DAVELEPMENT OFFICER, Alwar V. ITO, Alwar

ITA 34/JPR/2015

• Counselvise Citation: 3423114 RSA 2015
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DHK
• Assessee Lawyers: AMIT KUMAR JOSHI

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH IH-DS-CALY] YS[KK LNL; DS LE{K BEFORE: SHRI P.K. BANSAL, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 34 & 35/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 & 2012-13. DEVELOPMENT OFFICER MGNREGA PANCHYAT SAMITI, UMRAIN, ALWAR. CUKE VS. THE INCOME TAX OFFICER, TDS, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR/TAN NO.: JPRPO 1880 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI AMIT KUMAR JOSHI, C.A. JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA, ADDL. CIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/11/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 4/11/2015 VKNS'K@ ORDER PER P.K. BANSAL, A.M. SINCE BOTH THESE APPEALS FILED BY THE ASSESSEE INV OLVED THE COMMON ISSUE, THEREFORE, BOTH THE CASES ARE DISPOSED OFF BY THIS COMMON ORDER. BOTH THE PARTIES AGREED THAT BOTH THESE APPEALS ARE DECIDED ON THE B ASIS OF FACTS INVOLVED IN ITA NO. 34/JP/2015. 2. THE ONLY ISSUE INVOLVED IN BOTH THESE APPEALS RE LATE TO THE LIABILITY OF DEDUCTION OF TAX AT SOURCE UNDER SECTION 194-C OF THE IT ACT. 2 ITA NOS. 34 & 35/JP/2015 DEVELOPMENT OFFICER MGNREGA VS. ITO TDS 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D ITS TDS RETURN FOR THE IMPUGNED ASSESSMENT YEARS BY NOT DEDUCTING THE TDS ON ITS EM PLOYEES INCOME. THE AO ISSUED THE NOTICE TO THE ASSESSEE AND TOOK THE VIEW THAT E ACH OF THE EMPLOYEES UNDER THE MGNREGA IS A CONTRACTOR AND, THEREFORE, LIABLE FOR D EDUCTION OF TAX UNDER SECTION 194C. THE AO, THEREFORE, TREATED THE ASSESSEE IN DEFAULT AND RAISED THE DEMAND. WHEN THE MATTER WENT BEFORE LD. CIT (A), THE LD. CIT (A) CON FIRMED THE ORDER OF THE AO HOLDING THAT THE PAYMENT MADE TO EACH PERSON IS IN THE NATU RE OF SERVICES RENDERED BY THEM ON THE BASIS OF ESSENTIALLY A LIMITED PERIOD CONTRACT AND, THEREFORE, WOULD REMAIN CONTRACTUAL IN NATURE. 4. I HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONS IDERED THE SAME. THE QUESTION IN THIS CASE IS WHETHER THE INDIVIDUALS WORKING UNDER THE MGNREGA ARE THEIR EMPLOYEES OR ARE CONTRACTOR. I NOTED THAT IN THIS CASE MGNREGA H AS THE FULL CONTRACTUAL OVER THE INDIVIDUALS AS TIMING OF THE OFFICE ARE FIXED, LEAV E GRANTED IN A YEAR ARE FIXED, WAGES PAID TO EACH PERSON IS ALSO FIXED. LETTER OF APPOIN TMENT ISSUED TO EACH OF THE PERSONS AND THAT LETTER IS DULY SIGNED BY THE DISTRICT COLL ECTOR, ALWAR AND THE ASSESSEE IS BOUND TO PAY THE FIXED PAY. THE RELATIONSHIP BETWEEN THES E PERSONS, IN MY OPINION, IS THAT OF THE EMPLOYER AND EMPLOYEE NEARLY. THESE PERSONS AR E EMPLOYED FOR A LIMITED TIME CANNOT CONVERT THE EMPLOYMENT INTO A CONTRACT. IN VIEW OF THESE FACTS, I AM OF THE VIEW THAT PROVISIONS OF SECTION 194-C WILL NOT APPL Y. IT IS ONLY THE PROVISIONS OF SECTION 192 CAN BE APPLIED IN THE CASE OF THE ASSESSEE. I, THEREFORE, QUASH THE ORDER PASSED BY THE AO. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. 3 ITA NOS. 34 & 35/JP/2015 DEVELOPMENT OFFICER MGNREGA VS. ITO TDS ORDER PRONOUNCED IN THE OPEN COURT ON 4/11/201 5. SD/- IH-DS-CALY ( P.K. BANSAL ) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 4/11/ 2015 DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DEVELOPMENT OFFRICER, MGNREGA, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO TDS, ALWAR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 34 & 35/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR