M/s. Central Silk Board, Bangalore V. Income Tax Officer, TDS Ward- 1(2), Bangalore

ITA 317/BANG/2020

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0111 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TSHERING ONGELA CIT BENGALURU
• Keywords: TDS
• Section: 201(1); 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO S . 3 1 7 TO 320 /BANG/20 20 ASSESSMENT YEARS : 2011-12 TO 2014-15 CENTRAL SILK BOARD, CSB COMPLEX, 3 RD FLOOR, MADIWALA, BENGALURU 560 068. PAN : A AAKC 0093 M VS. THE INCOME-TAX OFFICER (TDS), WARD 1(2), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI. TSHERING ONGELA , ADDL. CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 24 . 0 6 .20 20 DATE OF PRONOUNCEMENT : 26 . 0 6 .20 20 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER THESE FOUR APPEALS ARE FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE COMBINED ORDER OF LEARNED CIT(A)-13, BENGALURU, DATED 24.01.2020, FOR ASSESSMENT YEARS 2011-12 TO 2014-15. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ALTHOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS FOR EACH OF THESE YEARS BUT THERE IS ONLY ONE COMMON GRIEVANCE OF THE ASSESSEE IN ALL THESE YEARS AND THE SAME IS REGARDING DEMANDS RAISED BY THE AO UNDER SECTIONS 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT), BY REJECTING THIS CLAIM OF THE ASSESSEE THAT THE ASSESSEE HAS IN FACT MADE A BONAFIDE ESTIMATE OF THE SALARIES OF ITS EMPLOYEES BY VALUING THE PERQUISITES IN THE FORM OF UNFURNISHED ACCOMMODATION PROVIDED TO ITS EMPLOYEES AS IF THEY ARE EMPLOYEES OF THE CENTRAL GOVERNMENT. ITA NOS. 317 TO 320/BANG/2020 PAGE 2 OF 4 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE ISSUE INVOLVED IN THESE APPEALS IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AS BY THE TRIBUNAL ORDER RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) IN ITA NO.1589/BANG/2014 DATED 27.02.2015. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND POINTED OUT THAT IN THIS CASE, THE TRIBUNAL HAS DULY CONSIDERED THE EARLIER TRIBUNAL ORDER RENDERED IN THE CASE OF CFTRI VS. ITO (TDS) IN ITA NOS.1607 TO 1611/BANG/2011 DATED 04.07.2014 ON WHICH RELIANCE HAS BEEN PLACED BY LEARNED CIT(A) IN PARA 7 OF THE IMPUGNED ORDER AND THEREFORE, THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THIS LATER TRIBUNAL ORDER RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA). HE DREW OUR ATTENTION TO PARA 19 OF THIS TRIBUNAL ORDER. LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT LEARNED CIT(A) HAS REPRODUCED THE CONTENTS OF THE TRIBUNAL ORDER RENDERED IN THE CASE OF CFTRI VS. ITO (TDS) (SUPRA). IN PARA 8 OF HIS ORDER, LEARNED CIT(A) HAS ALSO REFERRED TO ANOTHER TRIBUNAL ORDER RENDERED IN THE CASE OF NATIONAL DIARY RESEARCH INSTITUTE IN ITA NOS.1759 TO 1761/BANG/2017 DATED 31.05.2018. ALTHOUGH THIS TRIBUNAL ORDER IS OF A LATER DATE IN COMPARISON TO TRIBUNAL ORDER CITED BY LEARNED AR OF THE ASSESSEE HAVING BEEN RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA) BUT THIS IS NOT SHOWN TO US THAT IN THIS CASE, THIS EARLIER TRIBUNAL ORDER RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA) WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL AND THE SAME WAS CONSIDERED BY THE TRIBUNAL WHEREAS IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA), EARLIER TRIBUNAL ORDER WHICH IS AGAINST THE ASSESSEE HAVING BEEN RENDERED IN THE CASE OF CFTRI VS. ITO (TDS) (SUPRA) WAS DULY TAKEN NOTE OF AND CONSIDERED. UNDER THESE FACTS, WE FEEL IT PROPER TO FOLLOW THE TRIBUNAL ORDER RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA) AND FOR READY REFERENCE, WE REPRODUCE PARA 19 OF THIS TRIBUNAL ORDER. THIS PARA READS AS UNDER: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OUR VIEW, THE PLEA OF THE ASSESSEE THAT IT MADE A BONA FIDE ESTIMATE OF EMPLOYEES SALARY BY VALUING THE PERQUISITES IN THE FORM OF RESIDENTIAL ACCOMMODATION PROVIDED TO THE EMPLOYEES BY VALUING THE SAME AS IF EMPLOYEES WERE EMPLOYEES OF CENTRAL GOVT. HAS TO BE ACCEPTED. IN THIS REGARD, IT IS CLEAR FROM THE RECORDS THAT THE POSITION WITH REGARD TO THE ASSESSEE ITA NOS. 317 TO 320/BANG/2020 PAGE 3 OF 4 NOT BEING A CENTRAL GOVT. WAS BROUGHT TO ITS NOTICE BY THE DEPARTMENT ONLY IN THE PROCEEDINGS INITIATED IN 2013. EVEN THEREAFTER, THE ASSESSEE HAS BEEN TAKING A STAND THAT ITS EMPLOYEES ARE EMPLOYEES OF CENTRAL GOVT. AS HELD IN SEVERAL DECISIONS REFERRED TO BY THE LD. COUNSEL FOR THE ASSESSEE, THE OBLIGATION OF THE ASSESSEE IS ONLY TO MAKE A BONA FIDE ESTIMATE OF THE SALARY. IN OUR VIEW, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, ASSESSEE HAS MADE SUCH AN ESTIMATE. THE ASSESSEE'S OBLIGATION U/S. 192 IS THEREFORE PROPERLY DISCHARGED AND HENCE PROCEEDINGS U/S. 201(1) & 201(1A) OF THE ACT HAVE TO BE QUASHED AND ARE HEREBY QUASHED. 5. WE FIND THAT IN THIS CASE, THE TRIBUNAL NOTED THAT THE POSITION WITH REGARD TO THE ASSESSEE NOT BEING A CENTRAL GOVERNMENT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE DEPARTMENT ONLY IN THE PROCEEDINGS INITIATED IN 2013 AND EVEN THEREAFTER, THE ASSESSEE HAS BEEN TAKING A STAND THAT ITS EMPLOYEES ARE THE EMPLOYEES OF CENTRAL GOVERNMENT AND UNDER THESE FACTS, BY FOLLOWING VARIOUS DECISION CITED BY LEARNED AR OF THE ASSESSEE IN THAT CASE, THE TRIBUNAL HELD THAT THE OBLIGATION OF THE ASSESSEE IS ONLY TO MAKE BONAFIDE ESTIMATE OF THE SALARY AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND IN THE PRESENT CASE, IT IS POINTED OUT BY THE LEARNED AR OF THE ASSESSEE THAT NOTICES UNDER SECTION 201(1) AND 201(1A) OF THE ACT FOR ASSESSMENT YEARS 2011-12 TO 2014-15 WERE ISSUED BY THE AO ON 29.10.2013 AND CONSEQUENTLY, ORDERS UNDER SECTIONS 201(1) AND 201(1A) OF THE ACT FOR THESE 3 YEARS WERE PASSED BY THE AO ON 06.03.2014. LEARNED AR OF THE ASSESSEE HAS SUBMITTED A COPY OF SUCH NOTICES ISSUED BY THE AO AND THE REPLIES FILED BY THE ASSESSEE BEFORE THE AO IN WHICH ALSO, THE ASSESSEE HAS REITERATED ITS STAND THAT THE EMPLOYEES OF THE ASSESSEE COMPANY ARE TO BE CONSIDERED AS EMPLOYEES OF THE CENTRAL GOVERNMENT BECAUSE THE ASSESSEE IS A STATUTORY BODY FUNCTIONING UNDER THE CONTROL OF MINISTRY OF TEXTILES, GOVERNMENT OF INDIA AND IT IS ESTABLISHED BY THE ACT OF THE PARLIAMENT UNDER THE CENTRAL SILK BOARD ACT, 1948 TO PROVIDE SCIENTIFIC AND TECHNICAL ASSISTANCE FOR DEVELOPMENT OF THE SILK INDUSTRY UNDER THE CONTROL OF THE CENTRAL GOVERNMENT AND THEREFORE, SET UP OF THE ASSESSEE IS ENTIRELY DIFFERENT AND THE SAME CANNOT BE COMPARED WITH IIM, CFTRI, ETC. HENCE, IT IS SEEN THAT IN THE PRESENT CASE ALSO, THIS OBJECTION OF THE DEPARTMENT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE BY WAY OF NOTICES ISSUED ON 29.10.2013 IN WHICH IT WAS POINTED OUT BY THE DEPARTMENT THAT THE ASSESSEE HAS TO BE TREATED AS OTHER THAN CENTRAL / STATE GOVERNMENT AND THE VALUE OF PERQUISITE HAS TO BE CALCULATED AS PER SL. NO.2 OF TABLE 1 OF RULE 3. UNDER THESE FACTS, IN OUR CONSIDERED OPINION, THIS TRIBUNAL ORDER CITED BY LEARNED AR OF THE ASSESSEE HAVING BEEN RENDERED IN THE CASE OF INDIAN INSTITUTE OF SCIENCE VS. DCIT (TDS) (SUPRA) IS SQUARELY APPLICABLE AND THEREFORE, RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER AND IN THE FACTS OF THE PRESENT CASE, WE HOLD THAT ITA NOS. 317 TO 320/BANG/2020 PAGE 4 OF 4 THE OBLIGATION OF THE ASSESSEE IS ONLY TO MAKE BONAFIDE ESTIMATE OF THE SALARY OF ITS EMPLOYEES AND IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ASSESSEE HAS MADE SUCH AN ESTIMATE AND THEREFORE, THE ASSESSEES OBLIGATION UNDER SECTION 192 IS THEREFORE, PROPERLY DISCHARGED AND HENCE, PROCEEDINGS UNDER SECTIONS 201(1) AND 201(1A) OF THE ACT HAVE TO BE QUASHED AND WE QUASH THE SAME. 6. IN THE RESULT, ALL THE 4 APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 26 TH JUNE, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.