The Addl. Superintending Engg. (DDO), Hoshiarpur V. The Income Tax Officer, Jalandhar

ITA 387/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0609 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 16-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A N MISRA
• Assessee Lawyers: SACHIN MALHOTRA
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JA LANDHAR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS.385 TO 387(ASR)/2015 ASSESSMENT YEAR: 2010-11 TO 2012-13 ADD L . SUPERINTENDIG ENGG. (DDO) PUNJAB POWER CORPORATION LTD. CITY DIVISION, PARBHAT CHOWK, HOSHIARPUR. PAN: AAFCP-4714J VS. INCOME TAX OFFICER (TDS) JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SACHIN MALHOTRA ( ADV.) RESPONDENT BY: SH. A.N.MISRA (DR) DATE OF HEARING: 23.06. 2016 DATE OF PRONOUNCEMENT : 30.06.2016 ORDER PER T.S.KAPOOR (AM): THIS IS A BUNCH OF THREE APPEALS FILED BY ASSESSEE AGAINST THE CONSOLIDATED ORDER OF LEARNED CIT(A) DATED 19.05.20 15 FOR ASST. YEARS: 2010-11 TO 2012-13 RESPECTIVELY. 2. THESE APPEALS CONTAIN A COMMON ISSUE AND THESE W ERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ORDE R U/S 201(1)/201(1A) OF THE INCOME TAX ACT, IS THAT AN INSPECTION WAS CA RRIED OUT AT THE OFFICE ITA NO.38 5 TO 387 (ASR)/2015 ASST. YEARS: 2010-11 TO 2012-13 2 PREMISES OF THE PERSON RESPONSIBLE AND IT WAS FOUND THAT ASSESSEE HAD DEDUCTED TDS @ 2% FROM M/S J.D. REFERIGERATION & E LECTRICALS AND M/S. CCS TECHNERGY LIMITED. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE @ 10% A S THE SERVICES PROVIDED TO THE ASSESSEE BY THE PAYEES WERE TECHNIC AL IN NATURE. THE ASSESSEE FILED COPIES OF CONTRACTS ENTERED INTO WIT H THE PAYEES, HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION S OF ASSESSEE AND HELD THE ASSESSEE WAS IN DEFAULT FOR SHORT DEDUCTION OF TAX. 4. AGGRIEVED WITH THE ASSESSMENT ORDER THE ASSESSEE FILED APPEALS BEFORE LEARNED CIT(A). THE LEARNED CIT(A) RELIED UP ON THE CASE LAW OF M/S HINDUSTAN COCA COLA BEVERAGES (P) LIMITED VS. CIT R EPORTED AT (2007) 293 ITR 226 (SC) AND HELD THAT IN RESPECT OF TWO YE ARS THE PAYEES HAD PAID DUE TAXES, THEREFORE, AGAIN TAXES CANNOT BE RE COVERED AND IN RESPECT OF ONE YEAR HE REMITTED BACK THE FILE TO THE OFFICE OF ASSESSING OFFICER FOR EXAMINATION AS TO WHETHER THE PAYEE HAD PAID TAXES OR NOT. 5. THE LEARNED CIT(A), HOWEVER, DISMISSED THE GROUN D OF APPEAL OF ASSESSEE REGARDING ITS STAND THAT ASSESSEE WAS NOT ENGAGED IN PROVIDING TECHNICAL SERVICES AND, THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, THE ASSESSEE HAS TAKEN FOUR GROUNDS O F APPEAL OUT OF WHICH GROUND NOS.2 & 3 HAS ALREADY BEEN DECIDED BY LEARNED CIT(A) IN FAVOUR OF ASSESSEE, THEREFORE, THESE GROUNDS OF APP EAL ARE DISMISSED. 7. AS REGARDS GROUND NO.1, REGARDING GRIEVANCE OF A SSESSEE FOR TREATING THE CONTRACTS LIABLE FOR TDS FOR CATEGORY OF PERSONS ENGAGED IN ITA NO.38 5 TO 387 (ASR)/2015 ASST. YEARS: 2010-11 TO 2012-13 3 PROVIDING TECHNICAL SERVICES, WE FIND THAT DURING A SSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED COPIES OF WORKS CONTRACT ENT ERED INTO BETWEEN M/S J.D. REFERIGERATION AND ELECTRICALS, AND M/S CCS TE CHNERGY LIMITED. THE ASSESSING OFFICER HAS HIMSELF REPRODUCED THE SCOPE OF WORK FROM SUCH WORKS CONTRACT WHICH FOR THE SAKE OF COMPLETENESS A RE REPRODUCED BELOW. 3. I HAVE CAREFULLY CONSIDERED THE REPLY FURNISHED BY THE PR WITH REFERENCE TO ALL THE FACTS, MATERIAL AND EVIDENCE AVAILABLE ON R ECORD. AS REGARDS THE CONTRACT GIVEN TO M/S J.D. REFERIGERATIN & ELECTRICALS, GAHU N ROAD, BALACHAUR, IT MAY BE POINTED OUT THAT THE PR HAS GIVEN CONTRACT FOR PROVI DING TECHNICAL SERVICES TO THIS CONTRACT M/S J.D. REFERIGERATION & ELECTRICALS, GAHU N ROAD 31-1-2011 COPY OF WHICH HAS BEEN FURNISHED BY THE PR. PERUSAL THEREOF READS AS FOLLOWS:- 1. SCOPE OF WORK: SCOPE OF WORK INCLUDED EXECUTIO N OF WORK BY PROVIDING LABOUR BY THE CONTRACTOR. ALL CLEARANCES HORIZONTAL, VERITICAL, PHASE TO PHASE, SHALL BE AS PER STANDARD SPECIFICATIONS OF PSPCL AND INDI AN ELECTRICITY RULES, 1956. EARTHING IS TO BE PROVIDED TO ALL CAPACITY DISTRACT ION TRANSFORMERS AND EACH POLE AS PER EXISTING INSPECTION NEWLY ERECTED HT LINE. P SPCL MAY AT ITS DISCRETION CHANGE THE SCOPE OF THE WORK VIZ. INCREASE/DECREASE IN THE QUOTATION OF WORK, IF REQUIRED. THE MATERIAL SHALL BE PROVIDED BY THE PSP CL AND SHALL BE DRAWN BY JE CONCERNED OF PSPCL SUB DIVISION. THE DISMANTLED MAT ERIAL SHALL BE HANDED OVER TO JE INCHARGE AT SITE BY CONTRACTOR AND SHALL BE RETURNED BY HIM TO STORE. 2. FINAL CHECKING, TESTING AND COMMISSIONING DONE BY THE PSPCLS OFFICER OR ITS AUTHORIZED AGENCY TO ENSURE THAT ALL THE WOR KS EXECUTED HAVE BEEN DONE ACCORDING TO SPECIFICATIONS APPROVED BY PSPCL. IT IS THUS CLEAR THAT THE CONTRACT WAS FOR PROVIDIN G TECHNICAL SERVICES AND NOT FOR PROVIDING LABOUR ALONE. THE CONTENTION OF THE PR IS THEREFORE DEVOID OF ANY MERIT. THE CASES RELIED ON BY THE PR ARE DISTINGUISHABLE ON FACTS. MOREOVER THE PR HAS ALSO NOT BROUGHT ON RECORD ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE TAX SHORT DEDUCTED AT SOURCE HAS BEEN PAID BY THE DEDUCTEE. 3.1 AS REGARDS THE OTHER CONTRACTOR-M/S CCS TECHNERG Y LIMITED, HYDERABAD-IT MAY BE POINTED OUT THAT AS PER WORK ORDER CUM CONTR ACT NO.14/DB/33/B DATED 9.6.2009 COPY OF WHICH HAS BEEN PROVIDED BY THE PR I N THE COURSE OF POST INSPECTION INQUIRIES IT IS REVEALED THAT IT WAS FOR CARRYING METER READING, SPOT BILLING AND CASH COLLECTION IN 10 DIVISIONS CONTAIN ED IN THIS WORK ORDER. PERUSAL OF THE WORK ORDER STATES THE SCOPE OF WORK AS UNDER: SCOPE OF WORK. PSEB INTENDS TO INTRODUCE SPOT BILLING SCHEME FOR ITS DS/NRS CONSUMERS WITH LOAD LESS THAN 20KW TO EASE OUT THE BILLING FU NCTIONS AND PROCESSES. THE VENDOR SHALL PROVIDE THE REQUIRED HARDWARE, S OFTWARE, SPOT BILLING MACHINES INCLUDING MANPOWER AS PER REQUIRED SERVICE S AND TAKE BACK THE SAME AFTER COMPLETION OF THE CONTRACT. IT SHALL PROVIDE ALL THE RELEVANT SERVICES SUCH AS METER READING, BILL CALCULATION, BILL GENERATION, B ILL DELIVERY/ HANDING OVER TO CONSUMERS, PAYMENT COLLECTION, ISSUE OR RECEIPT TO CONSUMER, DATE LOADING ON THE ITA NO.38 5 TO 387 (ASR)/2015 ASST. YEARS: 2010-11 TO 2012-13 4 MACHINES, DATE DOWNLOADING FROM THE MACHINES, INTEG RATING OF DATA, GENERATION OF REQUISITE REPORTS, SENDING DATE TO PSEB/DOEACC AND S HOULD SEAMLESSLY INTEGRATE WITH THE EXISTING BILLING SYSTEM BEING MAINTAINED B Y M/S DOEACC OR PSEB OR IN FUTURE WITH ERP OR ANY OTHER BILLING SOFTWARE AND AL SO WITH VARIOUS PAYMENT COLLECTION MECHANISMS UNDER OPERATION WITH PSEB. FROM THE NATURE OF SERVICES PROVIDED BY PAYEES, WE FIND THAT THE SERVICES PROVIDED BY PAYEES ARE NOT TECHNICAL IN NATURE AS D EFINED BY THE ACT IN SECTION 194J. SECTION 194J REQUIRES THE ASSESSEE TO DEDUCT TDS @ 10% FOR FEES FOR PROFESSIONAL SERVICES OR TECHNICAL SER VICES. FEE FOR TECHNICAL SERVICES HAS BEEN DEFINED IN EXPLANTION-2 TO CLAUSE (VII) OF SECTION-9. WE FURTHER FIND THAT EXPLANTION-2 TO CLAUSE (VIII) OF SECTION 9 IS READS AS UNDER: EXPLANATION [2]- FOR THE PURPOSES OF THIS CLAUSE, FEES FOR TECHNICAL SERVICES MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CON SIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTAN CY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONN EL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE IN COME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES. FROM THE ABOVE EXPLANATION PROVIDED IN SECTION 9 FO R THE MEANING OF TECHNICAL SERVICES WE FIND THAT EXPLANATION CLARIFI ES THAT TECHNICAL SERVICES MEANS THE PROVISION OF MANAGERIAL, TECHNIC AL OR CONSULTANCY SERVICES. FROM THE SCOPE OF WORK AS NOTED BY ASSESS ING OFFICER FROM THE WORKS CONTRACT AS REPRODUCED IN THE EARLIER PART OF ORDER, WE DO NOT FIND THAT ASSESSEE HAD OBTAINED ANY MANAGERIAL, TECHNICA L OR CONSULTANCY SERVICES FROM THE PAYEES, THEREFORE, THE PROVISIONS OF SECTION 194J WERE NOT APPLICABLE TO THE ASSESSEE AND RATHER ASSESSEE HAD DEDUCTED TAX U/S 194C RIGHTLY AND THEREFORE, WE ALLOW GROUND NO.1 OF THE APPEAL. ITA NO.38 5 TO 387 (ASR)/2015 ASST. YEARS: 2010-11 TO 2012-13 5 8. GROUND NO. 4 IS IN RESPECT OF INTEREST ON DEMAND CREATED BY ASSESSING OFFICER U/S 201(A) OF THE ACT AND AS WE H AVE ALREADY DECIDED THE FIRST GROUND OF APPEAL IN FAVOUR OF THE ASSESSE E, THEREFORE, THIS GROUND WILL NOT SURVIVE AND HENCE THIS ACTION OF LE ARNED CIT(A) WILL ALSO NOT SURVIVE AND THEREFORE, GROUND NO.4 IS ALSO ALLO WED. 9. IN VIEW OF THE ABOVE, APPEALS FILED BY ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:30.06.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER