ITO, New Delhi V. M/s. LMJ International Ltd., New Delhi

ITA 4065/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53265 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 07-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J MISRA
• Assessee Lawyers: M K ARORA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) SHRI R.P. TOLANI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4064 & 4065/DEL./2011 (ASSESSMENT YEAR : 2003-04 & 2004-05) ITO, WARD 50 (3), VS. M/S. LMJ INTERNATIONAL LIM ITED, DELHI 110 092. LMJ HOUSE, 9, HANUMAN ROAD, NEW DELHI 110 001. (PAN : AAACL4483H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.K. ARORA, ADVOCATE REVENUE BY : SHRI J. MISRA, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : BOTH THE APPEALS FILED BY THE ASSESSEE ARISE OUT OF THE ORDER OF THE CIT (APPEALS)-XXX, NEW DELHI DATED 08.06.2011. THE GRO UNDS OF APPEAL ARE COMMON IN BOTH THE APPEALS WHICH READ AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN :- 1) IN ANNULLING THE ORDER PASSED BY THE A.O. U/S 201(1)/201(1A) WITHOUT HAVING THE REMAND REPORT. 2) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. ITA NOS.4064 & 4065/DEL./2011 2 2. THE APPELLANT IS A LIMITED COMPANY HAVING ITS RE GISTERED AND ADMINISTRATIVE OFFICE AT KOLKATA, I.E., 15-B, H, SA RANI, KOLKATA-700 001 AND 30, JAWAHAR LAL NEHRU ROAD, KOLKATA-700 016 RESPECT IVELY. THE COMPANY HAS BRANCH OFFICES AT ALL OVER INDIA. THE COMPANY HAS GOT ALLOTTED A TAN NUMBER BY THE KOLKATA OFFICE. THE ITO, WARD 50(3), NEW DELHI MADE AN ORDER U/S 201(1)/201(1A) OF INCOME-TAX ACT AND RAIS ED THE DEMAND BY HOLDING THAT THE ASSESSEE AS A DEDUCTOR IN DEFAULT. THE ASSESSEE FILED APPEAL AND THE CIT (A) DISPOSED OFF THE APPEAL BY HOLDING AS UNDER :- 5. I HAVE CONSIDERED THE ASSESSMENT ORDER, WRITTEN SUBMISSIONS, GROUNDS OF APPEAL AND OTHER MATERIALS PLACED BY THE AR AND DISCUSSED THE MATTER WITH THE AO(TDS) AL SO. AS ALL TRANSACTIONS WERE REFLECTED IN HEAD OFFICE BALANCE SHEET AND P&L ACCOUNT AT KOLKATTA, THE AR ARGUED THAT NO TDS SHOULD BE CHARGED AT DELHI. DELHI IS A BRANCH OFFICE AND HAS NOT BEEN ALLOTTED ANY TAN. THE AO (TDS) AT DELHI CANNOT PASS ORDER UNDER KOLKATTA TAN FOR WHICH HE HAD NO JURISDICTION . THE CASE WAS ALSO DISCUSSED IN PRESENCE OF ASSESSING OFFICER (TDS). AS THERE IS NO JURISDICTION OF AO HERE, THE CASE MAY B E TRANSFERRED TO KOLKATTA. CONSIDERING THE FACTS AND CIRCUMSTANCE S OF THE CASE, I AM OF THE OPINION THAT THE AO(TDS), DELHI HAS NO JURISDICTION AND ORDER PASSED BY THE AO IS ILLEGAL AND ARBITRARY BECAUSE THE TAN WAS ALLOTTED BY THE KOLKATTA INCOME TAX AUTHORI TIES AND THE ASSESSEE COMPANY'S H.O. WAS COMPLYING WITH ALL THE TDS PROVISIONS AS TO DEPOSITING OF TDS AND FILING OF RE TURNS AT KOLKATTA. IN CASE OF BRANCH OFFICE, A SEPARATE TAN CAN BE GIVEN IF THE ACCOUNTS ARE NOT FINALIZED BY THE H.O. FOR A YEAR. IN THIS CASE, THE F.Y. IS 2003-04 AND 2004-05, FOR WHICH, I SUPPOSE, THE ACCOUNTS OF THOSE YEARS ARE FINALISED AND RETURNS O F H.O. MIGHT HAVE BEEN FINALISED. THEN FOR ANY SHORTFALL IN TDS, H.O WILL BE RESPONSIBLE. THAT JURISDICTION FOR SUCH OLD YEARS W ILL BE EXERCISED BY TDS AUTHORITIES HAVING JURISDICTION OV ER H.O. THE APPELLANT SHOULD ALSO TAKE CARE OF IMPLEMENTING TDS PROVISIONS IN FUTURE, BY GETTING TAN NO. SEPARATELY FOR ITS BR ANCH OFFICES. IF BRANCH OFFICE MAKES ANY PAYMENT TO DEDUCTEE PERSONS , THEN IT ITA NOS.4064 & 4065/DEL./2011 3 SHOULD DEDUCT TAX AT SOURCE AS PER LAW AND PAY TO T HE GOVT O/C IN TIME. THE DEDUCTOR HAS A ROLE OF COLLECTING TAX AT SOURCE FROM DEDUCTEE PERSONS SO THAT THE TAX NET CAN BE WIDENED EASILY AND TAX COMPLIANCE OF CITIZENS WILL IMPROVE SMOOTHLY. H OWEVER, TAN DECIDES JURISDICTION OF AO(TDS), AS IT IS MANDA TORY REQUIREMENT IN COMPUTERISED ENVIRONMENT FOR THE DEP ARTMENT. THE IMPUGNED ORDER PASSED BY THE AO TREATING THE AP PELLANT IN DEFAULT UNDER THE PROVISIONS OF SECTION 201 IS ANNU LLED. THE AO IS DIRECTED TO TRANSFER ALL THE RECORDS OF APPELLAN T TO INCOME TAX AUTHORITIES, KOLKATTA THROUGH CCIT-III,DELHI TO CCI T(TDS), KOLKATTA THROUGH PROPER CHANNEL. WHERE THE APPELLAN T COMPANY ASSESSED AND FILE HIS RETURN AND DEPOSITING TDS UND ER TAN NO.ALLOTTED BY THE KOLKATTA INCOME-TAX AUTHORITIES. 3. LEARNED DR SUBMITTED THAT THE CIT (A) HAS BASED HIS ORDER ON THE SURMISES, CONJECTURES AND PRESUMPTIONS. THE CIT (A ) HAS ALSO ERRED IN HOLDING THAT THE JURISDICTION IN THIS CASE WAS OF I TO, TDS, KOLKATA AS THE ASSESSEE HAS TAKEN TAN NUMBER FROM THE KOLKATA. CI T (A) IS NOT JUSTIFIED IN ANNULLING THE ORDER PASSED AND ALSO DIRECTING THE A SSESSING OFFICER TO TRANSFER ALL THE RECORDS OF THE ASSESSEE TO INCOME-TAX AUTHO RITIES, KOLKATA THROUGH CCIT-III, DELHI TO CCIT (TDS), KOLKATA. 4. WE HAVE HEARD BOTH THE SIDES. AFTER HEARING BOT H THE SIDES, WE DECIDE AS FOLLOWS :- FIRSTLY, GETTING THE TAN NUMBER AT KOLKATA IS NOT THE BASIS FOR DECIDING THE JURISDICTION F THE ITO, TDS AT DELHI. IF ANY B RANCH OFFICE OF THE ASSESSEE IS MAKING A PAYMENT WHERE THE TDS IS REQUIRED TO BE DEDUCTED THEN THE CONCERNED BRANCH IS EQUALLY RESPONSIBLE FOR NOT COM PLYING WITH THE TDS REGULATIONS AND ITO, TDS FOR THAT REGION HAS ALL JU RISDICTION TO TAKE NECESSARY ITA NOS.4064 & 4065/DEL./2011 4 ACTION. SECONDLY, THE LEARNED AR REQUESTED THAT TH E MATTER MAY BE DIRECTED TO BE TRANSFERRED TO KOLKATA AND THE OFFICER AT KOLKAT A MAY VERIFY THE CORRECTNESS OF THE TDS IF IT HAS NOT DONE TILL DATE. WE AGREE WITH THIS PROPOSITION OF AR AND WE DIRECT TO TRANSFER THE RECORD TO ASSESSING O FFICER AT KOLKATA TO MAKE NECESSARY VERIFICATION IN THIS REGARD. WITH THE AB OVE OBSERVATIONS, THE APPEAL OF THE REVENUE IS DISPOSED OFF. THE FURTHER ACTION OF THE KOLKATA OFFICE IN THIS REGARD SHALL NOT BE BARRED BY LIMITATION. 5. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 2 ND DAY OF DECEMBER, 2011. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 2 ND DAY OF DECEMBER, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.