Executive Engineer, Nainital V. ITO (TDS), Nainital

ITA 3631/DEL/2011

• Counselvise Citation: 363120114 RSA 2011
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 25-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 3631/DEL/2011 ASSESSMENT YEAR: 2008-09 EXECUTIVE ENGINEER, VS. INCOME-TAX OFFICER, TD ND DIVISION, PWD, HALDWANI, NEW DELHI. NAINITAL. (PAN: MRTNO0702C) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MS SAI NI, ADV. RESPONDENT BY: SHRI ROHIT GARG, SR. DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF ASSESSEE AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 26.04.2011 PASS ED FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSE E ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTI VE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE CHARGING OF INTEREST AMOUNT ING TO RS.27,629 UNDER SEC. 201(1A) OF THE INCOME-TAX ACT, 1961 ON ACCOUNT OF DELAYED PAYMENT OF TDS. 2. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE IS THE EXECUTIV E ENGINEER, NATIONAL HIGH AUTHORITY DIVISION, PWD, HALDWANI, NAINITAL WHICH I S A STATE GOVERNMENT PUBLIC WORKS DEPARTMENT OF THE STATE OF UK. THE DEP ARTMENT USED TO GET 2 CIVIL WORK DONE THROUGH VARIOUS CONTRACTORS AND IN LIEU OF SUCH WORK, IT WAS SUPPOSED TO MAKE THE PAYMENT. WHILE MAKING THE PAYM ENT, IT HAS TO DEDUCT TDS. ACCORDING TO THE ASSESSING OFFICER, THERE WAS A DELAY IN DEPOSITING THE AMOUNT OF TDS DEDUCTED BY THE ASSESSEE. THE CALCULA TION OF SUCH AMOUNT HAS BEEN PLACED ON PAGE 18 TO 26 OF THE PAPER BOOK IN A TABULAR FORM. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT T HE TDS RETURNS WERE REGULARLY FILED BY THE DEPARTMENT. THERE WAS NO DEF AULT IN THE PAST. THE TDS WAS DULY DEDUCTED. IT WAS DEPOSITED IN THE GOVERNME NT TREASURY. THERE IS NO DELIBERATE ATTEMPT AT THE END OF THE ASSESSEE TO CO MMIT A DEFAULT WITHIN THE MEANING OF SEC. 201(1A) OF THE ACT. THE DEPARTMENT WAS FOLLOWING A CONSISTENT POLICY WHEREBY IT USED TO MAKE THE PAYME NT THROUGH CHALLAN IN THE GOVERNMENT TREASURY AT THE END OF EVERY MONTH, DETAILS OF SUCH CHALLAN WAS BEING CARVED OUT AND A DEPOSIT WAS MADE IN THE FIRST WEEK. HE ALSO POINTED OUT THAT MONEY WAS NOT USED FOR ANY OTHER P URPOSES. THEREFORE, CONSIDERING THE HARDSHIP AT THE ADMINISTRATION LEVE L, THE INTEREST OUGHT NOT TO BE CHANGED. ALTERNATIVELY, HE DREW OUR ATTENTION TO WARDS PAGE NO.27 OF THE PAPER BOOK, WHEREIN ASSESSEE HAS PLACED ON RECORD T HE CALCULATION EXHIBITING THE PERIOD OF DELAY ALLEGED TO HAVE BEEN COMMITTED FOR MAKING THE PAYMENT IN THE TREASURY. IN THESE DETAILS, ASSESSEE HAS PLA CED ON RECORD THE PERIOD CALCULATED BY THE ITO, TDS, HALDWANI AND THE PERIOD OF DEFAULT SHOWN BY ACIT, TDS, DEHRADUN. ACCORDING TO THE LEARNED COUNS EL FOR THE ASSESSEE AS 3 PER THE DEPARTMENT OF THE STATE GOVERNMENT, THE ALL EGED INTEREST COULD BE RS.9501. LEARNED ITO, TDS HAS WORKED OUT IT AT RS.2 7,629 WHEREAS LEARNED ACIT, TDS HAS WORKED OUT THE INTEREST AT RS.17,530. HE PRAYED THAT THIS ISSUE BE REMITTED TO THE FILE OF THE ASSESSING OFFI CER FOR RECONCILIATION AND READJUDICATION. 3. ON THE OTHER HAND, LEARNED DR RELIED UPON THE OR DERS OF THE REVENUE AUTHORITIES BELOW. HE POINTED OUT THAT THE ITAT HAS NO JURISDICTION TO CONDONE THE CHARGING OF INTEREST ON REASONABLE CAUS E, IF ASSESSEE HAS COMMITTED A DEFAULT THEN IT HAS TO PAY THE INTEREST UNDER SEC. 201(1A) OF THE ACT. IT IS COMPENSATORY IN NATURE AND MANDATORY. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. RULE 30 OF THE IT RULES, 1962 PRO VIDES THAT THE TIME AND MODE OF PAYMENT TO GOVERNMENT ACCOUNT OF TAX DEDUCT ED AT SOURCE OR TAX PAID UNDER SUB-SECTION (1A) OF SEC. 192 OF THE ACT. THE SUB-CLAUSE (A) OF SUB-RULE-1 APPLICABLE AT THAT RELEVANT POINT OF TIM E PROVIDES THAT IN THE CASE OF DEDUCTION BY OR ON BEHALF OF THE GOVERNMENT , ON THE SAME DAY, MEANING THEREBY, ASSESSEE WAS SUPPOSED TO DEPOSIT T HE TDS DEDUCTED BY IT ON THE SAME DAY. SECTION 201(1A) OF THE ACT PROVIDE S FOR CHARGING OF INTEREST IF ASSESSEE HAS COMMITTED ANY DEFAULT WITH IN THE MEANING OF SEC. 201. THIS SECTION NOWHERE POSTULATES THE CONDITIONS THAT ASSESSING OFFICER 4 OR HIGHER APPELLATE AUTHORITY WOULD CONDONE THE DEF AULT COMMITTED BY AN ASSESSEE FOR LEVYING OF INTEREST ON ACCOUNT OF REAS ONABLE CAUSE. IN OTHER WORDS, IF AN ASSESSEE HAS COMMITTED A DEFAULT THEN IT HAS TO PAY THE INTEREST. WE DO NOT HAVE ANY POWER TO WAIVE SUCH INTEREST OR LEARNED COUNSEL FOR THE ASSESSEE WAS UNABLE TO BRING TO OUR NOTICE ANY SECT ION OF INCOME-TAX ACT WHICH INFUSE ANY POWER TO THE ITAT FOR WAIVING SUCH INTEREST. THEREFORE, AS FAR AS CHARGING OF INTEREST IS CONCERNED, WE DO NOT FIND ANY FORCE IN THE ARGUMENTS RAISED BY THE LEARNED COUNSEL FOR THE ASS ESSEE. HOWEVER, AFTER TAKING INTO CONSIDERATION THE DETAILS PLACED ON PAG E 27, WE ARE OF THE VIEW THAT THERE IS DISCREPANCY IN QUANTIFICATION OF THE AMOUNTS VIS--VIS THE DEFAULT PERIOD. WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. LEARNED ASSESSING OFFICER SHALL PRO VIDE AN OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE CALCULATING THE NUMBE R OF DAYS ASSESSEE HAS COMMITTED A DEFAULT. THE ASSESSEE WILL ALSO BE AT L IBERTY TO DEMONSTRATE THE QUANTIFICATION OF INTEREST REQUIRED TO BE CHARGED F ROM IT. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30.09.2011 SD/- SD/- ( K.D. RANJAN ) ( RAJP AL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 30 /09/2011 MOHAN LAL 5 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR