The Ex.Engineer, Project Unit, Pantnagar V. ITO(TDS), Haldwani

ITA 4123/DEL/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6664 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 06-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Section: 194C; 201(1)

Judgement Text

I.T.A. NO. 4123, 4124, 4125 /DEL/2010 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH H BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 4123, 4124 & 4125 /DEL/2010 (ASSESSMENT YEAR 2005-06,2006-07 & 2007-08) THE EXECUTIVE ENGINEER, VS. ITO, (TDS) PEROJECT UNIT, HALDWANI SIDCUL, UTTARAKHAND PANTNAGAR UTTARAKHAND (APPELLANTS) (RESPONDENTS) PAN / GIR NO. MRTE00399A APPELLANT BY: NONE RESPONDENT BY: SHRI A K MONGA, DR ORDER PER BENCH: 1. ALL THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTE D AGAINST THREE SEPARATE ORDERS OF LD. CIT(A) II, DEH RADUN ALL DATED 04.05.2010 FOR THE ASSESSMENT YEARS 2005-06, 2006- 07 & 2007-08. THE ISSUE INVOLVED IS COMMON AND HEN CE ALL THESE THREE APPEALS WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. SINCE THE GROUNDS ARE IDENTICAL IN ALL THE THREE YE ARS, THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE REPRODU CED FOR THE ASSESSMENT YEAR 2005-06 IN I.T.A. NO. 4123/DEL/2010: 1) BECAUSE THE LD. ITO (TDS) HAS NOT DULY CONSIDER ED THE FACTS AND CIRCUMSTANCES OF THE CASE. I.T.A. NO. 4123, 4124, 4125 /DEL/2010 2/5 2) BECAUSE THE APPELLANT IS A GOVERNMENT DEPARTMENT WHICH HAS TO DEDUCT TAX AT SOURCE AS AND WHEN PAYMENT IS MADE TO CONTRACTORS AND PAYMENT OF THE SAME IS MADE AFTER APPROVAL FORM THE HIGHER AUTHORITIES AND ALSO THAT TAX IS TO DEPOSITED IN BR ANCH OF THE BANK WHICH IS IN RUDRAPUR, IN WHICH CASE THE RE IS PROCEDURAL DELAY SOMETIMES WHICH OUGHT TO BE CONSIDERED. THE DELAY IS UNINTENTIONAL AND BEYOND THE CONTROL OF THE APPELLANT. 3) BECAUSE THE LEVY OF INTEREST IS AGAINST LAW AND FAC TS, JUSTICE & EQUITY AND THE APPEAL IS LIABLE TO BE ACCEPTED AND INTEREST LEVIED BE STRUCK OFF. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF THE FACT THAT DATE OF HEARING WAS NOTIFIED TO THE ASSES SEE IN THE ACKNOWLEDGEMENT CUM NOTICE ISSUED TO THE ASSESSEE A T THE TIME OF FILING OF APPEAL ITSELF. THERE IS NO REQUE ST FOR ADJOURNMENT AND HENCE, WE DECIDE THESE APPEALS OF T HE ASSESSEE EX-PARTE QUA THE ASSESSEE. 4. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDERS O F THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. D.R. F OR THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF AUTHORI TIES BELOW. THE BRIEF FACTS AND THE CONTENTION RAISED B Y THE ASSESSEE BEFORE THE LD. CIT(A) ARE NOTED BY LD. CIT (A) IN PARA 4, 5 & 6 OF HIS ORDER WHICH ARE REPRODUCED BEL OW: 4. IN FURTHER ELABORATION OF THE ABOVE, THE LD. CO UNSEL SHIR VIKAS SHARMA, ADVOCATE, IN HIS WRITTEN SUBMISS IONS DATED 29.04.2010 HAS STATED AS UNDER: BRIEF FACTS OF THE CASE :- THAT THE APPELLANT IS A GVOT. DEPTT. AND DEDUCT TAX AT SOURCE ON PAYMENTS MADE TO CONTRACTORS. SOMETIME THERE IS DELAY IN DEPOSITING OF TAX DEDUCTED AT SOURCE FOR WHICH INTE REST WAS LEVIED U/S 201(1A) BY THE ITO (TDS), HALDWANI. ARGUMENT IN BRIEF:- I.T.A. NO. 4123, 4124, 4125 /DEL/2010 3/5 1) THAT THE LD. ITO (TDS) HAS OBSERVED THAT THE AMOUNT OF TAX DEDUCTED HAS TO BE DEPOSITED ON THE SAME DAY, WHEREAS THE TAX IS DEPOSITED AFTER CONFIRMATION AND APPROVAL FROM HIGHER AUTHORITIES, IN WHICH CASE THERE IS PROCEDURAL DELAY AND IT IS NOT POSSIBLE TO DEPOSIT THE TAX DEDUCTED AT SOURCE ON THE DATE OF DEDUCTION. 2) THAT THE ITO (TDS) HAS CHARGED INTEREST OF RS.7009/- WITHOUT CONSIDERING THAT THE DELAY IS DUE TO PROCEDURAL FORMALITIES. 3) THAT THE INTEREST CHARGED BE STRUCK OFF AND APPEAL ALLOWED. 5) A PERUSAL OF THE SUBJECT ORDER U/S 201(1A) OF TH E ACT BRINGS OUT THATS THE APPELLANT EXECUTIVE ENGIN EER (DDO) DID MAKE DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS MADE TO CONTRACTORS BUT FAILED TO DEPOSIT THE TAX SO DEDUCTED INTO THE GOVT. ACCOUNT WITHIN THE T IME PRESCRIBED UNDER RULE 30 OF THE I T RULES, 1962. T HE LD. A.O. HAS, THEREFORE, LEVIED INTEREST AT THE SPECIFI ED RATE AFTER AFFORDING REASONABLE OPPORTUNITY TO THE APPEL LANT ASKING WHY INTEREST UNDER SUB-SECTION (1A) OF SEC. 201 OF THE ACT SHOULD NOT BE CHARGED. 6) IN THE COURSE OF THE APPELLATE PROCEEDINGS THE L D. A.R. SHRI VIKAS SHARMA, ADV., ATTENDED AND STATED T HAT THE TAX DEDUCTED AT SOURCE COULD NOT BE DEPOSITED O N THE SAME DAY BECAUSE OF DELAY OF APPROVAL FROM HIGH ER AUTHORITIES. HE EMPHASIZED THAT THE DELAY IN DEPOS ITING THE TAX DEDUCTED AT SOURCE, WAS DUE TO PROCEDURAL FORMALITIES ONLY. 6. UNDER THESE FACTS, THE ISSUE INVOLVED IN THE PRESEN T APPEAL IS COVERED AGAINST THE ASSESSEE AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF HINDUSTA N COCA COLA BEVERAGES PVT. LTD. VS CIT AS REPORTED IN 293 ITR 226. IN THAT CASE, THE FACTS ARE THAT THE ASSESSEE WAS E NGAGED IN THE BUSINESS OF MANUFACTURE OF OIL AND SOFT DRIN KS AND THE ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S. PR ADEEP OIL CORPORATION FOR USE OF THEIR PREMISES FOR RECEI PT, STORAGE AND DISPATCH OF GOODS BELONGING TO THE ASSESSEE COM PANY I.T.A. NO. 4123, 4124, 4125 /DEL/2010 4/5 AND THE ASSESSEE COMPANY PAID WAREHOUSING CHARGES T O M/S. PRADEEP OIL CORPORATION ON WHICH TAX WAS DEDUC TED BY THE ASSESSEE U/S 194(C) OF THE I. T. ACT @ 2%. THE A.O. HELD THE ASSESSEE TO BE ASSESSEE IN DEFAULT FOR FA ILURE TO DEDUCT TAX AT SOURCE IN RESPECT OF WAREHOUSING CHAR GES PAID TO M/S. PRADEEP OIL CORPORATION. THE A.O. REJ ECTED THE PLEA OF THE ASSESSEE THAT THE PAYMENT MADE BY THE ASSESSEE COMPANY WERE IN THE NATURE OF CONTRACTUAL PAYMENTS ON WHICH TAX WAS DEDUCTIBLE U/S 194C OF TH E I. T. ACT @ 2%. THE A.O. HELD THAT TDS WAS DEDUCTIBLE U/ S 194-I @ 20% AS AGAINST THE DEDUCTION OF TAX @ 2% U/S 194( C) OF THE I. T. ACT AND THE A.O. HELD THE ASSESSEE TO BE ASSESSEE IN DEFAULT FOR THE SHORTFALL IN THE AMOUNT OF TDS AND LEVIED INTEREST ALSO U/S 201(1A) OF THE I. T. ACT ON THE A MOUNT OF SHORT DEDUCTION OF TDS BY THE ASSESSEE. ALTERNATI VE PLEA WAS RAISED BY THE ASSESSEE IN THAT CASE THAT THE DE DUCTEE HAS BEEN ASSESSED ON THE INCOME IN DISPUTE AND THE TAX DUE HAS BEEN RECOVERED FROM IT BY THE DEPARTMENT AN D, THEREFORE, NO FURTHER TAX COULD HAVE BEEN COLLECTED FROM THE ASSESSEE. THE HONBLE APEX COURT HAD CONSIDERED THE CIRCULAR NO.275/201/95-IT(B) DATED 29.01.1997 ISSUE D BY CBDT AD HELD THAT AS PER THIS CIRCULAR, NO DEMAND VISUALIZED U/S 201(1) OF THE I. T. ACT SHOULD BE EN FORCED AFTER THE TAX DEDUCTOR HAD SATISFIED THE OFFICER-IN -CHARGE OF TDS THAT TAXES DUE HAD BEEN PAID BY THE DEDUCTEE ASSESSEE. IT IS HELD BY THE HONBLE APEX COURT IN THAT CASE THAT EVEN THIS WILL NOT ALTER THE LIABILITY TO CHAR GE INTEREST U/S 201(1A) OF THE I. T. ACT TILL THE DATE OF PAYME NT OF TAX BY THE DEDUCTEE ASSESSEE. HENCE, WHATEVER BE THE REAS ON FOR NON PAYMENT OR AND DELAYED PAYMENT OF TDS, INTEREST U/S 201(1A) IS PAYABLE BY THE ASSESSEE IN DEFAULT AND H ENCE, IN I.T.A. NO. 4123, 4124, 4125 /DEL/2010 5/5 THE PRESENT CASE ALSO, THE DEMAND RAISED BY THE A.O . FOR INTEREST U/S 201(1A) AND CONFIRMED BY THE LD. CIT(A ) IS PROPER AND NO INTERFERENCE IS CALLED FOR IN THE ORD ER OF LD. CIT(A) IN ALL THE THREE YEARS. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSESSE E ARE DISMISSED. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 9 TH NOV., 2010. SD./- SD./- (RAJPAL YADAV) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:19 TH NOV., 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI