ACIT, New Delhi V. Catholic Relief Services, New Delhi

ITA 4017/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7318 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Retrospective amendment; Assessment record
• Section: 201(1); 132; 90

Judgement Text

ITA NO S . 4017 - 4019 / DEL/ 201 2 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O S. 4017, 4018 & 4019 /DEL/201 2 A.Y RS . : 2006 - 07, 2007 - 08 & 2008 - 09 ACIT, CIRCLE 49(1), NEW DELHI VS. CATHOLIC RELIEF SERVICES NO. 139, SHOPPING COMPLEX, ZAMRUDPUR, DELHI (PAN: AACFC6156D) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. PARMINDER KAUR, SR. DR ASSESSEE BY : SHRI DR. RAM SAMUJH, ADVOCATE DATE OF HEARING : 11 - 9 - 2014 DATE OF ORDER : 26 - 9 - 2014 ORDER PER H.S. SIDHU : J M TH ESE APPEAL S BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XX X, NEW DELHI DATED 09.5.2012 P ERTAINING TO ASSESSMENT YEAR S 2006 - 07 TO 2008 - 09 . THE GROUNDS RAISED READ AS UNDER : - ITA NO S . 4017 - 4019 / DEL/ 201 2 2 1. ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DEMAND RAISED U/S. 201(1) AND ERRED IN REDUCING THE IN TEREST LIABILITY RAISED U/S. 201(1) RELYING UPON THE DECISION OF THE HON BLE HIGH COURT IN THE CASE OF M/S NESTLE INDIA LTD. (2000) 243 ITR 435 WHEREIN IT HAS BEEN HELD THAT THE DEDUCTION OF INCOME TAX SUBJECT TO REGULAR ASSESSMENT IN THE HANDS OF THE P AYEE / RECIPIENTS. FOLLOWING THE SAME THE LD. CIT(A) STATED THAT AO (TDS) WAS NOT JUSTIFIED IN ENHANCING THE INCOME OF THE EXPATRIATE EMPLOYEES BY MAKING ADDITION ON ACCOUNT OF PERQUISITES AND DISALLOWING THE RELIEF U/S. 90 OF THE I.T. ACT. 2. ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT SECTION 201 WAS AMENDED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1.6.2002 AND THE JUDGMENT APPLY TO CASE PRIOR TO AMENDM ENT. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. BRIEFLY FACTS STATED ARE THAT THE ASSESSEE IS A LIAISON OFFICE OF US BASED NGO ESTABLISHED IN 1943 HAVING ITS OPERATION IN INDIA FOR MANY YEARS AS AN APPROVED AGENCY UNDER THE INDO US BILATERAL AGREEMENT. THE LIAISON OFFICE IS SITUATED AT ZAMRUDPUR, NEW DELHI. A SEARCH AN D SEIZURE OPERATION UNDER ITA NO S . 4017 - 4019 / DEL/ 201 2 3 SECTION 132 OF THE I.T. ACT, 1961 WAS CONDUCTED ON 11.9.2007 AGAINST THE ASSESSEE. THE ASSESSEE PRIOR TO DATE OF SEARCH DID NOT DEDUCT THE TAX AT SOURCE FROM THE SALARY AND PERQUISITES OF 25 EXPATRIATE EMPLOYEES. HOWEVER, AFT ER THE DATE OF SEARCH THE ASSESSEE HAS DEDUCTED THE TAX FOR THE PERIOD UNDER CONSIDERATION AND DEPOSITED THE SAME TO THE GOVT. EXCHEQUERS. ASSESSING OFFICER (TDS) HELD THAT THE ASSESSEE WAS LIABLE FOR SHORT DEDUCTION OF TDS AND ACCORDINGLY, HE CHARGED T HE SHORTFALL FOR TAX AMOUNT AS PER THE PROVISIONS OF SECTION 201(1) AND CHARGED THE INTEREST U/S. 201(1A) AGAINST SUCH SHORT FALL OF TAXES. THEREFORE, HE LEVIED THE TAX AND INTEREST AGAINST THE ASSESSEE AS BELOW: - A.Y. TAX U/S 201(1) INTEREST U/S. 201(1A ) TOTAL AMOUNT 2006 - 07 2,70,086 4,23,860 6,93,946 2007 - 08 4,54,043 4,86,373 9,40,416 2008 - 09 5,03,251 4,69,359 9,72,610 4. AGAINST THE ABOVE ORDER OF THE ASSESSING OFFICER (TDS), ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 9.5.2012 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE IN THE FOLLOWING MANNER: - A.Y. TOTAL INTEREST U/S. 201(1A) CHARGED BY AO(TDS) INTEREST UPHELD RELIEF ALLOWED 2006 - 07 4,23,860 2,73,272 1,50,589 2007 - 08 4,86,373 2,94,299 1,92,072 ITA NO S . 4017 - 4019 / DEL/ 201 2 4 2008 - 09 4,69,359 3,18,383 1,50,976 13,79,592 8,85,954 4,93,637 5. AGAINST THE ABOVE ORDER OF THE LD. CIT(A), REVENUE APPEALED BEFORE US. 6. LD. COUNSEL OF THE ASSESSEE FILED A PAPER BOOK HAVING PAGES 1 TO 74 CONTAINING THE ASSESSMENT RECORDS, WRITTEN SUBMISSIONS ETC. 7. LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND REQUESTED THAT THE SAME MAY BE UPHELD. 7.1 ON THE OTHER HAND, LD. DR HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED ON THE CONTE NTION RAISED IN THE GROUNDS OF APPEAL THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DEMAND RAISED U/S. 201(1) AND ERRED IN REDUCING THE INTEREST LIABILITY RAISED U/S. 201(1) RELYING UPON THE DECISION OF THE HON BLE HIGH COURT IN THE CASE OF M/S NESTLE INDIA LTD. (2000) 243 ITR 435 WHEREIN IT HAS BEEN HELD THAT THE DEDUCTION OF INCOME TAX SUBJECT TO REGULAR ASSESSMENT IN THE HANDS OF THE PAYEE / RECIPIENTS. FOLLOWING THE SAME THE LD. CI T(A) STATED THAT AO (TDS) WAS NOT JUSTIFIED IN ENHANCING THE INCOME OF THE EXPATRIATE EMPLOYEES BY MAKING ADDITION ON ACCOUNT OF PERQUISITES AND DISALLOWING THE RELIEF U/S. 90 OF THE I.T. ACT. LD. DR ALSO MADE A CONTENTION MADE IN THE GROUNDS OF APPEAL TH AT O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. ITA NO S . 4017 - 4019 / DEL/ 201 2 5 CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT SECTION 201 WAS AMENDED BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1.6.2002 AND THE JUDGMENT APPLY TO CASE PRI OR TO AMENDMENT . 7.2 LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED BY WAY OF HIS WRITTEN SUBMISSION DATED 25.10.2013 THAT LD. CIT(A) HAS DECIDED THE APPEAL BY A SPEAKING AND WELL REASON ORDER. HE ALSO SUBMITTED THAT THE LD. CIT(A) HAS PROVIDED THE RELIEF BY FOLLOWING THE PRINCIPLE LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NESTLE INDIA LTD. (2000) 243 ITR 435 AND ALSO THE PRINCIPLE LAID DOWN BY HON BLE APEX COURT IN THE CASES OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS. CI T (2007) 293 ITR 226 AND CIT VS. ELI LILLY AND CO. (INDIA) PVT. LTD. (2009) 312 ITR 255. HE ALSO SUBMITTED THAT FURTHER THERE IS A NEW CASE IN FAVOR OF THE ASSESSEE DECIDED BY THE HON BLE JURISDICTIONAL HIGH COURT I.E. CIT VS. DELHI PUBLIC SCHOOL, ITA N O. 345/2009 ORDER DATED 31.10.2011, BY APPLYING THE PRINCIPLE LAID DOWN IN THE CASE OF CIT VS. NESTLE INDIA LTD. (SUPRA) UPHELD THE FINDING OF THE ITAT WHICH HELD THAT THOSE CASES WERE NOT FIT FOR PASSING THE ORDER U/S. 201(1) AND CONSEQUENTLY CHARGING TH E INTEREST U/S. 201(1A). 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS AND PRECEDENTS RELIED UPON. IN VIEW OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE FIND CONSIDERABLE FORCE IN THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE. WE ITA NO S . 4017 - 4019 / DEL/ 201 2 6 ALS O FIND THAT THE LD. CIT(A) WHILE ALLOWING THE CLAIM OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NESTLE LTD. (2000) 243 ITR 345. WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A) NOR ANY FLAW OR INFIRMITY HAS BEEN POINTED OUT BY THE LD. DR SO AS TO TAKE DIFFERENT VIEW IN THE MATTER. THE ORDER OF THE LD. CIT(A) IS ACCORDINGLY UPHELD. 7 . IN THE RESULT, ALL THE THREE APPEAL S FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUN CED IN THE O PEN C OURT ON 26 / 9 /20 1 4 . SD/ - SD/ - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 26 / 9 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO S . 4017 - 4019 / DEL/ 201 2 7