Vinayak TMT Bars Pvt.Ltd., Gandhinagar V. Income Tax Officer(TDS), Gandhinagar

ITA 3418/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6318 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 08-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; TDS
• Section: 40(a)(ia); 201(1); 201; 40a(ia)

Judgement Text

ITA NO. 3418/AHD/2015 VINAYAK TMT BARS PVT LTD VS. ITO(TDS) ASSESSMENT YEAR : 2015-16 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 3418/AHD/2015 ASSESSMENT YEAR: 2015-16 VINAYAK TMT BARS PVT LTD .............. ......APPELLANT VILLAGE: BAROT-NA-MOSAMPUR, SAMPA, DEHGAM, GANDHINAGAR [PAN : AACCV 8071 H] VS. INCOME-TAX OFFICER (TDS) . .............................RESPONDENT GANDHINAGAR APPEARANCES BY: TUSHAR HEMANI FOR THE APPELLANT MUDIT NAGPAL FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 10.01.2018 DATE OF PRONOUNCING THE ORDER : 10.01.2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 15 TH OCTOBER 2015 PASSED BY THE BY THE CIT(A), GANDHINA GAR, AHMEDABAD, IN THE MATTER OF TAX WITHHOLDING DEMAND RAISED UNDER SECTION 201 R.W.S. 194H OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMEN T YEAR 2015-16. 2. THE GRIEVANCES RAISED BY THE APPELLANT ARE AS FO LLOWS:- 1. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF ID. AO OF CONSIDERING 'CASH DISCOUNT PAYMENT' AS COMMI SSION PAYMENT' AND FURTHER HOLDING THAT THE APPELLANT IS LIABLE TO DED UCT AND PAY TDS @ 10% U/S. 194H OF THE ACT ON SUCH PAYMENT. 2. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF ID. AO OF TREATING THE APPELLANT AS DEFAULTER FOR NON D EDUCTION OF TAX AT SOURCE U/S. 201(1)/ 201(1 A) OF THE ACT. 3. ALTERNATIVELY AND WITHOUT PREJUDICE TO ABOVE, TH E ID. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE RECIPIENT OF THE SAID DISCOUNT HAS ALREADY PAID TAXES ON ITA NO. 3418/AHD/2015 VINAYAK TMT BARS PVT LTD VS. ITO(TDS) ASSESSMENT YEAR : 2015-16 PAGE 2 OF 3 THE SAME AND THEREFORE ALSO THE APPELLANT COULD NOT HAVE BEEN TREATED AS ASSESSEE IN DEFAULT AS PER THE PROVISO TO THE SECTI ON 201(1) OF THE ACT. 4. BOTH THE POWER AUTHORITIES HAVE PASSED THE ORDER S WITHOUT PROPERLY APPRECIATING THE FACTS AND THAT THEY FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSION, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BE FORE PASSING THE IMPUGNED ORDER. THE ACTION OF THE LOWER AUTHORITIES IS CLEAR BREACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVE S TO BE QUASHED. 2. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LE ARNED REPRESENTATIVES FAIRLY AGREE THAT THIS ISSUE IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, IN PRINCIPLE, BY A SERIES OF ORDERS PASSED BY THIS TRIBUNAL, FOLLOWING HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF CIT V. ANSAL LANDMARK TOWNS HIP (P.) LTD., [2015] 377 ITR 635 (DELHI), IN ESSENCE HOLDING THAT AS LONG AS THE RECIPIENT HAS DULY DISCHARGED HIS TAX OBLIGATION IN RESPECT OF INCOME EMBEDDED IN SUC H PAYMENTS, THE TAX WITHHOLDING LIABILITY UNDER SECTION 201 CANNOT BE INVOKED. WE MAY, IN THIS REGARD, REFER TO THE FOLLOWING OBSERVATIONS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF JANAK BHUPATRAI PAREKH (HUF) VS. ITO IN ITA NO.2891/AHD/2 011 FOR AY 2007-08:- 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. WE HAVE NOTED THAT AS HELD BY THE HONBLE DELHI HIG H COURT IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD, 377 ITR 635 (D ELHI) THE SECOND PROVISO TO SECTION 40(IA) EVEN THOUGH IT IS STATED TO BE EF FECTIVE FROM 01.04.2013 IS TO BE TAKEN AS RETROSPECTIVE IN EFFECT AND, THEREFORE, AS LONG AS RECIPIENTS OF THE INCOME HAVE DISCHARGED THEIR TAX LIABILITY, DISALLO WANCE UNDER SECTION 40A(IA) CANNOT BE MADE. AS WE NOTE THIS LEGAL PROPOSITION, WE ARE ALIVE TO THIS FACT THAT THE AUTHORITIES BELOW HAVE NOT ADDRESSED THEMS ELVES TO THIS ASPECT OF THE MATTER. IN VIEW OF THIS LEGAL AND FACTUAL POSITION, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF ASSESSING OFFICER F OR THE FACTUAL VERIFICATION AS EMBEDDED IN THE ABOVE LEGAL PROPOSITION ON THE FACT OF THIS CASE. IN THE EVENT OF RECIPIENTS OF REFERRAL COMMISSION HAVING DULY DI SCHARGED THEIR TAX LIABILITIES, OBVIOUSLY THERE CANNOT BE ANY OCCASION FOR DISALLOW ANCE UNDER SECTION 40(A)(IA) OF THE ACT. 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT, IN LI GHT OF PRINCIPLES SO LAID DOWN, THE MATTER MAY BE REMITTED TO THE FILE OF THE ASSES SING OFFICER FOR THE LIMITED VERIFICATION REGARDING DISCHARGING OF TAX OBLIGATIO N BY THE RECIPIENTS IN RESPECT OF INCOME EMBEDDED IN THE PAYMENTS IN QUESTION. IN OTH ER WORDS, THE ASSESSING OFFICER ITA NO. 3418/AHD/2015 VINAYAK TMT BARS PVT LTD VS. ITO(TDS) ASSESSMENT YEAR : 2015-16 PAGE 3 OF 3 WILL VERIFY THAT THE PAYMENTS IN QUESTION ARE INCLU DED IN RECEIPTS DISCLOSED BY THE RECIPIENTS AND THAT THE TAX OBLIGATION IN RESPECT O F PROFIT ARISING OUT OF SUCH RECEIPTS IS DULY DISCHARGED. WITH THESE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. AS THIS APPEAL IS DECIDED ON TH E SHORT POINT REGARDING DISCHARGING OF TAX OBLIGATION BY THE RECIPIENTS OF PAYMENTS, AL L OTHER ISSUES RAISED IN THIS APPEAL ARE RENDERED INFRUCTUOUS; AS SUCH, THESE ISSUES DO NOT CALL FOR ANY ADJUDICATION AT THIS STAGE. 4. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 1 0 TH DAY OF JANUARY, 2018. SD/- SD/- S S GODARA PRAMOD K UMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 10 TH DAY OF JANUARY, 2018 *BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ... 10.01.2018...TWO PAGES DICTATION PAD, AS DICTATED BY HONBLE AM, IS ATTACHED .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 10.01.2018...... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: ... 10.01.2018..... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 10.01.2018... 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : ....10.01.2018.................. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 8. DATE OF DESPATCH OF THE ORDER: ......