Oil & Natural Gas Corporation Ltd., Baroda V. The ACIT.,(TDS), Baroda

ITA 2981/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63303 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 A.YS.2002-03 TO 04-05, 07-08 TO 10-11, 02-03 TO 04- 05, 07-08, 08- 09, 04-05, 06-07 TO 10-11, 02-03 TO 10-11 RESPECTI VELY OIL AND NATURAL GAS CORPORATION LTD., BARODA PAN-AAACO1598A ASSESSEE VS. THE A.C.I.T.(TDS), BARODA RESPONDENT DEPARTMENT BY : SHRI D.P. GUPTA WITH SHRI T. SANKAR, D.RS. ASSESSEE BY : SHRI S.N. SAPORKAR WITH MRS. URVASHI SHODHAN, A.RS. DATE OF HEARING : 14.12.2012 DATE OF PRONOUNCEMENT : 21.12.2012 / ORDER PER BENCH: ALL THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A) OF DIFFERENT DATES. 2. ALL THESE APPEALS BELONG TO THE SAME ASSESSEE IN WHICH FOLLOWING COMMON GROUNDS HAVE BEEN TAKEN:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS AN D CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ORDER PASSED BY ACIT ( TDS), WHEREBY THE APPELLANT WAS HELD TO BE AN ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AT SOURCE FROM THE VALUE OF HOUSING P ERQUISITES OF ITS EMPLOYEES AND WAS CALLED UPON TO PAY THE TAX ALLEGE DLY SHORT I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 2 DEDUCTED FROM ITS EMPLOYEES U/S 201(1) AND INTEREST THEREON U/S 201(1A) OF THE INCOME TAX ACT, 1961. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE DEMAND U/S 201(1) FOR THE TAX ALLEGEDLY SHORT DEDUCTED FROM EMPLOYEES WHICH WAS RAISED BY T HE ACIT (TDS). 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE DEMAND FOR INTEREST U/S 2 01(1A) WHICH WAS RAISED BY THE ACIT (TDS). 4. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE ACIT (TDS) ACTION IN REDU CING THE TIME ALLOWED FOR PAYMENT OF DEMAND. 3. THE FACTS OF ALL THESE APPEALS BEING SAME, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY PASSING THIS CONSOLIDA TED ORDER. 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE DID NO T DEDUCT TAX AT SOURCE ON PERQUISITES OF RENT FREE RESIDENTIAL ACCOMMODATI ON/RESIDENTIAL ACCOMMODATION AT CONCESSIONAL RENT PROVIDED TO ITS EMPLOYEES WHO WERE MEMBERS OF ASSOCIATION OF SCIENTIFIC AND TECHNICAL OFFICERS. THESE EMPLOYEES DID NOT OFFER VALUE OF HOUSING PERQUISITE S IN THEIR RETURN OF INCOME ALSO. ON THE OTHER HAND TAX WAS REGULARLY D EDUCTED AT SOURCE BY ASSESSEE ON PERKS ON RESIDENTIAL ACCOMMODATION IN R ESPECT OF OTHER EMPLOYEES. THE A.O. REFERRING TO HONBLE BOMBAY HI GH COURTS DECISION DATED 15.03.2010 DISMISSING THE WRIT PETITION NO.15 55 OF 1996 FILED BY ASSOCIATION OF SCIENTIFIC AND TECHNICAL OFFICERS OF ONGC LTD. DEEMED ASSESSEE TO BE ASSESSEE IN DEFAULT U/S 201(1) IN RE SPECT OF THE TAX DEDUCTIBLE ON VIOLATION OF PERKS ON RENT FREE RESID ENTIAL ACCOMMODATION/RESIDENTIAL ACCOMMODATION AT CONCESSI ONAL RENT FOR ALL THESE I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 3 YEARS UNDER APPEAL IN RESPECT OF EMPLOYEES WHO WERE MEMBERS OF ASSOCIATION OF SCIENTIFIC AND TECHNICAL OFFICERS. THE A.O. FURTHER HELD THAT SINCE ASSESSEE DID NOT QUANTIFY THE TAX LIABILITY E QUIVALENT TO THE AMOUNT OF TAX WHICH WAS DEDUCTIBLE AND PAYABLE TO THE DEPARTM ENT AND DID NOT REMIT THE SAME TO THE GOVERNMENT ACCOUNT WITHIN THE TIME LIMIT FRAMED BY HONBLE BOMBAY HIGH COURT, INTEREST U/S 201(1A) BEING AUTOM ATIC AND MANDATORY, WAS ALSO LIABLE TO BE BORNE BY THE ASSESSEE. 5. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) AND WHEN NOTICE FOR HEARING WAS RECEIVED ASSESSEE REQUESTED TO KEEP THE APPEALS IN ABEYANCE TILL DISPOSAL OF SLP FILED BY THE ASSESSEE IN THE SUPREME COURT CHALLENGING THE VALIDITY OF ORDERS PASSED BY THE BO MBAY HIGH COURT WHICH WERE THE BASIS FOR A.O. DEEMING ASSESSEE TO BE ASSE SSEE IN DEFAULT. HOWEVER, LD. CIT(A) WAS OF THE VIEW THAT NO USEFUL PURPOSE WILL BE SERVED BY KEEPING THE APPEALS IN ABEYANCE AND HE, AFTER TAKIN G INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL F ILED BY THE ASSESSEE AND CONFIRMED THE ACTION OF THE A.O. 6. FURTHER AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING BOTH THE PARTIES AGREED T HAT THE ISSUE HAS NOW BEEN SETTLED BY HONBLE APEX COURT IN SLP NOS.29855-29856 OF 2010 DATED 7 TH NOVEMBER, 2012 BY HOLDING AS UNDER:- 9. WE HAVE CONSIDERED THE AFORESAID SUBMISSIONS AD VANCED BY THE LEARNED COUNSEL AND WE ARE OF THE VIEW THAT BY THE INTERIM ORDER OF THE HIGH COURT PASSED ON 20 TH FEBRUARY, 1996 IN THE WRIT PETITION, THE ONGC WAS PREVENTED TO DEDUCT THE TAX ON 10% OF THE SALARY AND TO PAY THE SAME TO THE CENTRAL GOVERNMENT. IN THE INTERIM ORDER DATED 20 TH FEBRUARY, 1996, THE HIGH COURT HAD NOT HELD THAT THE ONGC WAS NOT LIABLE TO DEDUCT THE TAX UNDER SEC TION 192(1) OF I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 4 THE ACT. THUS, WHEN THE WRIT PETITION WAS DISMISSE D ON 15 TH MARCH, 2010 BY THE HIGH COURT, THE INTERIM ORDER PASSED BY THE HIGH COURT ON 20 TH FEBRUARY, 1996 HAD TO BE VACATED AND THE PARTIES W ERE REQUIRED TO BE PUT BACK IN THE SAME POSITION AS THE Y WOULD HAVE BEEN BEFORE THE INTERIM ORDER WAS PASSED BY THE HIG H COURT ON 20 TH FEBRUARY, 1996 IN ACCORDANCE WITH PROVISIONS OF SEC TION 144 OF THE CODE OF CIVIL PROCEDURE. THE ARGUMENT OF MR. BAGAR IA, LEARNED SENIOR COUNSEL THAT THE ONGC WAS NOT LIABLE TO DEDU CT TAX UNDER SECTION 192(1) OF THE ACT AND PAY THE SAME TO THE C ENTRAL GOVERNMENT UNDER SECTION 200 OF THE ACT, THEREFORE, HAS NO FORCE. 10. WE ARE ALSO OF THE OPINION THAT DURING THE PERI OD THE INTERIM ORDER OF THE HIGH COURT WAS IN FORCE, I.E. FROM 20 TH FEBRUARY, 1996 TO 15 TH MARCH, 2010, THE ONGC CANNOT BE HELD TO BE IN DEFA ULT UNDER THE PROVISIONS OF THE ACT INASMUCH AS THE ONG C WAS PREVENTED BY THE ORDER OF THE HIGH COURT FROM DEDUC TING THE TAX ON 10% OF THE SALARY OF ITS EMPLOYEES UNDER SECTION 19 2(1) OF THE ACT, AND TO PAY THE SAME TO THE CENTRAL GOVERNMENT UNDER SECTION 200 OF THE ACT. HENCE, DURING THE PERIOD FROM 20 TH FEBRUARY, 1996 TO 15 TH MARCH, 2010, THE ONGC CANNOT BE DEEMED TO BE AN AS SESSEE IN DEFAULT UNDER THE PROVISIONS OF THE ACT. CONSEQ UENTLY, THE PROVISIONS OF SUB-SECTION (1A) OF SECTION 201 OF TH E ACT FOR PAYMENT OF INTEREST BY AN ASSESSEE IN DEFAULT UNDER THE PROVISIONS OF THE ACT WILL NOT BE APPLICABLE TO THE PAYMENTS N OT MADE BY THE ONGC BECAUSE OF THE INTERIM ORDER PASSED BY THE HIG H COURT WHICH WAS IN FORCE FROM 20 TH FEBRUARY, 1996 TO 15 TH MARCH, 2010. 11. AS A MATTER OF FACT, WE FIND THAT IN THE IMPUGN ED ORDER, THE HIGH COURT DIRECTED THE ONGC TO QUANTIFY THE TAX LI ABILITY EQUIVALENT TO THE AMOUNT OF TDS WHICH WAS DEDUCTIBLE AND PAYAB LE TO THE INCOME TAX DEPARTMENT AND REMIT THE SAME TO THE INC OME TAX DEPARTMENT WITHIN THREE MONTHS FROM THE DATE OF THE RECEIPT OF THE COPY OF THE IMPUGNED ORDER. 12. IN THE IMPUGNED ORDER, THE HIGH COURT ALSO OBSE RVED THAT N THE EVENT OF COMPLIANCE OF THE SAID DIRECTION, THE ONGC SHALL NOT BE TREATED AS AN ASSESSEE IN DEFAULT. BY SUBSEQUENT O RDERS, THE HIGH COURT APPEARS TO HAVE EXTENDED THE TIME BY ANOTHER THREE MONTHS FOR COMPLIANCE OF THE SAID DIRECTIONS. WITHIN THE PERIOD OF THREE MONTHS AND WITHIN THE EXTENDED PERIOD OF THREE MONT HS THEREAFTER, HOWEVER, THE ONGC DID NOT COMPLY WITH THE SAID DIRE CTIONS OF THE HIGH COURT. 13. THE CONSEQUENCE WOULD, THEREFORE, BE THAT THE O NGC SHALL BE DEEMED TO BE IN DEFAULT WITH EFFECT FROM 16 TH MARCH, 2010 , SOON AFTER THE WRIT PETITION WAS DISMISSED AND THE INTER IM ORDER WAS VACATED ON 15 TH MARCH, 2010 AND IT IS THUS LIABLE TO PAY INTEREST I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 5 WITH EFFECT FROM 16 TH MARCH, 2010 IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (1A) OF SECTION 201 OF THE ACT AS AN ASSESSEE DEEMED TO BE IN DEFAULT. 14. REGARDING THE SUBMISSION MADE BY MR. ANUPAM LAL DAS, LEARNED COUNSEL, THAT THE ASSESSEE IS ENTITLED TO C LAIM THAT THE VALUE OF THE ACCOMMODATION PROVIDED TO THE ASSESSEE WAS NOT REALLY A CONCESSION AND NO OPPORTUNITY WHATSOEVER WAS GIVEN TO THE ASSESSEE TO ESTABLISH THIS CLAIM BEFORE THE ASS ESSING OFFICER, IN OUR CONSIDERED OPINION, THIS STAND CAN ONLY BE TAKE N BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN HIS OWN AS SESSMENT PROCEEDINGS AND NOT BY THE EMPLOYER. 15. THIS STAND ALSO CANNOT BE TAKEN BY THE ASSOCIAT ION OF SCIENTIFIC & TECHNICAL OFFICERS OF THE ONGC (THE WRIT PETITION ER AND THE PETITIONER IN THE SPECIAL LEAVE PETITIONS) AS THE S AID ASSOCIATION IS NOT AN ASSESSEE UNDER THE ACT. THIS IS BECAUSE THE SCHEME OF THE ACT PROVIDES THAT AFTER THE EMPLOYER DEDUCTS FROM T HE SALARY OF THE EMPLOYEE THE TAX AND PAYS THE SAME TO THE CENTRAL G OVERNMENT, A TAX DEDUCTION CERTIFICATE IS FURNISHED TO THE EMPLO YEE AND IT IS FOR THE EMPLOYEE TO CLAIM BEFORE THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS AND GET A DETERMINATION DONE AND IN CASE HE SUCCEEDS BEFORE THE ASSESSING OFFICER, HE WILL B E ENTITLED TO REFUND OUT OF THE AMOUNT OF TAX DEDUCTED AT SOURCE BY THE EMPLOYER. WE, THEREFORE, LEAVE IT OPEN TO THE EMPL OYEES CONCERNED OF THE ONGC TO MAKE THEIR RESPECTIVE CLAI MS BEFORE THE ASSESSING OFFICER FOR THE DEDUCTION MADE BY THE ONG C ON 10% OF THE SALARY TOWARDS PERQUISITE IN RESPECT OF ANY C ONCESSION GIVEN TO THE ASSESSEE. 16. WITH THE AFORESAID OBSERVATIONS, THESE SPECIAL LEAVE PETITIONS STAND DISPOSED OF. THE RESPONDENT SHALL GRANT TO T HE ONGC TIME UPTO 28 TH FEBRUARY, 2013 TO MAKE THE PAYMENT OF THE TAX ON 1 0% OF THE SALARY AND INTEREST CALCULATED WITH EFFECT F ROM 16 TH MARCH, 2010. 8. RESPECTFULLY FOLLOWING THE SAME, THE ASSESSEE SH ALL BE DEEMED TO BE THE ASSESSEE IN DEFAULT U/S 201(1) WITH EFFECT FROM 16 TH MARCH, 2010. THE ASSESSEE IS THUS LIABLE TO PAY INTEREST WITH EFFECT FROM 16 TH MARCH, 2010 IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION-1A OF SECTION 201 OF THE ACT AS AN ASSESSEE DEEMED TO BE IN DEFAULT. THE A.O. I S DIRECTED TO GRANT TIME I.T.A. NOS.2972 TO 2978, 2980 TO 2984, 3046 TO 3051 AND 3065 TO 3073 OF 2011 6 TO THE ASSESSEE UP TO 28 TH FEBRUARY, 2013 TO MAKE THE PAYMENT OF THE TAX ON 10% OF THE SALARY AND INTEREST CALCULATED WITH E FFECT FROM 16 TH MARCH, 2010. 9. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 21.12.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD