACT WHEREAS ACCORDING TO AO, ASSESSEE OUGHT TO HAVE DEDUC TED TAX U/S 3 194J OF THE ACT AS THE SERVICES WERE IN THE NATURE OF T ECHNICAL, MANAGERIAL AND PROFESSIONAL. AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE, AO HELD THAT ASSESSEE WAS IN DEFAULT AND T HERE WAS SHORT DEDUCTION OF TAX. HE ACCORDINGLY WORKED OUT THE SHORT DEDUCTION OF TAX OF RS.56,75,161/- AS NON / SHORT DEDUC TION AND INTEREST U/S 201(1A) OF THE ACT OF RS.31,22,147/- AND THUS DETERMINED AN AGGREGATE AMOUNT OF RS.87,39,749/- AS PAYA BLE BY ASSESSEE BY ORDER DT.28.03.2011 PASSED UNDER SEC.201(1A ) OF THE ACT. ON ACCOUNT OF THE AFORESAID SHORT / NON DEDUCTIO N OF TAX, AO INITIATED PENALTY PROCEEDINGS U/S 271C OF THE ACT AND VIDE ORDER DT.24.03.2014 LEVIED PENALTY OF RS.31,36,697/- U/S 271C OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MAT TER BEFORE LD.CIT(A), WHO (IN APPEAL NO.PN/CIT(A)10/ADDL.CIT(TDS)/ 619/14- 15) VIDE ORDER DT.23.12.2015 DECIDED THE ISSUE IN FAVOUR O F THE ASSESSEE BY HOLDING AS UNDER : 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT. IN FACT , IN INSTANT CASE , THE A .O . HAD LEVIED PENALTY U/S 271C OF I . T . ACT FOR VIOLATION OF NON/SHORT DEDUCTION OF TDS UNDER THE PROVISIONS OF SECTION 1941 AND 194J, HOWEVER , T HE APPELLANT HAD DEDUCTED TAX U/S . 194C OF I . T . ACT . THE A.R. OF APPELLANT, DURING THE APPEAL PROCEEDING, HAS BROUGH T TO THE NOTICE THAT ITAT, PUNE, A-BENCH VIDE ORDER DATED 21 . 3 . 2014 HAS DECIDED THE MATTER IN FAVOUR OF APPELLANT ON QU ANTUM I SSUE . WHEREIN I . T.A.T . HAD VIEWED THAT THE APPELLANT HAD CORRECTLY DEDUCTED THE TAX U/S 194C OF I . T. ACT , AGAINST THE C L AIM OF DEPARTMENT U/S 194/ AND 194J OF I . T . ACT. ACCORDINGLY, THERE WAS NO SHORT DEDUCTION . HENCE, CONSIDERING THE ABOVE JUDGMENT . SINCE QUANTUM ISSUE IS DELETED ON MERIT , PENALTY L EVIED FOR SUCH VIOLATION DESERVES TO BE ALSO DELETE D. 4. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL TOWA RDS THE LEVY OF PENALTY U/S 271C OF THE IT ACT, 1961. 2. THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THOUGH THE QUANTUM ISSUE HAS BEEN ALLOWED BY THE ITAT IN FAVOU R OF ASSESSEE, THE DEPARTMENT IS IN APPEAL ON THE ISSUE BEFORE HONBLE HIGH COURT, BOMBAY. 4 3. THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT AS THE QUANTUM ISSUE IN THE CASE IS STILL DISPUTED, THE PENALTY LE VIED U/S 271C OF THE ACT SHOULD NOT BE DELETED. IDENTICAL GROUNDS HAVE BEEN RAISED BY REVENUE IN IT A NO.298/PUN/2016 FOR A.Y. 2008-09. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO. LD.A.R. O N THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE AO AN D LD.CIT(A) AND FURTHER SUBMITTED THAT ON THE QUANTUM ISSUE, ASSE SSEE HAD PREFERRED APPEAL BEFORE HONBLE TRIBUNAL AND THE HONBLE TRIBUNAL OF PUNE BENCH VIDE ORDER DT.21.03.2014 IN ITA NOS.116 & 117/ PN/2013 AND ITA NOS.153 & 154/PN/2013 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND SINCE THE QUANTUM HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE PENALTY U/S 271C ON SUCH QUANTUM DO ES NOT SURVIVE. HE FURTHER SUBMITTED THAT AGAINST THE ORDER O F TRIBUNAL, THE REVENUE PREFERRED APPEAL BEFORE HONBLE BOMBAY HIGH COUR T. HON'BLE HIGH COURT VIDE ORDER DATED 01.08.2017 IN ITA NOS.170 AND 171 OF 2014 HAS DISMISSED THE APPEALS OF REVENUE. HE THEREFOR E SUBMITTED THAT IN VIEW OF THESE FACTS, THE APPEALS OF THE REVENUE NE EDS TO BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT LD.CIT(A) WHILE DELETING THE PENALTY HA S NOTED THAT THE TRIBUNAL VIDE ORDER DT.21.03.2014 HAS DECIDED TH E MATTER IN FAVOUR OF THE ASSESSEE ON QUANTUM ISSUE AND HAD HELD TH AT THE ASSESSEE HAS CORRECTLY DEDUCTED TDS U/S 194C OF THE ACT AS AGAINST THE CLAIM OF THE DEPARTMENT THAT ASSESSEE OUGHT TO HAV E DEDUCT TDS U/S 194I AND 194J OF THE ACT AND THAT THERE WAS NO S HORT DEDUCTION OF TAX. THE AFORESAID FINDING OF LD.CIT(A) HAS NOT BEEN CONT ROVERTED BY REVENUE. WE FURTHER FIND THAT AGAINST THE ORDER OF T RIBUNAL, 5 REVENUE PREFERRED APPEAL BEFORE THE HONBLE BOMBAY HIGH COURT. THE HONBLE BOMBAY HIGH COURT VIDE ORDER DT.01.08.2017 IN ITA NOS.170 AND 171 OF 2014 HAS DISMISSED THE APPEAL OF REVENUE FOR A .Y.2007-08 AND 2008-09. IN SUCH A SITUATION, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS, THE GROUNDS OF THE REVEN UE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.297/PUN/2016 FOR A.Y. 2007-08 IS DISMISSED. 8. AS FAR AS THE GROUNDS RAISED IN APPEAL IN ITA NOS.298/PUN/2016 FOR A.Y. 2008-09 IS CONCERNED, IN VIEW OF THE SUBMISSION OF BOTH THE PARTIES THAT THE FACTS OF THE CAS E IN THE YEARS BEING IDENTICAL TO THE FACTS AND ISSUE OF THE CASE IN ITA NO.297/PUN/2016 FOR A.Y. 2007-08, WE THEREFORE FOR THE R EASONS STATED HEREIN WHILE DISPOSING OF THE APPEAL IN ITA NO.297/P UN/2016 FOR A.Y. 2007-08 AND FOR SIMILAR REASONS, DISMISS THE GROUNDS OF APPEAL OF REVENUE. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 31 ST DAY OF JANUARY, 2018. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 31 ST JANUARY, 2018. YAMINI 6 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6 7. CIT(A) PUNE-10, PUNE. THE PR.CCIT, PUNE. THE CIT(TDS), PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER , / / // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.