DCIT (TDS) 2(1), MUMBAI V. MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD, MUMBAI

ITA 3997/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88477 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Assessee Lawyers: K K VED
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 3997/MUM/2013 (ASSESSMENT YEAR: 2009-10) DCIT (TDS) - 2(1) VS. M/S. MAHARASHTRA STATE ELECTRICITY ROOM NO. 702, 7TH FLOOR SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD MUMBAI 40002 DISTRIBUTION CO. LTD. 1ST FLOOR, PRAKASHGAD, ANAND KANEKAR MARG, BANDRA (E) MUMBAI 400051 PAN - AAECM2933K APPELLANT RESPONDENT APPELLANT BY: SHRI SURINDER JIT SINGH RESPONDENT BY: SHRI K.K. VED DATE OF HEARING: 05.03.2015 DATE OF PRONOUNCEMENT: 05.03.2015 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) 14, MUMBAI AND IT PERTAINS TO A.Y. 2009-10. 2. PENALTY LEVIED BY THE AO UNDER SECTION 271C OF THE INCOME TAX ACT, 1961, CANCELLED BY THE CIT(A), IS THE SUBJECT MATTE R OF DISPUTE BEFORE US. 3. ASSESSEE IS ENGAGED IN THE BUSINESS OF DISTRIBUTION OF ELECTRICITY WITHIN THE STATE OF MAHARASHTRA. ASSESSEE-COMPANY IS FULLY OWNED BY GOVERNMENT OF MAHARASHTRA. ASSESSEE WAS NOT DEDUCTING TAX AT S OURCE ON THE WHEELING AND TRANSMISSION CHARGES PAID TO MSETCL AND POWER GRID CORPORATION OF INDIA LTD. AO, THEREFORE, INITIATED PROCEEDINGS UND ER SECTION 201(1)/201(1A) OF THE ACT AS IN HIS OPINION THE AFOREMENTIONED CHA RGES ARE IN THE NATURE OF RENT AND UNDER SECTION 194J OF THE ACT ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE. SIMULTANEOUSLY PENALTY PROCEEDINGS WERE INI TIATED UNDER SECTION 271C OF THE ACT. 4. ON AN APPEAL FILED BY THE ASSESSEE AGAINST APPLICAB ILITY OF SECTION 194J, THE LEARNED CIT(A) OBSERVED THAT TAX IS DEDUC TIBLE UNDER SECTION 194-I ITA NO. 3997/MUM/2013 M/S. MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. 2 OF THE ACT, IGNORING THE CONTENTIONS OF THE ASSESSE E THAT THERE IS A REASONABLE CAUSE. IN THE MEANTIME ASSESSEE FILED AN APPEAL BEFORE THE ITAT, MUMBAI BENCHES CONTENDING, INTER ALIA, THAT ASSESSE E IS NOT REQUIRED TO DEDUCT TAX AT SOURCE UNDER SECTION 194-I OF THE INC OME TAX ACT. THE TRIBUNAL, IN TURN, HELD THAT ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE (ITA NO. 2872/MUM/2010 DATED 27.06.2012). SINCE THE VERY BASIS FOR LEVYING PENALTY DOES NOT EXIST, THE LEARNED CIT(A) CANCELLED THE PENALTY LEVIED UNDER SECTION 271C OF THE ACT. 5. REVENUE, HOWEVER, PREFERRED AN APPEAL AGAINST CANCE LLATION OF PENALTY, WHICH HAS COME UP FOR HEARING BEFORE US. WE HAVE CO NSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE RECORD. IT IS NOT IN DISPUTE THAT THE VERY BASIS FOR LEVY OF PENALTY CEASED TO EXIST IN T HE LIGHT OF THE ORDER OF THE ITAT (SUPRA). SUCH BEING THE CASE, WE DO NOT FIND A NY INFIRMITY IN THE ORDER OF THE CIT(A) IN CANCELLING THE PENALTY LEVIED UNDE R SECTION 271C OF THE ACT. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH MARCH, 2015. SD/- SD/ ( CHANDRA POOJARI ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 5 TH MARCH, 2015 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 14, MUMBAI 4. THE CIT (TDS), MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.