ACIT CEN -1, MUMBAI V. BAJAJ AUTO LTD, MUMBAI

ITA 3640/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48959 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1999-2000
• Appeal Filed On: 07-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Salary income
• Section: 143(3); 234B; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NOS. 3638, 3639, 3640, 3641 & 3642/MUM/2010 (ASSESSMENT YEARS: 1998-99, 1990-91, 1999-2000, 2001-02 & 2003-03) ACIT - LTU M/S. BAJAJ AUTO LIMITED 28TH FLOOR, CENTRE-1 BAJAJ BHAVAN, 226 NARIMAN WORLD TRADE CENTRE, CUFFE VS. POINT , MUMBAI 400020 PARADE , MUMBAI 400005 PAN - AAACB 3370 K APPELLANT RESPONDENT APPELLANT BY: SMT. ASHIMA GUPTA RESPONDENT BY: SHRI KIRTI KAMDAR O R D E R PER T.R. SOOD, A.M. THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGA INST SEPARATE ORDERS OF THE CIT(A) XXIV, MUMBAI DATED 11.02.2010 IN RESP ECTIVE ASSESSMENT YEARS. 2. REVENUE HAS RAISED THE FOLLOWING COMMON GROUND IN A LL THE ASSESSMENT YEARS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DIRECTING THE A.O. NOT TO R ECOVER THE AMOUNT FROM THE ASSESSEE TO THE EXTENT OF TDS CERTI FICATE NOT RECEIVED BY THE ASSESSEE THOUGH THE ASSESSEE FAILED TO COMPLY IN RESPECT OF HIS LIABILITY TOWARDS HIS CLAIM EVEN AFT ER LAPSE OF SUBSTANTIAL PERIOD OF TIME. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD C LAIMED CREDIT FOR TAX DEDUCTED AT SOURCE BUT COULD NOT SUBMIT ALL THE CER TIFICATES. IT WAS PLEADED THAT WHATEVER CERTIFICATES HAVE NOT COME THAT ISSUE MAY BE KEPT IN ABEYANCE. IT SEEM THAT BECAUSE OF THIS ISSUE AND SO ME OTHER ISSUES THE MATTER TRAVELLED BEFORE THE CIT(A) AND THE ISSUES W ERE DECIDED. WHEN THE REVENUE PRESSED FOR COLLECTION OF DEMAND ASSESSEE A GAIN FILED APPLICATION UNDER SECTION 154 FOR CLAIMING THE CREDIT OF TDS WI THOUT FILING THE TDS CERTIFICATES IN SOME CASES. CREDIT FOR TAX DEDUCTED AT SOURCE WAS GIVEN ITA NOS. 3638 TO 3642/MUM/2010 M/S. BAJAJ AUTO LIMITED 2 WHEREVER CERTIFICATES WERE FILED. HOWEVER, NO CREDI T WAS GIVEN WHERE THE CERTIFICATES WERE NOT FILED. SOME OF THE APPLICATIO NS UNDER SECTION 154 WERE DISMISSED BEING BEYOND 4 YEARS. THE LEARNED CIT(A) HAS HELD THAT THE APPLICATION IS NOT BEYOND 4 YEARS AND SINCE THIS IS SUE HAS NOT BEEN AGITATED BEFORE US AND, THEREFORE, WE ARE NOT REQUIRED TO AD JUDICATE THE SAME. 4. THE CIT(A) FINALLY ADJUDICATED THE ISSUE VIDE PARA 1.3 IN A.Y. 1998-99, WHICH IS AS UNDER: - 1.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AR. I AM OF THE VIEW THAT THE APPELLANT FILED APPLICATION AGAIN ST ORDER GIVING EFFECT TO THE COMMISSIONER OF INCOME-TAX (APPEALS) WELL WITHIN THE TIME LIMIT PRESCRIBED UNDER SECTION 154 OF THE ACT. FURTHER, THE APPELLANT HAD TAKEN UP THE SAID ISSUE EVEN IN THE A PPEAL AGAINST 143(3) ORDER. INSPITE OF CLEAR DIRECTIONS OF THE CO MMISSIONER OF INCOME-TAX (APPEAL) THE ASSESSING OFFICER DID NOT G RANT CREDIT AND THE REASONS FOR NOT DOING SO ARE ALSO NOT AVAILABLE ON RECORD. IN LIGHT OF THE ABOVE THE ASSESSING OFFICER CANNOT PICK THE APP ELLANTS LETTER DATED 29 TH MARCH, 2007 BY IGNORING ALL EARLIER CORRESPONDENCE TO EVALUATE THE TIMELINESS OF SUCH ACTION. THIS IS A C LEAR CASE OF APPELLANT BEING DENIED OF HIS RIGHTFUL CLAIM. IN MY VIEW THE ISSUE IS NO LONGER SUBJUDICE. ACCORDINGLY, I DIRECT THE AO T O VERIFY THE CLAIM OF THE APPELLANT AND GIVE REQUIRED CREDIT. IN CASE FOR ANY REASON CREDIT FOR THE SAME IS NOT GIVEN THEN, I DIRECT THE ASSESS ING OFFICER NOT TO RECOVER THE AMOUNT TO THE SAID EXTENT AND TO KEEP T HE SAME IN ABSENCE AS PER THE DECISION OF THE BOMBAY HIGH COU RT IN CASE OF YASHPAL SANHNI VS. REKHA HAJARNAVIS, ASSISTANT COMM ISSIONER OF INCOME-TAX & OTHERS. 5. BEFORE US THE LEARNED D.R. SUBMITTED THAT AS PER SE CTION 199 REVENUE WAS BOUND TO GIVE CREDIT FOR ANY TAX DEDUCTED ON BE HALF OF THE ASSESSEE WHICH HAS ALREADY BEEN DEPOSITED WITH THE CENTRAL GOVERNM ENT. OBVIOUSLY SUCH CREDIT TO BE GIVEN IF CERTIFICATES WERE FILED, WHIC H ARE REQUIRED TO BE ISSUED IN TERMS OF SECTION 203 OF THE ACT. HE CONTENDED THAT THE LEARNED CIT(A) HAS GIVEN A DIRECTION FOLLOWING THE DECISION OF THE HON 'BLE BOMBAY HIGH COURT IN THE CASE OF YASHPAL SANHNI VS. ACIT & ORS. 293 ITR 593 TO KEEP THE BALANCE OF PAYMENT IN ABEYANCE, WHICH IS CONTRARY TO THE PR OVISIONS OF SECTION 199 R.W.S. 203. IN ANY CASE, IN CASE OF YASHPAL SANHNI SALARY SLIPS, BANK STATEMENT, ETC. WERE AVAILABLE AND THAT IS WHY THE HON'BLE HIGH COURT OBSERVED THAT BALANCE OF DEMAND SHOULD NOT BE RECOV ERED BUT IN RELATION ASSESSEE NO EVIDENCE HAS BEEN GIVEN THAT TAX HAS RE ALLY BEEN DEDUCTED. THE RATIO OF THE DECISION WOULD NOT BE APPLICABLE TO TH E INSTANT CASE. ITA NOS. 3638 TO 3642/MUM/2010 M/S. BAJAJ AUTO LIMITED 3 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR ASSESSEE REFERRED TO THE PROVISIONS OF SECTION 205 AND POINTED OUT THAT ONCE TAX HAS BEEN DEDUCTED THEN OF COURSE IN THE ABSENCE OF EVIDENCE CREDIT MA Y NOT BE GIVEN BUT AT THE SAME TIME DEMAND CAN ALSO NOT BE ENFORCED BECAUSE T HERE IS CLEAR BAR IN SECTION 205. THE HON'BLE BOMBAY HIGH COURT CLEARLY HELD IN THE CASE OF YASHPAL SAHNI (SUPRA) THAT ONCE TAX WAS DEDUCTIBLE WHETHER THE SAME HAS BEEN PAID TO THE CENTRAL GOVERNMENT OF NOT, THE SAM E COULD NOT BE RECOVERED FROM THE PERSON AGAINST WHOM SUCH TAX HAS BEEN DEDUCTED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. IN CASE OF YASHPAL SAHNI VS. ACIT & ORS. 293 ITR 539(BOM) ASSESSEE WAS APPOINTED AS MANAGING DIRECTOR OF A COMPANY, WHICH DEDUCTED TAX AT SOURCE FROM HIS SALARY. HOWEVER, TDS CERTIFICATES WERE NOT ISSUED. SOME DISPUTE AROSE BETWEEN ASSESSEE AND HIS EMPLOYER AND ULTIMATELY SE RVICES OF THE ASSESSEE WERE TERMINATED. ASSESSEE FILED RETURN AND CLAIMED THE AMOUNT OF TAX DEDUCTED AT SOURCE. CREDIT FOR THE SAME WAS NOT GIV EN IN THE ABSENCE OF CERTIFICATE AND EVEN INTEREST UNDER SECTION 234B AN D 234C WAS ALSO LEVIED. EVEN THE RECTIFICATION APPLICATION UNDER SECTION 15 4 WAS NOT ENTERTAINED. ULTIMATELY PENALTY PROCEEDINGS UNDER SECTION 221(1) WERE INITIATED AND ASSESSEE FILED WRIT PETITION BEFORE THE HON'BLE BOM BAY HIGH COURT. THE HON'BLE HIGH COURT, REPRODUCING PROVISIONS OF SECTI ON 205, OBSERVED THAT ONCE IT IS ESTABLISHED THAT TAX HAS BEEN DEDUCTED A T SOURCE FROM THE SALARY OF THE EMPLOYEE THEN BAR UNDER SECTION 205 OF THE A CT COMES INTO OPERATION. VIDE PARA 22 IT WAS OBSERVED AS UNDER: - 22. IN THE PRESENT CASE, THOUGH RESPONDENT NO. 6 H AS DEDUCTED THE TAX AT SOURCE FROM THE SALARY INCOME OF THE PET ITIONER, RESPONDENT NO. 6 HAS NOT ISSUED THE TDS CERTIFICATE IN FORM NO . 16 TO THE PETITIONER. AS A RESULT, THE PETITIONER IS NOT ENTITLED TO AVAI L CREDIT OF THE TAX DEDUCTED AT SOURCE. HOWEVER, ONCE IT IS ESTABLISHED THAT THE TAX HAS BEEN DEDUCTED AT SOURC E, THE BAR UNDER SECTION 205 OF THE ACT COMES INTO OPERATION A ND THE REVENUE IS BARRED FROM RECOVERING THE TDS AMOUNT ON CE AGAIN FROM THE EMPLOYEE FROM WHOSE INCOME, THE TDS AMOUNT HAS BEEN DEDUCTED . IT IS PERTINENT TO NOTE THAT THE PURPOSE OF ISSUI NG THE TDS CERTIFICATE UNDER SECTION 203 OF THE ACT IS TO ENABLE THE ASSESSEE TO AVAIL CREDIT OF THE TAX DEDUCTED AT SOURCE IN TH E RELEVANT ASSESSMENT YEAR. IF THE TDS CERTIFICATE IS NOT ISSU ED, THEN UNDER SECTION 199 OF THE ACT, THE ASSESSEE FROM WHOSE INC OME, TAX HAS BEEN DEDUCTED AT SOURCE WILL NOT BE ENTITLED TO TAKE CRE DIT OF THE SAID ITA NOS. 3638 TO 3642/MUM/2010 M/S. BAJAJ AUTO LIMITED 4 AMOUNT. IN THAT EVENT, ON ACCOUNT OF THE NON-AVAILA BILITY OF THE CREDIT, THE ASSESSEE WOULD BE LIABLE TO PAY THE TAX ONCE AG AIN EVEN THOUGH THE TAX WAS DEDUCTED AT SOURCE. THUS, IT WOULD BE A CASE OF DOUBLE TAXATION WHICH IS NOT PERMISSIBLE IN LAW. TO AVOID SUCH ANOMALY, SECTION 205 HAS BEEN ENACTED, TO THE EFFECT THAT, O NCE THE TAX IS DEDUCTED AT SOURCE BY THE EMPLOYER-COMPANY, THEN, T HE PERSON FROM WHOSE INCOME, THE TAX HAS BEEN DEDUCTED AT SOURCE S HALL NOT BE CALLED TO PAY THE SAID TAX AGAIN. FROM THE LANGUAGE OF SECTION 205 OF THE ACT, IT IS CLEAR THAT THE BAR OPERATES A S SOON AS IT IS ESTABLISHED THAT THE TAX HAS BEEN DEDUCTED AT SOURC E AND IT IS WHOLLY IRRELEVANT AS TO WHETHER THE TAX DEDUCTED AT SOURCE IS PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT OF NOT AND WHETHER THE TDS CERTIFICATE IN FORM NO. 16 HAS BEEN ISSUED OR NOT . ALSO THE MERE FACT THAT THE EMPLOYER MAY NOT ISSU E THE TDS CERTIFICATE TO THE EMPLOYEE DOES NOT MEAN THAT THE LIABILITY OF THE EMPLOYER CEASES. THE LIABILITY TO PAY INCOME-TAX IF DEDUCTED AT SOURCE IS UPON THE EMPLOYER. THE HIGHLIGHTED PORTIONS VERY CLEARLY SHOWS THAT TH E BAR UNDER SECTION 205 WOULD OPERATE AS SOON AS IT IS ESTABLISHED THAT TAX HAS BEEN DEDUCTED AT SOURCE. THEREFORE, IT IS CLEAR THAT THERE HAS TO BE SOME EVIDENCE SHOWING THAT TAX HAS BEEN REALLY DEDUCTED, EVEN IF TDS CERTIFICA TES ARE NOT THERE. THEREFORE, IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE A.O. WITH A DIRECTION TO REQUEST THE ASSESSEE TO FURNISH SOME EVIDENCE TO THE SATISFACTI ON OF THE A.O. TO SHOW THAT TAX HAS REALLY BEEN DEDUCTED BY THE OTHER PART Y. CREDIT FOR THE SAME MAY NOT BE GIVEN TILL THE TDS CERTIFICATES ARE FILE D BUT IF ASSESSEE IS ABLE TO FURNISH SOME EVIDENCE BY WHICH THE A.O. IS SATISFIE D THAT TAX HAS REALLY BEEN DEDUCTED THEN REVENUE SHOULD KEEP THE DEMAND IN ABE YANCE TILL THE TIME SUCH CERTIFICATES ARE FILED. 8. IN THE RESULT, APPEALS OF THE REVENUE ARE ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY 2011. SD/- SD/- (R.V. EASWAR) (T.R. SOOD) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 27 TH MAY 2011 ITA NOS. 3638 TO 3642/MUM/2010 M/S. BAJAJ AUTO LIMITED 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIV, MUMBAI 4. THE CIT LTU, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.