Gen Pharma, Vijayawada V. THE CIT(A), Vijayawada

ITA 367/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6598 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 16-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Section: 201(1)

Judgement Text

ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.367/VIZAG/2016 ( / ASSESSMENT YEAR: 2008-09) M/S. GEN PHARMA, VIJAYAWADA CIT(APPEALS) VIJAYAWADA [PAN NO. HYDGO2389C ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI A.S.R.S.S. SIVA PRASAD, A.R. / RESPONDENT BY : SHRI D.J.P. ANAND, DR / DATE OF HEARING : 13.10.2017 / DATE OF PRONOUNCEMENT : 18.10.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A)}, VIJA YAWADA VIDE ITA NO.27,28,29 & 64/VJA/2013-14 DATED 31.3.2016 FOR TH E ASSESSMENT YEAR 2008-09. ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 2 2. THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON B USINESS IN PHARMACEUTICALS. THE ASSESSING OFFICER (A.O.) NOTI CED FROM THE RECORDS THAT THE DEDUCTOR M/S. GEN PHARMA, VIJAYAWADA (TAN: HYDGO2389C) IN FORM 26Q FOR QUARTERS 1,2 AND 3 OF THE FINANCIAL YE AR 2007-08 FILED ON 24.5.2008 AND FORM 26Q FOR QUARTER 1 OF THE FINANCI AL YEAR 2008-09 ON 12.11.2008, AND FROM TRACES (TDS PORTAL) THAT THE DEDUCTOR HAS MADE TDS DEFAULTS WHICH RESULTED IN TDS DEMAND U/S 201(1 )/201(1A) WHICH IS STATED TO BE TDS MISMATCH. FROM THE DEFAULT SUMMAR IES AND ALSO JUSTIFICATION REPORTS IT WAS NOTICED THAT THE DEMAN DS FOR CONCERNED QUARTERS ARE SHORT PAYMENT DUE TO CHALLAN MISMATCH AND INTEREST ON SHORT PAYMENT DETAILED AS UNDER: FINANCIAL YEAR QUARTER/FORM NO. CORRECTION STATEMENT FILED ON CORRECTION STATEMENT PROCESSED ON DEMAND AS ON DATE (RS.) REMARKS 2007 - 08 Q1/26Q 01.11.2012 25.11.2012 36,970 DEFAULT OF SHORT PAYMENT OWING TO CHALLAN MISMATCH: ` 18,696/-, INTEREST ON SHORT PAYMENT ` 18,275/- Q2/26Q 01.11.2012 10.09.2013 37,430 DEFAULT OF SHORT PAYMENT OWING TO CHALLAN MISMATCH: ` 19,525/-, INTEREST ON SHORT PAYMENT OF ` 17,905/- Q3/26Q -- -- 28,710 DEFAULT OF SHORT PAYMENT OWING TO CHALLAN MISMATCH OF ` 16,340/-, INTEREST ON SHORT PAYMENT OF ` 12,370/ - 2008-09 Q1/26Q -- 24.02.2013 18,350 DEFAULT OF SHOR T PAYMENT OWING TO CHALLAN MISMATCH OF ` 10,820/-, INTEREST ON SHORT PAYMENT OF ` 7,520/- ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 3 AN OPPORTUNITY WAS PROVIDED TO THE ASSESSEE FOR FI LING THE CORRECTION STATEMENT. ON EXPIRY OF STIPULATED PERI OD FOR FILING THE CORRECTION STATEMENT, THE A.O. TREATED THE ASSESSEE AS ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE INCOME TAX ACT , 1961 AND LEVIED THE INTEREST OF ` 1,21,450/- . HE ALSO LEVIED THE INTEREST U/S 201(1 A) OF THE ACT AMOUNTING TO ` 63,590/- ON ACCOUNT OF LATE PAYMENT FOR THE FINANCIAL YEARS 2007-08 & 2008-09 RESPECTIVELY. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) REQUESTED THE ASSESSEE TO CORRECT THE MISTAKES. SINCE THE ASSESSEE FAILED TO CORRECT THE MISTAKES AND NO CORRECTION STATEMENT WAS FILED BEFORE THE CI T(A), THE LD. CIT(A) DISMISSED THE APPEAL CONFIRMING THE ACTION OF THE A O AS UNDER: 5. I HAD PERUSED THE RELEVANT DETAILS. AS REGARDS VALIDITY OF ORDER DUE TO LIMITATION, THIS GROUND WAS INITIALLY WITHDRAWN AND SUBSEQUENTLY APPELLANT REQUESTED THE SAME TO BE TREATED AS NOT W ITHDRAWN. ACTION OF ASSESSING OFFICER IS JUSTIFIED, AS IN MY VIEW, APPE LLANTS CASE FALLS UNDER 201(3)(II) AS THE DEMANDS HAVE NOT BEEN RESOLVED OR CREDITS WAS NOT GIVEN DUE TO MISMATCH ETC. HENCE, DEMAND U/S 201(1 ) CAN BE RAISED WITHIN SIX YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH PAYMENT IS MADE. THUS, ACTION OF ASSESSING OFFICER IS IN ORDE R. APPELLANTS GROUNDS OF APPEAL FAILS ON THIS ISSUE. 5.1 DESPITE SEVERAL OPPORTUNITIES GIVEN BY ASSESSIN G OFFICER AS WELL AS DURING APPEAL PROCEEDINGS, APPELLANT SOUGHT TIME BU T DID NOT CORRECT5 THE MISTAKES TILL DATE I.E. THOUGH INITIAL HEARING WAS DONE IN OCTOBER, 2015, TILL NOW THE NECESSARY RECTIFICATIONS WERE NOT DONE AT A PPELLANTS END. THOUGH APPELLANT REQUESTED FOR SHORT ADJOURNMENT VI DE HIS LETTER DATED 24.2.2016 DURING APPELLATE PROCEEDINGS, NO SUCH COR RECTION STATEMENT WAS FILED OR PRODUCED TILL NOW. 5.2 AS PER THE SCREEN SHOT OF TRACES, THE DEMANDS A RE STILL PERSISTING DUE TO CHALLAN MISMATCH. AS THE DEDUCTOR DID NOT R ESOLVE THE ISSUE BY ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 4 FILING CORRECTION STATEMENTS FOR THE RELEVANT QUART ERS, I DISMISS ALL THE FOUR APPEALS. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS FILED APPEAL BEFORE THIS TRIBUNAL. THE LD. A.R. ARGUED T HAT THE RETURN WAS FILED ON 24.5.2008 AND THE A.O. HAS PASSED THE ORDE RS ON 25.2.2013 I.E. PASSED AFTER 3 YEARS FROM THE END OF FINANCIAL YEAR AND THE TIME LIMIT ALLOWED IS 2 YEARS FROM THE END OF THE FINANCIAL YE AR IN WHICH THE TDS REQUIRED TO BE DEDUCTED, AND THEREFORE, THE LD. A.R . ARGUED THAT THE ORDER PASSED BY THE A.O. WAS BARRED BY LIMITATION. HOWEVER, HONBLE DELHI HIGH COURT HELD THAT THE REASONABLE TIME LIMI T FOR INITIATING THE PROCEEDINGS U/S 201(1)/201(1A) IS 4 YEARS FROM THE END OF THE FY IN WHICH THE TDS IS DEDUCTIBLE AND THE AO HAS INITIATE D WITHIN THE TIME FRAME ALLOWED BY THE HONBLE DELHI HIGH COURT IN COMMISSIONER OF INCOME-TAX. V. HUTCHISON ESSAR TELECOME LTD,[2010] 323 ITR 230 (DE LHI), AND HONBLE HIGH COURT OF ALLAHABAD IN MASS AWASH (P.) LTD. V. COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) * , [2017] 83 TAXMANN.COM 306 (ALLAHABAD). THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS NOT TENABLE AND THE SAME IS DISMISSED. 5. THE NEXT GROUND OF THE ASSESSEE IS THAT THERE WA S A MISMATCH OF TDS CHALLANS DUE TO ERRORS COMMITTED BY THE BANKERS AND THE ASSESSEE AND THE ASSESSEE HAS FILED A RECTIFICATION PETITION BEFORE THE A.O. BUT THE RECTIFICATION WAS NOT CARRIED OUT TILL DATE, HENCE, THERE IS A DEMAND ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 5 OUTSTANDING WHICH RESULTED IN LEVY OF INTEREST U/S 201 & 201(1A) OF THE ACT. IF THE RECTIFICATIONS ARE CARRIED OUT THE DEM AND WOULD BE REDUCED RESULTING NIL DEMAND FOR THE INTEREST U/S 201 & 201 (1A), HENCE REQUESTED TO DIRECT THE AO TO CARRY OUT THE RECTIFI CATION. THE LD. CIT(A) HAS GIVEN OPPORTUNITY TO THE ASSESSEE TO CORRECT TH E MISTAKES BUT THE ASSESSEE DID NOT COMPLY WITH THE DIRECTIONS GIVEN B Y THE CIT(A). IN THIS CASE, THE ASSESSEE REQUIRED TO FURNISH THE TDS RETU RN CORRECTLY QUOTING THE PAN NO., HEAD AND SUB-HEAD AND ITO, TAN ETC. TH EN THE SYSTEM WOULD MAKE NECESSARY CORRECTIONS TO ALLOW THE CORRE CT AMOUNT OF CREDIT TO THE DEDUTEES. UNLESS THE ASSESSEE FILES THE RET URN OF INCOME CORRECTLY, THE CREDIT IS NOT ALLOWED IN THE CASE OF THE DEDUCTEE. THEREFORE, IT IS OBLIGATION ON THE PART OF THE ASSE SSEE TO FILE THE TDS RETURN CORRECTLY WITHOUT COMMITTING ERRORS. COMMIS SIONS & OMISSIONS MADE BY THE ASSESSEE IN THE TDS RETURN WOULD PUT TH E INTEREST OF THE DEDUCTEE ALSO IN JEOPARDY. THEREFORE, THOUGH THE T DS AMOUNTS ARE CREDITED TO THE GOVERNMENT ACCOUNT, NECESSARY RECTI FICATIONS TO BE CARRIED OUT BY THE ASSESSEE BY QUOTING CORRECT SECT IONS, MINOR AND MAJOR HEADS, PAN NUMBER, ETC. THEREFORE, HAVING FI LED THE RECTIFICATION PETITION BEFORE THE A.O., IT IS OBLIGATION ON THE P ART OF THE A.O. TO CARRY OUT THE NECESSARY RECTIFICATIONS. THEREFORE, WE DE EM IT FIT TO REMIT THE MATTER BACK TO THE FILE OF THE A.O. WITH A DIRECTIO N TO CARRY OUT THE ITA NO.367/VIZAG/2016 M/S. GEN PHARMA, VIJAYAWADA 6 NECESSARY RECTIFICATIONS AT THE EARLIEST. WE ALSO D IRECT THE ASSESSEE DEDUCTOR TO COOPERATE FULLY WITH THE DEPARTMENT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 18 TH OCT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 18.10.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT M/S. GEN PHARMA, D.NO. 11-9-15, MAJJI VARI STREET, VIJAYAWADA 2. / THE RESPONDENT THE ITO (TDS), WARD-3(1), VIJAY AWADA 3. + / THE CIT, VIJAYAWADA 4. + ( ) / THE CIT (A), VIJAYAWADA 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM