M/s InterGlobe Aviation Ltd., Gurgaon V. Deputy Commissioner of Income-tax, Ghaziabad

ITA 3390/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7866 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 27-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Opportunity of being heard; Principle of natural justice; TDS
• Section: 201(1); 154

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 3390/DEL/2015 ASSESSMENT YEAR: 2014-15 INTER GLOBE AVIATION LTD., TOWER - D, 4 TH FLOOR, GLOBAL BUSINESS PARK, DLF PHASE-3, M.G. ROAD, GURGAON. PAN AABCI2726B (APPELLANT) VS. DCIT (TDS), CPC, GHAZIABAD. (RESPONDENT) APPELLANT BY SH. NAGESH BEHL, C.A. RESPONDENT BY SH.SURENDER PAL, SR. DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-41, NEW DELHI DATED 24.03.2015 FOR THE ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS : 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 1, NEW DELHI [LD. CIT(A)] ERRED IN LAW AND IN FACTS I N UPHOLDING A DEMAND OF RS. 40,55,630 AS PAYABLE BY THE APPELLA NT. 2. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INTIMATION DATED 14 DECEMBER 2013 ISSUED BY DEPUTY COMMISSIONER OF INCOME TAX, TDS CPC , DATE OF HEARING 18.02.2019 DATE OF PRONOUNCEMENT 23.04.2019 ITA NO. 3390/DEL/2015 2 GHAZIABAD (LD. AO) UNDER SECTION 154 READ WITH SE CTION 200A OF THE INCOME-TAX ACT, 1961 (THE ACT) IS BAD IN L AW. 3. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE DEMAND RAISED PURSUANT TO PRO CESSING OF STATEMENT OF TAX DEDUCTION AT SOURCE UNDER SECTION 200A WAS ERRONEOUS TO THE EXTENT SUCH DEMAND DID NOT ARISE O N ACCOUNT OF ANY ARITHMETICAL ERROR IN THE STATEMENT OR AN INCOR RECT CLAIM APPARENT FROM ANY INFORMATION IN THE STATEMENT AND THEREFORE SUCH COULD NOT BE RAISED UNDER THE PROVISIONS OF SE CTION 200A OF THE ACT. 4. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INTIMATION DATED 14 DECEMBER 2013 ISSUED BY LD. AO UNDER SECTION 154 READ WITH SECTIO N 200A OF THE ACT WAS ISSUED IN VIOLATION OF SECTION 154(3) O F THE ACT AND PRINCIPLES OF NATURAL JUSTICE TO THE EXTENT THE APP ELLANT WAS NOT PROVIDED AN OPPORTUNITY TO SHOW CAUSE AS TO WHY THE APPELLANT SHOULD NOT BE CONSIDERED AS AN ASSESSEE IN DEFAULT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 201 (1) OF THE ACT. 5. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE CANCELLATION OF CERTIFICATES, ISSUED BY LD. AO UNDER SECTION 197 OF THE ACT FOR AUTHORIZING DED UCTION OF TAXES AT LOWER RATE, WAS AGAINST PRINCIPLE OF NATUR AL JUSTICE AND WAS BAD IN LAW. 5.1 THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE FACT REGARDING CANCELLATION O F CERTIFICATES ISSUED BY LD. AO WAS NOT INTIMATED BY THE LD. AO TO THE APPELLANT AS MENTIONED AT THE TIME OF ISSUANCE OF C ERTIFICATES BY LD. AO. 5.2 THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE CANCELLATION OF CERTIFICATES ISSUED BY LD. AO WAS NOT COMMUNICATED IN ACCORDANCE WITH PROVISIO NS OF THE ACT. ITA NO. 3390/DEL/2015 3 6. THE LD. CIT(A) ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN NOT APPRECIATING THE FACT THAT O NLINE FACILITY FOR VERIFICATION OF VALIDITY OF LOWER/ NIL TAX DEDU CTION CERTIFICATES WAS NOT FUNCTIONAL AT THE TIME OF DEDU CTION OF TAXES BY APPELLANT ON PAYMENTS TO THE PAYEES. 7. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT APPELLANT SHOULD NOT BE CONSIDERE D TO BE AN ASSESSEE IN DEFAULT IN ACCORDANCE WITH THE FIRST P ROVISO TO SECTION 201 (1) OF THE ACT. 7.1 THE LD. CIT(A) ERRED IN FACTS AND IN LAW IN UPH OLDING THE ORDER OF THE LD. AO, WITHOUT HAVING DUE REGARD TO THE FACT THAT THE APPELLANT HAS DULY FURNISHED ANNEXURE A TO FORM 26A OBTAINED FROM THE PAYEE IN ACCORDANCE WITH THE PROVISIONS OF FIRST PROVISO TO SECTION 201(1) OF TH E ACT. 8. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE DEMAND IS RAISED WITHOUT COND UCTING VERIFICATION WHETHER PAYEE HAS PAID TAXES ON THE IN COME OR NOT. 9. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE DEMAND IS RAISED WITHOUT COMP LYING WITH THE FIRST PROVISO TO SECTION 201 AND WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE TO FURNISH FORM 26A. 5. THE LD. CIT(A) ERRED IN FACTS AND IN LAW IN UPHO LDING THE LEVY OF INTEREST UNDER SECTION 201(1 A) OF THE ACT ON ACCOUNT OF ALLEGED SHORT-DEDUCTION OF TAXES. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY DEDUCTED TDS FROM PAYMENTS MADE TO VARIOUS INDIAN PARTIES. ACCOR DINGLY, THE APPELLANT FILED ITS QUARTERLY TDS STATEMENT IN PRESCRIBED FORM NO. 26Q FOR THE QUARTER ENDING ITA NO. 3390/DEL/2015 4 JUNE, 2013 FOR F.Y. 2013-14. THE APPELLANT RECEIVED INTIMATION DATED 14.12.2013 FROM TDS CPC WHEREIN TOTAL SUM OF RS.6,0 4,76,650/- WAS TO BE PAYABLE BY THE APPELLANT. THE ABOVE DEMAND WAS RAIS ED BY THE TDS CPC(CENTRAL PROCESSING CENTRE) DUE TO SHORT DEDUCTI ON OF TDS MADE TO SOME SPECIFIED PARTIES. THE ASSESSEE FILED REVISED RETUR N BECAUSE THERE WERE SOME MISTAKES ON THE PART OF THE ASSESSEE, WHEREIN THE L TDC (LOW TAX DEDUCTION CERTIFICATE) WAS RECTIFIED WHICH WAS CONSIDERED BY THE TDS, CPC EXCEPT IN THE CASE OF FOLLOWING PARTIES : NAME LTDC NO. MUMBAI INTERNATIONAL AIR PORT PVT. LTD. 0213QN561 J RAM KRISHNA TRAVELS PVT. LTD. 0913AE803J THE QUARTERLY TDS RETURN WAS PROCESSED U/S. 154 ON 10.02.2014 BY RAISING THE DEMAND OF RS.40,55,630/-. AGAINST THIS RECTIFICATIO N ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), WHERE THE ASSESSEE SU BMITTED DETAILED REPLY THAT THE ASSESSING OFFICER HAD ISSUED LTDC U/S. 197 WHIC H HAS BEEN CANCELLED IN RESPECT OF FOLLOWING THREE PARTIES AND THEIR LTDC W ERE CANCELLED BY THE ASSESSING OFFICER, THE INFORMATION OF WHICH WAS NOT AVAILABLE ON ITD WEBSITE. THEREFORE, THE ASSESSEE DEDUCTED LOWER TAX : NAME OF THE PARTY AMOUNT OF TDS DEMAND (RS.) MUMBAI INTERNATIONAL AIRPORT LTD. (PAN: AAECM6285C) 35,51,501/ - RAM KRISHNA TRAVELS PVT. LTD. PAN: AABCR1016M 510/ - THE FEDERAL TRAVEL AND TOUR PVT. LTD. PAN : AADCT9952C 26,003/ - TOTAL 35,78,014/ - ITA NO. 3390/DEL/2015 5 THE LD. CIT(A) GAVE DIRECTION TO THE ASSESSING OFFI CER TO VERIFY WHETHER THE CANCELLATION CERTIFICATE WAS UPLOADED ON ITD WEBSIT E AND IF THE CANCELLATION WAS UPLOADED ON ITD THEN THE CLAIM OF THE APPELLANT SHOULD BE REJECTED. HE ALSO DIRECTED TO VERIFY THE CONTENTION OF THE ASSES SEE THAT THE ASSESSEE HAD DEPOSITED INTEREST U/S. 201(1A) OF RS.5,07,264/- AN D TO GIVE ITS CREDIT IF IT IS FOUND VERIFIED. AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE THE TRIBUNAL. 3. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AS SESSEE IS NOT IN DEFAULT ONCE HE WAS NOT MADE AWARE OF THE CANCELLATION OF L TDC AND NO OPPORTUNITY OF BEING HEARD WAS GIVEN BEFORE CANCELLATION OF LTDC. ONCE, THE ASSESSEE WAS SUPPLIED LTDC, THE ONLY OBLIGATION OF THE ASSESSEE WAS TO DEDUCT TAX AS PER LTDC ISSUED. THEREAFTER, THERE WAS NO OBLIGATION OF THE ASSESSEE TO EXAMINE FOR ITS CANCELLATION FROM ITD ONCE HE WAS NOT SUPPLIED ANY CANCELLATION ORDER OF LTDC. HENCE, NO INTEREST LIABILITY IS PAYABLE BY TH E ASSESSEE. THE ASSESSING OFFICER HAS VIOLATED THE PROVISIONS OF SECTION 197( 2) OF THE IT ACT. THE ASSESSEE HAD ALSO FILED FORM NO. 26A DULY CERTIFIED BY CA WH ICH WAS NOT CONSIDERED BY THE LD. CIT(A) BEFORE DECIDING THE APPEAL. HE HAS A LSO FILED A WRITTEN SYNOPSIS WHICH IS PLACED ON RECORD. 4. ON THE OTHER HAND, THE LD. DR PLACED RELIANCE ON THE ORDER OF THE LOWER AUTHORITY AND SUBMITTED THAT THE LD. CIT(A) HAS GIV EN DIRECTION TO THE ASSESSING OFFICER FOR VERIFICATION OF CANCELLATION OF LTDC AN D ITS UPLOADING ON ITD. EVEN IF ITA NO. 3390/DEL/2015 6 THE TAX HAS BEEN PAID BY THE DEDUCTEE ON THE AMOUNT S LIABLE FOR TDS, THE INTEREST CANNOT BE WAIVED OFF U/S. 201(1A) OF THE A CT. INTEREST IS COMPENSATORY IN NATURE AND THEREFORE, THE ASSESSEE SHALL BE TREA TED AS ASSESSEE IN DEFAULT. 5. AFTER HEARING BOTH THE SIDES AND PERUSING THE MA TERIALS AVAILABLE ON RECORD, WE ARE OF THE OPINION THAT BEFORE REACHING TO ANY DEFINITE CONCLUSION IN THIS APPEAL, VARIOUS ASPECTS OF THE CASE NEED VERIF ICATION AT THE STAGE OF ASSESSING OFFICER. WITH REFERENCE TO GROUND NO. 6, THE ASSESSEE HAS TAKEN A PLEA THAT ONLINE FACILITY FOR VERIFICATION OF VALIDITY O F LTDC WAS NOT FUNCTIONAL AT THE TIME OF DEDUCTION OF TAXES BY THE APPELLANT ON PAYM ENTS TO THE PAYEES AND THEREFORE, THE ASSESSEE CANNOT BE TERMED AS ASSESSE E IN DEFAULT. THIS FACT NEEDS VERIFICATION TO ASCERTAIN THE DEFAULT OF THE ASSESS EE, PARTICULARLY WHEN NO CANCELLATION ORDER OF LTDC WAS SUPPLIED TO THE ASSE SSEE. IN GROUND NO. 7, THE ASSESSEE HAS OBJECTED THAT ANNEXURE TO FORM 26A OBT AINED FROM THE PAYEES WAS FILED BUT THE SAME HAS NOT BEEN CONSIDERED BY T HE LD. CIT(A), WHEREAS IN GROUND NO. 9, THE ASSESSEE STATES THAT NO OPPORTUNI TY WAS GIVEN TO THE ASSESSEE TO FURNISH FORM 26A. IN THIS CONTEXT, IT IS NECESSA RY TO EXAMINE FORM NO. 26 AND ALL ITS ANNEXURES FILED BY THE PAYEES AND THE A SSESSEE IS REQUIRED TO FURNISH THE SAME IN ITS SUPPORT FOR VERIFICATION. SIMILARLY , IN GROUND NO. 8 THE ASSESSEE HAS CHALLENGED THAT THE LD. CIT(A) HAS FAILED TO VE RIFY WHETHER THE PAYEES HAVE PAID TAXES ON THE INCOME OR NOT BEFORE SADDLING INT EREST LIABILITY AGAINST THE ASSESSEE. THIS FACT ALSO REQUIRES VERIFICATION AT T HE STAGE OF ASSESSING OFFICER BEFORE HOLDING THE ASSESSEE IN DEFAULT. IN PRESENCE OF ALL THESE FACTS, WE REMIT THE CASE BACK TO THE ASSESSING OFFICER FOR DECIDING THE CORE ISSUE INVOLVED IN THIS APPEAL AFTER MAKING DUE VERIFICATION OF THE AF ORESAID ASPECTS. NEEDLESS TO ITA NO. 3390/DEL/2015 7 SAY, THE ASSESSEE SHALL BE GIVEN REASONABLE OPPORTU NITY OF BEING HEARD TO PUT UP ITS CASE ON MERITS AND TO PRODUCE ALL NECESSARY EVIDENCES IN SUPPORT OF ITS CLAIM. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.04.2019. SD/- SD/- (AMIT SHUKLA) (L.P. S AHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23.04.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI