Chief Manager Branch-1, Bhubaneswar V. ACIT(TDS), Bhubaneswar

ITA 372/CTK/2011

• Counselvise Citation: 37222114 RSA 2011
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 30-08-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: N C PATTNAIK
• Keywords: TDS; Set aside

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM SL. NO ITA NO APPELLANT RESPNODENT ASSESSMENT YEAR 1. 372,373,374,375, 376 AND 377/C TK/201 1 CHIEF MANAGER, BRANCH I, LIC OF INDIA, BBSR ACIT (TDS) 2003 - 04 TO 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2 008 - 09 2 . 378,379,380,381, 382,383 AND 384/CTK/2011 CHIEF MANAGER, BRANCH II, LIC OF INDIA, BBSR - DO - 2001 - 02 2002 - 03 2003 - 04 2004 - 05 2006 - 07 2007 - 08 2008 - 09 3 . 385,386,387,388, 389, / CTK/2011 CHIEF MANAGER,BRANCH III, LIC OF INDIA, BBSR - DO - 2003 - 04, 2 0 0 4 - 05, 20 06 - 07, 2007 - 08 2008 - 09 4. 390 /CTK/2011 CHIEF MANAGER,LIC OF INDIA, PURI 2007 - 08 5. 391/CTK/2011 CHIF MANAGER, LIC OF INDIA, KHURDA. 2007 - 08 FOR THE APPELLANT: SHRI N.C.PATTNAIK, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 02.12.2011 DATE OF PRONOUNCEMENT : 22.12.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : ALL THESE APPEALS ARE FILED BY THE THREE DIFFERENT ASSESSEE S HAVING BEEN AGGRIEVED BY THE ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) CONFIRMING THE PENALTY U/S.271C OF THE INCOME - TAX ACT,1961 LEVIED AGAINST THE ASSESSEES FOR THE ASSESSMEN T YEARS AS MENTIONED IN CAUSE TITLE OF THIS ORDER. SINCE THE SE APPEALS HAVE RAISED COMMON GROUNDS, ALL THE SE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. BOTH THE PARTIES WERE HEARD REGARD ING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. ITA NOS. 372 TO 391 /CTK/2011 (GROUP CASES) 2 4. ON CAREFUL ANALYSIS OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT ORDERS U/S.201(1) AND 201(1A) HAVE BEEN PASSED AGAINST THE ASSESSEES AND AFTERWARDS, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS FOR NON - DEDUCTION OF TDS FROM THE CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCE PAID TO THEIR DEVELOPMENT OFFICERS. AGGRIEVE D, THE ASSESSES HAVE FILED APPEALS BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) AND BEING UNSUCCESSFUL HAVE COME IN APPEALS BEFORE THE TRIBUNAL. 5. THE APPEALS FILED BY THE ASSESSEES CHIEF MANAGER,BRANCH I AND SR.BRANCH MANAGER, BRANCH I, LIC OF INDIA AGAINST THE ORDERS PERTAINING TO THE ORDERS U/S.201(1) AND 201(1A) WERE DISPOSED OF BY THIS TRIBUNAL VIDE COMMON ORDER DT.23.9.2011 IN ITA NOS.347 TO 356/CTK/2010, WHEREIN IT WAS FOUND BY THE TRIBUNAL THAT SO FAR AS THE LEVY OF INTEREST U/S.201( 1A), IN VIEW OF THE BONAFIDE DOUBT ENTERTAINED BY THE CBDT CIRCULAR AND THE STAY ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT OF ORISSA, THE LEVY OF INTEREST U/S.201(1A) WAS NOT JUSTIFIED FOR THE PERIOD FROM 15.1.2004 TO 31.1.2006 AND THE SAID ORDER OF T HE TRIBUNAL HAS NOT TAKEN IN FURTHER PROCEEDINGS BEFORE THE HIGHER FORUMS. IT IS ALSO A FACT THAT SOON AFTER THE DISPOSAL OF THE MATTER BY THE HONBLE HIGH COURT OF ORISSA, THE ASSESSEES HAVE PAID THE DEFICIT TDS ALONG WITH INTEREST THEREON TO THE GOVERNME NT. THE TRIBUNAL HAS FOLLOWED ITS ORDER DT. 25.08 .2011 RENDERED IN THE CASE OF ITA NOS.285,286,287,288,289,290 AND 291/CTK/2010 IN THE CASE OF BRANCH MANAGER, BARANCH - II, LIC OF ORISSA, BHUBANESWAR V. ACIT(TDS), BHUBANESWAR FOR THE AYS 2001 - 02, 2002 - 03,2 003 - 04,2004 - 05,2005 - 06,2006 - 07 AND 2008 - 09 DISPOSED OF BY THIS TRIBUNAL IN A COMMON ORDER. ITA NOS. 372 TO 391 /CTK/2011 (GROUP CASES) 3 6. THE LEARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED CONTENDING INTERALIA THAT THE ASSESSEE HAS MADE THE PAYMENT OF SHORT DEDUCTED TDS ALONG WITH INTEREST SOON AF TER PASSING OF THE ORDER BY THE HONBLE HIGH COURT OF ORISSA IN THE CONCERNED MATTER, WHEREIN HONBLE HIGH COURT HAS STAYED THE COLLECTION OF TDS BY THE ASSESSEE. BUT THE DEPARTMENT HAS INVOKED THE PROVISIONS OF SECTION 271C AGAINST THE ASSESSEES FORGETTIN G FOR A MOMENT THAT THIS IS NOT NECESSARILY A CONSEQUENTIAL FOR RAISING DEMAND FOR TDS AND INTEREST THEREON. THE DEPARTMENTAL AUTHORITIES APART FROM FINDINGS IN THE ORDERS HAVE NOT BROUGHT ANY OTHER MATERIAL SHOWING THE LIABILITY OF THE ASSESSEE FOR LEVY O F PENALTY U/S.271C OF THE INCOME - TAX ACT,1961. THE PROVISIONS CONTAINED IN SECTION 271C ARE NOT ENVISAGING ANY CONSEQUENTIAL LEVY OF PENALTY SIMPLY BECAUSE THERE IS DEMAND FOR SHORT DEDUCTION OF TDS AND INTEREST THEREON AGAINST THE ASSESSEES. THE ASSESSEES HAVING PAID THE SHORT DEDUCTION OF TDS ALONG WITH INTEREST SOON AFTER THE STAY ORDER WAS VACATED BY THE HONBLE HIGH COURT OF ORISSA, THE ASSESSEES ARE NOT LIABLE FOR PENALTY U/S.271C OF THE INCOME - TAX ACT,1961. THEREFORE, HE SOUGHT FOR CANCELLATION OF TH E PENALTY SO LEVIED U/S.271C BY ALLOWING THE APPEALS OF THE ASSESSEES. 7. CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY SUPPORTED THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES AND SOUGHT FOR UPHOLDING THE SAME BY DISMISSING THE APPEALS OF THE ASSESSE ES. 8. ON CAREFUL ANALYSIS OF THE ORDERS PASSED BY THE LEARNED CIT(A) , IT IS FOUND THAT NO DOUBT THERE IS DEMAND RAISED BY THE DEPARTMENTAL AUTHORITIES AGAINST THE ASSESSEES U/S.201(1) AND 201(1A) OF THE INCOME - TAX ACT,1961. BUT THE ASSESSEES HAD AGITATED AGAINST THAT ORDERS BEFORE THIS FORUM AND ULTIMATELY THE TRIBUNAL HAS HELD THAT THE DEMAND RAISED U/S.201(1) IS PERFECTLY JUSTIFIED. SO FAR AS THE LEVY OF INTEREST U/S.201(1A), IN VIEW OF THE ITA NOS. 372 TO 391 /CTK/2011 (GROUP CASES) 4 BONAFIDE DOUBT ENTERTAINED BY THE ASSESSEES ON THE CDBDT CIRCUL AR AND ALSO THE STAY ORDER OF THE HONBLE ORISSA HIGH COURT, WE HOLD THAT THE LEVY OF INTEREST U/S.201(1A) IS NOT JUSTIFIED FOR THE PERIOD FROM 15.1.2004 TO 31.1.2006. SINCE THE ASSESSEES HAVE PAID THE SHORT DEDUCTED TDS ALONG WITH INTEREST THEREON AFTER T HE ORDER BY THE HONBLE HIGH COURT VACATING THE STAY ORDER, THEREFORE, THE CONDUCT OF THE ASSESSEE CLEARLY INDICATES THAT THEY ARE NOT HAVING ANY ULTERIOR MOTIVE IN SHORT DEDUCTING THE TDS ON THE CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCES PAID TO THEI R DEVELOPMENT OFFICERS . THE ORDERS U/S.201(1) AND 201(1A) PASSED AGAINST THE ASSESSEE HAD BEEN CHALLENGED BY THE ASSESSEES AND ULTIMATELY THIS TRIBUNAL THOUGH UPHELD THE ORDER U/S.201(1) HAS SET ASIDE THE ORDERS U/S.201(1A) OF THE INCOME - TAX ACT,1961 OBSER VING THEREIN THAT THE INTEREST IS LEVIABLE SOON AFTER VACATION OF THE STAY ORDER BY THE HONBLE HIGH COURT OF ORISSA. THE PENALTY U/S.271C IS NOT INVARIABLY CONSEQUENTIAL TO THE ASSESSMENTS U/S.201(1) AND 201(1A) OF THE INCOME - TAX ACT,1961. SINCE THE ASSES SEES ARE ONLY DISCHARGING THE OFFICIAL DUTIES WHILE ACTING AS PER THE PROVISIONS OF THE INCOME - TAX ACT,1961 AND AS THEY HAVE ENTERTAINED A REAL DOUBT ABOUT THE DEDUCTIBILITY OF TDS ON THE PAYMENTS OF CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCE PAID TO T HEIR DEVELOPMENT OFFICERS AND THEREFORE FILED APPEALS BEFORE ALL THE FORUMS AND ULTIMATELY THIS TRIBUNAL HAS HELD THAT ASSESSMENT U/S.201(1 AGAINST THE ASSESSEE IS VALID BUT SET ASIDE THE ASSESSMENT MADE U/S.201(1A) OF THE INCOME - TAX ACT,1961 AGAINST THE A SSESSEE. THEREFORE, UNDER THESE FACTUAL MATRIX, WE ARE OF THE CONSIDERED VIEW THAT SINCE THE CONDUCT OF THE ASSESSEES IS BONAFIDE AND NOT HAVING ANY GAIN WHATSOEVER IN SHORT DEDUCTING THE TDS ON CONVEYANCE AND ADDITIONAL CONVEYANCE ALLOWANCES PAID TO THEIR DEVELOPMENT OFFICERS, LEVY OF PENALTY U/S.271C OF THE INCOME - TAX ACT,1961 ITA NOS. 372 TO 391 /CTK/2011 (GROUP CASES) 5 AGAINST THE ASSESSEES IS NOT SUSTAINABLE FOR LEGAL SCRUTINY. THEREFORE, WE CANCEL THE SAID PENALTY BY ALLOWING THE APPEALS OF THE ASSESSEE. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. SD/ - SD/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 22.12.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. C OPY OF THE ORDER FORWARDED TO : 1 . THE APPELLANT: CHIEF MANAGER, BRANCH - 1, BRANCH - II AND BRANCH III , LIC OF ORISSA, BHUBANESWAR. 2. THE RESPONDENT: ACIT(TDS), BHUBANESWAR 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY , BY ORDER, SENIOR PRIVATE SECRETARY.