The Chief Executive Officer, Shimla V. ITO (TDS), Shimla

ITA 350/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77139 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AAKARSHAN SINGH
• Assessee Lawyers: ROHAN THAKUR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 350/CHD/2014 FINANCIAL YEAR 2011-12 (3 RD & 4 TH QTRS) (ASSESSMENT YEAR: 2012-13) THE CHIEF EXECUTIVE OFFICER VS. ITO (TDS), H.P. BUS STAND MANAGEMENT SHIMLA AND DEVELOPMENT AUTHORITY SHIMLA PAN NO. PTLH11194B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ROHAN THAKUR RESPONDENT BY : SH. AAKARSHAN SINGH DATE OF HEARING : 19/06/2014 DATE OF PRONOUNCEMENT : 27.06.2014 ORDER PER T.R. SOOD, A.M. THE APPEAL IS LATE BY 6 DAYS AND LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT DELAY WAS NOT INTENTIONAL AND DELAY WAS BECAUSE OF REASON S THAT THE PERSON TO WHOM APPEAL WAS GIVEN FOR SUBMISSION AT CHANDIGARH COULD NOT CAME T HAT DAY BECAUSE OF SOME URGENT WORK. HE PRAYED THAT DELAY MAY BE CONDONED. 2. ON THE OTHER HAND LD. DR OPPOSES THE SUBMISSION OF LD. COUNSEL FOR THE ASSESSEE. 3. AFTER CONSIDERING THE RIVAL SUBMISSION WE ARE SA TISFIED THAT ASSESSEE HAD SUFFICIENT CAUSE FOR FILING APPEAL LATE. SINCE THE DELAY IS ON LY FOR 6 DAYS THEREFORE WE CONDONED THE DELAY. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : I. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED UPHOLDING AND SUSTAINING THE APPLICATION OF PROVISIONS OF SECTION 194J OF THE IN COME TAX, 1961 BY THE LD. ITO (TDS) TO THE APPELLANT ON THE RE-BURSEMENT OF EXPENSES TO HRTC AS THE ISSUE OF NON DEDUCTION OF TAX AT SOURCE HAS BEEN DECIDED BY THIS HONBLE COURT IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 31.12.2013. II. THAT THE ORDER PASSED BY THE LD. AO (TDS) IS OTHERW ISE BAD IN LAW. 5. AFTER HEARING BOTH THE PARTIES WE FIND THAT ON T HE BASIS OF SURVEY IN THE PREMISES OF THE ASSESSEE IT WAS NOTICED THAT ASSESSEE HAS MA DE CERTAIN PAYMENTS TO HIMACHAL PRADESH ROAD TRANSPORT CO. LTD. ON WHICH NO TAX WAS DEDUCTED AND ACCORDINGLY AO DETERMINED LIABILITY OF THE ASSESSEE ON THE BASIS O F EARLIER YEARS ORDERS AT RS. 2398000/-. ON APPEAL THE LD. CIT(A) FOLLOWING EARLIER YEARS OR DERS CONFIRMED THE ACTION OF AO. 6. BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISSUE IS COVERED BY THE ORDER OF TRIBUNAL FOR EARLIER YEARS AND HE PLACED O N RECORD A COPY OF THE ORDER OF EARLIER YEARS. 7. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF LD. CIT(A). 8. AFTER CONSIDERING THE RIVAL SUBMISSION WE FIND T HAT THIS ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN AY- 2009-10 TO 2012-13 IN ITA NO. 761,762,763 & 764 / CHD/2012, THE ISSUE WAS DECIDED VIDE PARA 13 WHICH IS AS UNDER : AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT THE ASSESSEE AUTHORITY CAME INTO EXISTENCE W.E.F. 1.4.2000. MAIN FUNCTION OF TH E AUTHORITY WAS TO LOOK AFTER THE MANAGEMENT OF VARIOUS BUS STANDS. BEFORE ESTABLISHI NG THIS AUTHORITY THE BUS STANDS WERE BEING MANAGED BY HP ROAD TRANSPORT CORP ORATION. THE ASSESSEE AUTHORITY DID NOT HAVE FULL TIME STAFF AND INFRASTR UCTURE TO MANAGE THE BUS STANDS AND SINCE THE BUS STANDS ARE BEING MAINLY USED BY T HE HRTC IT WAS DECIDED TO REIMBURSE HRTC ON CERTAIN BASIS IN THE MEETING OF T HE AUTHORITY HELD ON 28.03.2002 AS UNDER: 1 HEAD OFFICE 1. G.M. (O.P) FULL SALARY + ALLOWANCE 2. FA & CAO -DO- 3. DM (ADMN) -DO- 4. DDM (LEGAL) 25% THE ACTUAL EXPENDITURE ON TELEPHONE, CARS AND SALAR Y OF DRIVERS ATTACHED WITH THE GM (O.) P, FA & CAO AND DM (ADMN) WILL BE DEBITED TO THE AUTHORITY: ALL DIVISION 1. SALARY OF DM 10% 2. SALARY OF DC/A.C (F&A) 10% 3. SALARY OF TWO SR. ASSISTANT 100% 4. JR. ENGINEER 50% FROM THE ABOVE IT BECOME CLEAR THAT THE AUTHORITY H AD SOME FULL TIME STAFF FOR WHICH IT WAS PAYING ITSELF. HELP OF HRTC WAS TAKEN IN THE FORUM OF STAFF AND CERTAIN OTHER FACILITIES AT PREDEFINED PERCENTAGE O F SALARY WAS REIMBURSED E.G. SALARIES OF VARIOUS DIVISIONAL MANAGER / REGIONAL M ANAGER WAS TO BE REIMBURSED @ 10%. SIMILARLY IN CASE OF JUNIOR ENGINEER 50% OF THE SALARY WAS TO BE REIMBURSED. THEREFORE, THE ASSESSEE AUTHORITY WAS B ASICALLY NOT HAVING INFRASTRUCTURE AND TAKING HELP OF HRTC AND WAS REIM BURSING THE EXPENDITURE TO THE HRTC. THE PROVISIONS OF TDS I.E. SECTION 194J A RE NOT APPLICABLE IF IT IS ONLY A CASE OF REIMBURSEMENT OF EXPENDITURE. THE REASON FOR THE SAME IS VERY CLEAR. FOR EXAMPLE IF HRTC IS GIVING SALARY TO ITS DIVISIO NAL MANAGER, IT WILL DEDUCT FULL TAX AND PAY THE SAME ACCORDINGLY. IF THE ASSESSEE A UTHORITY DEDUCT THE TAX ON ACCOUNT OF SALARY TO DIVISIONAL MANAGER THEN THAT W OULD AMOUNT TO DOUBLE DEDUCTION OF TAXES OF THE SALARY OF DIVISIONAL MANA GER WHICH IS NOT POSSIBLE. THE ASSESSEE IS NOT PAYING LUMP SUM CHARGES TO THE HRTC WHICH CAN BE CONSTRUED AS SERVICE CHARGES. IT IS ONLY THE REIMBURSEMENT OF PR EDETERMINED RATES. SAME VIEW HAS BEEN TAKEN BY OTHER BENCHES OF THE TRIBUNAL IN FOLLOWING CASES: 1. BANGALORE ELECTRICITY CO. LTD. VS. INCOME TAX OFFICER ITAT BANGALORE A BENCH (2012) 149 TTJ (BANG)102 2. BAYER MATERIAL SCIENCE (P) LTD. VS. ADDL. CIT (MUMB AI) ITAT MUMBAI A BENCH (2012) 148 TTJ (MUMBAI)581 3. SHARMA KAJARIA & CO. VS. DCIT ITAT KOLKATA A BEN CH (2012) 145 TTJ (KOL)1 4. THE KARNAVATI COPP. BANK LTD. VS. DEPUTY COMMISS IONER OF INCOME TAX ITAT AHMEDABAD D BENCH (2012) 144 TTJ (A HD) 769 5. ICICI BANK LTD. VS. DCIT ITAT LUCKNOW A BENCH (2 012) 156 TTJ (LUCKNOW) 569 THEREFORE, WE ARE OF THE OPINION THAT NO TAX WAS RE QUIRED TO BE DEDUCTED U/S 194 J. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CI T(A) AND HOLD THAT NO TAX IS DEDUCTIBLE BY THE ASSESSEE AUTHORITY. THEREFORE FOLLOWING THE ABOVE WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.06.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JUNE, 2014 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR