ACIT (TDS), UDAIPUR V. M/s. Chambal Fertilizers & Chemicals Ltd., KOTA

ITA 356/JODH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3032 (ITAT-JODHPUR)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-03-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 20-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Assessee Lawyers: M L PATODI SMT RITU DAS
• Section: 194C; 201(1)

Judgement Text

1 IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS. 355 & 356/JODH/2012) [A.YS. 2008-09 & 2009-10] THE A.C.I.T [TDS] VS. CHAMBAL FERTILISERS & CHEMIC ALS LTD UDAIPUR GADEPAN, DISTT. KOTA PAN NO. : JDHC 01428A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.L. PATODI SMT. RITU DAS DEPARTMENT BY : DR. DEEPAK SEHGAL, CIT, DR DATE OF HEARING : 21/03/2013. DATE OF PRONOUNCEMENT : 30/04/2013. PER HARI OM MARATHA: J.M. THESE ARE TWO APPEALS OF THE REVENUE FOR A.YS. 2008 -09 AND 2009-10 FILED AGAINST THE SEPARATE BUT EVEN DATED 3 0.07.2012 ORDERS PASSED BY LD. CIT(A), KOTA, VIDE WHICH PENALTIES LE VIED U/S 271C OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT'] HAVE BEEN DELETED. 2 2. THE BACKGROUND COMMON FACTS OF THE CASES ARE TH AT M/S CHAMBAL FERTILIZERS AND CHEMICALS LTD IS A PUBLIC L IMITED COMPANY, HAVING ITS REGISTERED OFFICE AT GADEPAN, DISTT. KOT A. THIS COMPANY HAS ITS REGISTERED OFFICE AT NEW DELHI AND ITS REGIONAL MARKETING OFFICES IN THE STATES OF PUNJAB, HARYANA, U.P., M.P. GUJARAT, ETC. THIS COMPANY IS ENGAGED IN THE MANUFACTURE OF FERTILIZERS, POWER , TEXTILES, ETC AND IS ALSO ENGAGED IN THE TRADING BESIDES IN SHIPPING ACT IVITIES. 3. A SPOT-VERIFICATION WAS CONDUCTED IN THIS CASE A T ITS BUSINESS PREMISES SITUATED AT GADEPAN IN KOTA, ON 16.12.2008 . ON THE BASIS OF THIS ENQUIRY NOTICES U/S 201(1) AND 201(1A) R.W.S 1 94J OF THE ACT WAS ISSUED BY THE ACIT [TDS], UDAIPUR ON 13.01.2009, O N THE GROUND THAT GAIL/IOCL [THE SELLERS] WHO PROVIDED CERTAIN FACILI TIES TO THE BUYER TO ENSURE UNINTERRUPTED SUPPLY OF AGREED AND REQUIRED QUANTITY AND QUALITY OF GAS THROUGH PIPELINE ON WHICH TRANSMISSI ON CHARGES WERE ALSO CHARGED. AS PER THE REVENUE THE TRANSMISSION CHARG ES ARE PAID TOWARDS SERVICES PROVIDED BY THE SELLER, WHICH HAS ATTRACTE D THE PROVISIONS OF SECTION 194J OF THE ACT. SINCE THE ASSESSEE HAD DE DUCTED TDS U/S 194C INSTEAD OF SECTION 194J, IT HAS RESULTED IN SHORT D EDUCTION OF TAX AT SOURCE OF RS. 9,86,00,598/- FOR A.Y. 2009-10 AND OF RS. 12,48,33,454/- FOR A.Y. 2008-09. BUT IN APPEALS PERTAINING TO TRE ATING THE ASSESSEE AS 3 AN ASSESSEE IN DEFAULT AND FOR WHICH TAX WAS LEVIED U/S 201 AND INTEREST WAS IMPOSED U/S 201(1A) THE TRIBUNAL HAS H ELD THAT THIS CONTRACT IS FOR SALE AND THE RECIPIENTS HAVE ALREAD Y PAID ENTIRE DUE TAXES AND THE INTEREST CHARGED U/S 201(1A) IN BOTH THE YEARS, ARE NOT CORRECT AND HAS APPROVED THE DELETION OF ADDITIONS SO MADE. BUT VIDE ORDER DATED 28.11.2011 THE ACIT HAS IMPOSED PENALTI ES U/S 271 AMOUNTING TO RS. 12,48,33,454/- IN A.Y. 2008-09 AND OF RS. 9,86,00,594/- IN A.Y. 2009-10 ON ACCOUNT OF FAILURE OF THE ASSESSEE- DEDUCTOR TO DEDUCT THE WHOLE OR ANY PART OF THE TAX AS REQUIRED UNDER CHAPTER XVII OF THE ACT THE LD. CIT(A) HAS HOWEVER DELETED THESE PENALTIES ON THE PREMISE THAT THE RECIPIENT COMPANI ES HAVE ALREADY PAID THE TOTAL TAX DUE AND THERE IS REASONABLE CAUS E FOR NON-DEDUCTION OR LOWER DEDUCTION. NOW THE REVENUE IS AGGRIEVED. 4. BOTH THE PARTIES HAVE REITERATED THEIR OLD STAND S BEFORE US. AT THE VERY OUTSET OF THE OPENING OF THE HEARING OF TH ESE APPEALS IT WAS STATED BY THE LD. A.R. SHRI M.L. PATODI THAT THE TR IBUNAL HAS DELETED THE RELATED PAYMENTS BY HOLDING THEM AS GENUINE AND THE TRIBUNAL HAS ALSO HELD THAT THE ASSESSEE WAS NOT REQUIRED TO DED UCT TAX AT SOURCE AS PER THE PROVISIONS OF SECTION 194J OF THE ACT AND A CCORDINGLY, THESE PENALTIES ARE LIABLE TO BE DELETED. 4 3. THE LD. CIT, DR COULD NOT CONTROVERT THE ABOVE F ACTUAL MATRIX. THEREFORE, AFTER CONSIDERING THE ABOVE FACTS AND AF TER PERUSING THE ORDER OF THE TRIBUNAL, WE ARE CONVINCED THAT THE AS SESSEE CANNOT BE TREATED AS AN ASSESSEE-IN-DEFAULT U/S 201(1A) OF TH E ACT. HENCE, NO PENALTY U/S 271C OF THE ACT CAN BE LEVIED ON THE AS SESSEE. IN THE GIVEN CASE, THE RECIPIENTS HAVE SHOWN THESE CHARGES AS IN COME AND HAVE ALSO PAID THEIR DUE TAXES THEREIN. ACCORDINGLY, WE CONF IRM THE IMPUGNED DELETION OF THESE PENALTIES AND DISMISS BOTH THE AP PEALS OF THE REVENUE. 3. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH APRIL, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR