DCIT (TDS), JODHPUR V. Oil India Limited, JODHPUR

ITA 30/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78141 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Section: 133A; 194C

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.30 & 59/JODH/2014 (A.YS. 2008-09 & 2009-10) THE DCIT, VS. OIL INDIA LIMITED, (TDS) JODHPUR. 2A, SARASWATI NAGAR, NEW PALI ROAD, JODHPUR. PAN NO. AAACO2352C (APPELLANT) (RESPONDENT) DEPARTMENT BY : DR. DEEPAK SEHGAL- D.R. ASSESSEE BY : SHRI KISHAN GOYAL . DATE OF HEARING : 05/05/2014. DATE OF PRONOUNCEMENT : 05/05/2014. O R D E R PER N.K.SAINI, A.M THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED A GAINST THE SEPARATE ORDERS DATED 17/10/2013 AND 28/11/2013 OF LD. CIT ( A), JODHPUR FOR THE A.Y. 2008-09 & 2009-10 RESPECTIVELY. THE ISSUE INVOLVED IN THESE APPEALS IS COMMON AND THE APPEALS WERE HEARD TOGETHER SO THESE ARE BE ING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. TH E COMMON GROUNDS HAVE BEEN RAISED IN THESE APPEALS, ARE AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LEARNED CIT(A) WAS CORRECT IN CANCELLING THE PENALT Y U/S 271C FOLLOWING THE DECISION OF HON'BLE ITAT, JODHPUR IN I.T. ACT, 1961 NO. 25/JODH/2012 DATED 31/07/2013 WITHOUT CONSIDERING T HE FACT THAT THE 2 ASSESSEE DEDUCTOR WAS LIABLE TO DEDUCT TDS U/S 194J ON PAYMENT MADE FOR SERVICES RENDERED INVOLVING SERVICE OF SKI LLED MANPOWER AND TO DEDUCT TDS U/S 194I OF I.T. ACT ON RENT PAID FOR HIRING CRANE. 2 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271C OF THE I.T. ACT, 1961 (HEREINAFTER REFERRE D AS THE ACT) ON THE BASIS THAT THE ASSESSEE WAS HELD DEFAULTER U/S 201/201(1A) OF THE ACT VIDE ORDER DATED 21/12/2009 AND THE SAID ORDER WAS UPHELD BY THE LEA RNED CIT(A). THE CONTENTION OF THE ASSESSEE BEFORE THE ASSESSING OFF ICER WAS THAT THE APPEAL AGAINST THE ORDER OF THE LEARNED CIT(A) WAS FILED A ND PENDING BEFORE THE ITAT FOR DISPOSAL. THEREFORE, IT WAS REQUESTED TO KEEP P ENALTY PROCEEDINGS IN ABEYANCE. HOWEVER, THE ASSESSING OFFICER DID NOT AC CEPT THE REQUEST OF THE ASSESSEE AND LEVIED THE PENALTY U/S 271C OF THE ACT FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 3 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LEARNED CIT(A) AND THE SUBMISSIONS AS INCORPORATED IN PARA 5 OF TH E IMPUGNED ORDER FOR THE A.Y. 2008-09 ARE REPRODUCED VERBATIM AS UNDER:- 05- DURING THE COURSE OF THE APPELLATE PROCEEDING, THE APPELLANT FILED WRITTEN SUBMISSION THROUGH AUTHORIZED REPRESENTATIV E. IT WAS SUBMITTED THAT THE AUTHORIZED OFFICER OF INCOME TAX DEPARTMEN T HAD CARRIED OUT A SURVEY AT THE BUSINESS PREMISES OF M/S OIL INDIA LT D., JODHPUR U/S 133A ON 04/3/2009 AND 5/3/2009. THE DCIT (TDS), PASSED IMP UGNED ORDER U/S 201/201(A) ON 21/12/2009 IN WHICH IT HAS BEEN INTER ALIA HELD THAT M/S OIL INDIA LTD. OUGHT TO HAVE DEDUCTED TAX AT SOURCE AT HIGHER RATE U/S 194J AS THE PAYMENTS TO THE CONTRACTORS WERE MADE FOR TECHN ICAL SERVICES RENDERED TO THE COMPANY AS AGAINST THE TAX DEDUCTED AT SOURC E BY M/S OIL INDIA LTD. U/S 194C BY TREATING THE SAME SIMPLE CONTRACT WORK S. THE AUTHORITY 3 PASSING SUCH IMPUGNED ORDER INVOKED SECTION 194I IN RELATION TO CERTAIN PAYMENTS MADE TO TWO PARTIES FOR USE OF THEIR CRANE S. IT WAS FURTHER SUBMITTED THAT THE APPELLANT HAD PREFERRED APPEAL B EFORE CIT(A), WHO BY ORDER DATED 31/10/2011 UPHOLD THE APPLICABILITY OF SECTION 194J AND 194I INSTEAD OF SECTION 194C. HOWEVER, HE DELETED THE DE MAND ON ACCOUNT OF DIFFERENCE OF TDS AMOUNT AS THE DEDUCTEE CONTRACTOR HAS FILED THE RETURN OF TOTAL INCOME AFTER PAYMENT OF DUE TAXES. THIS ORDER OF CIT(A) WAS FURTHER CHALLENGED BEFORE THE HON'BLE ITAT, JODHPUR BENCH, JODHPUR, WHO VIDE THEIR ORDER DATED 31/7/2013 ALLOWED THE QUANTUM APP EAL OF THE APPELLANT COMPANY. THE APPELLANT HAS FURNISHED HE COPY OF SUC H ORDER OF THE HON'BLE ITAT. IT WAS FURTHER SUBMITTED THAT THE JT. CIT (TD S), JODHPUR HAS IMPOSED THE PENALTY U/S 271C VIDE ORDER DATED 07/6/2012 FOR BOTH THE YEARS MERELY ON THE GROUND THAT IN QUANTUM ORDER U/S 201/201(1A) , ACTION OF THE ASSESSING OFFICER WAS CONFIRMED BY THE CIT(A). IT W AS CONTENDED BY THE APPELLANT THAT THE ASSESSING OFFICER HAS NOT RECORD ED ANY REASON SO AS TO ATTRACT THE PENALTY ACTION U/S 271C. IT WAS FURTHER SUBMITTED THAT SINCE THE HON'BLE ITAT, JODHPUR CONFIRMED THAT ASSESSEE COMPA NY HAS CORRECTLY DEDUCTED THE TDS DURING THE YEAR UNDER CONSIDERATIO N AND AS SUCH THE APPELLANT COMPANY CANNOT BE TREATED AS ASSESSEE IN DEFAULT SO AS TO ATTRACT THE PENALTY ACTION U/S 271C. THUS, IT WAS C ONTENDED THAT THE ASSESSING OFFICER IMPUGNED ORDER IMPOSING PENALTY U /S 271C HELD AS INVALID AND BE QUASHED. 4. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE, DELETED THE PENALTIES AND THE RELEVANT FINDINGS HAV E BEEN GIVEN IN PARA 8 OF THE IMPUGNED ORDER DATED 17/10/2013 FOR THE A.Y. 2008-0 9, WHICH READ AS UNDER:- 08- FROM THE ABOVE FINDINGS OF THE HON'BLE ITAT, I T IS CLEAR THAT TAX LIABILITY RAISED IN THE ORDER U/S 201/201(1A) DATED 21/12/2009 HAVE BEEN DELETED AND DECISIONS OF CIT(A) ON THE ISSUES OF NO N DEDUCTION OF TDS AS PER SECTION 194J AND 194I HAVE BEEN REVERSED. AFTER THE DECISION OF 4 HON'BLE ITAT, THE VERY BASIS FOR LEVYING TAX LIABIL ITIES DO NOT EXIST ANYMORE, THEREFORE, PENALTY IMPOSED IN ITSELF BECOME INFRUCT UOUS. THE PENALTY DATED 7/6/2012 PASSED IS HEREBY ANNULLED. THE GROUNDS OF APPEAL ARE ALLOWED. 5. ON THE SIMILAR REASONING, THE PENALTY LEVIED U/S 271C OF THE ACT FOR THE A.Y. 2009-10 WAS ALSO DELETED. NOW THE DEPARTMENT I S IN APPEAL. 6. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE VERY BASIS ON WHICH THE IMPUGNED PENALTIES WERE LEV IED BY THE ASSESSING OFFICER DID NOT REMAIN IN EXISTENCE BECAUSE THE ISSUE HAS B EEN DECIDED BY THE ITAT IN FAVOUR OF THE ASSESSEE WHILE DECIDING THE QUANTUM O F APPEALS IN ITA NO. 24 & 25/JODH/2012 FOR THE A.Y. 2008-09 AND 2009-10 VIDE ORDER DATED 31/7/2013. THEREFORE, THE LEARNED CIT(A) WAS FULLY JUSTIFIED I N DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271C OF THE ACT. 7. IN HIS RIVAL SUBMISSIONS, THE LEARNED D.R. ALTHO UGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ITAT ON APPEAL OF THE ASSESSEE IN ITA NOS. 24 & 25/JODH/2012 FOR THE A.Y. 2008-09 AND 2009-10 VIDE COMMON ORDER DATED 31/7/2013 HAS DELETED THE TAX LIABILITY RAISED BY THE ASSESSING O FFICER U/S 201/201(1A) OF THE ACT, THEREFORE, THE VERY BASIS FOR LEVYING THE TAX LIABILITY DOES NOT EXIST ANYMORE AND AS SUCH THE PENALTY IMPOSED BY THE ASSESSING OF FICER ITSELF BECOMES INFRUCTUOUS. IN THIS REGARD, THE HON'BLE SUPREME CO URT IN THE CASE OF K.C. 5 BUILDERS AND ANOTHER VS. ACIT REPORTED IN (2004) 26 5 ITR 562 , HAS HELD AS UNDER:- WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER O N THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETE D, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AN D, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LI ABLE TO BE CANCELLED. ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. 9. IN THE PRESENT CASE ALSO, WE HAVE ALREADY POINTE D OUT THAT THE VERY BASIS FOR LEVYING TAX LIABILITIES U/S 201/201(1A) OF THE ACT DOES NOT EXIST ANYMORE, THEREFORE, PENALTY U/S 271C OF THE ACT WAS NOT LEVI ABLE AND THE LEARNED CIT(A) WAS FULLY JUSTIFIED IN DELETING THE SAME. IN THAT V IEW OF THE MATTER, WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS GIV EN BY THE LEARNED CIT(A) AND ACCORDINGLY, DO NOT SEE ANY MERIT IN THESE APPEALS OF THE DEPARTMENT. 10 . IN THE RESULT, APPEALS ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 05 TH MAY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05 TH MAY, 2014 RANJAN/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.