H.P. State Electricity Board, Shimla V. ITO (TDS), Shimla

ITA 42/CHANDI/2012

• Counselvise Citation: 4221514 RSA 2012
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: ASHWANI KUMAR; ADITYA KUMAR
• Keywords: Non-deduction of tax
• Section: 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NOS.42 TO 45/CHD/2012 ASSESSMENT YEARS: 2007-08 TO 2010-11) H.P.STATE ELECTRICITY BOARD, VS. THE INCOME TAX OFFICER(TDS), VIDYUT BHAVAN, KUMAR HOUSE, SHIMLA. SHIMLA. PAN: PTLC10806F (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI ASHWANI KUMAR & ADITYA KUMAR RESPONDENT BY : SMT.JAISHREE SHARMA, DR DATE OF HEARING : 16.02.2012 DATE OF PRONOUNCEMENT : 28.02.2012 O R D E R PER SUSHMA CHOWLA, J.M. : THESE FOUR APPEALS BY THE ASSESSEE ARE AGAINST THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SHIMLA DATED 20.10.2011 RELATING TO ASSESSMENT YEARS 2007-08 TO 2010-11 AGAINST THE ORDER PASSED U/S 201(1A) OF INCOME TAX ACT, 1961. 2. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE IN ALL THE FOUR APPEALS READS AS UNDER: 1. THAT ORDER U/S 250(6) OF THE INCOME TAX ACT, 19 61 PASSED BY THE LD. COMMISSIONER OF INCOME TAX APPEALS, SHIMLA IS AGAINST LAW AND FACTS ON THE FIL E IN AS MUCH SHE WAS NOT JUSTIFIED TO UPHOLD CHARGING OF INTEREST U/S 201(1A) AT RS.14,63,063/-. 3. ALL THESE FOUR APPEALS RELATING TO THE SAME ASSE SSEE ON THE SAME ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOS ED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS A STATE ELECTRICITY BOARD AND WAS ENGAGED IN GENERATION, TR ANSMISSION AND DISTRIBUTION OF POWER IN THE STATE OF HIMACHAL PRAD ESH. THE ASSESSEE WAS PURCHASING/SELLING POWER FROM/TO THE POWER GRID CORPORATION OF INDIA LIMITED (PGCIL), ETC., AND WAS SELLING IT TO THE CONSUMERS. THE POWER WAS TRANSMITTED THROUGH THE TRANSMISSION NET WORK OF M/S PGCIL. THE H.P. STATE ELECTRICITY BOARD WAS MAKING PAYMENT S ON ACCOUNT OF WHEELING CHARGERS/SLDC/TRANSMISSION CHARGES TO THE PAYEES COMPANY I.E. M/S PGCIL. 5. SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 11.2.2009. DURING THE COURSE OF SURVEY, IT WAS NOTED THAT THE ASSESSEE HAD MADE PAYMENTS OF TRANSMISSION CHARGES TO M/S PGCIL BUT NO TAX WAS DE DUCTED AT SOURCE UNDER THE PROVISION OF THE INCOME TAX ACT. DURING THE PROCEEDINGS BEFORE THE ITO(TDS), THE ASSESSEE WAS HELD NOT TO B E IN DEFAULT UNDER SECTION 201(1) OF THE ACT AS THE TAXES HAD BEEN PAI D BY THE PAYEE. FURTHER THE ISSUE CONSIDERED BY THE ASSESSING OFFIC ER WAS WHETHER THE ASSESSEE WAS LIABLE TO PAY INTEREST UNDER SECTION 2 01(1A) OF THE ACT. THE ASSESSING OFFICER TAKING NOTE OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN HINDUSTAN COCA COLA BEVERAGES P. L TD. VS. CIT [293 ITR 226 (SC)] HELD THAT THE ASSESSEE WAS LIABLE TO PAY INTEREST UNDER SECTION 201(1A) OF THE ACT. THE SAID INTEREST UNDE R SECTION 201(1A) OF THE ACT WAS CHARGED UP TO THE DATE OF FILING OF THE RETURN OF INCOME BY M/S PGCIL. THE COMPUTATION OF INTEREST CHARGEABLE UNDER SECTION 201(1A) OF THE ACT IS INCORPORATED AT PAGES 5 TO 7 OF THE ORDER PASSED BY THE ASSESSING OFFICER. THE PLEA OF THE ASSESSEE BE FORE THE CIT (APPEALS) WAS THAT THE INTEREST IS PAYABLE ONLY ON THE GROUND OF TAX REMAINING PAYABLE IN THE HANDS OF THE PAYEE AND AS IN THE PRESENT CASE 3 THE TAX HAD BEEN DEPOSITED ON REGULAR BASIS BY THE PAYEE, NO INTEREST IS PAYABLE BY THE ASSESSEE. THE CIT (APPEALS) HELD TH E ASSESSEE TO BE LIABLE TO PAY INTEREST UNDER SECTION 201(1A) OF THE ACT BOTH AS PER THE PROVISIONS OF THE ACT AND ALSO AS PER THE JUDGMENT OF THE HON'BLE APEX COURT IN HINDUSTAN COCA COLA BEVERAGES P. LTD. VS. CIT (SUPRA). THE INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT F OR ALL THE FOUR ASSESSMENT YEARS WAS UPHELD BY THE CIT (APPEALS). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS) AND THE CONTENTION OF THE LEARNED A.R. FOR THE ASSE SSEE IS THAT THE ISSUE IN THE CASE IS FULLY COVERED BY THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN HINDUSTAN COCA COLA BEVERAGES P. LTD. VS. CIT (SUPRA), HOWEVER, THE INTEREST IS CHARGEABLE TILL THE DATE O F PAYMENT OF THE TAXES BY THE PAYEE AND NOT TILL THE DATE OF FILING OF THE RETURN BY THE PAYEE. 7. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BEFORE US HAS ADMITTEDLY NOT DEDUCTED TAXE S AT SOURCES OUT OF PAYMENTS MADE TO M/S PGCIL AND HENCE WAS HELD TO BE IN DEFAULT IN RESPECT OF NON-DEDUCTION OF TAXES. HOWEVER, AS THE PAYEE M/S PGCIL HAD DEPOSITED TAXES, FOLLOWING THE CBDT CIRCULAR NO .275/201/95-IT(B) DATED 29.1.1997, THE ASSESSEE WAS HELD TO BE LIABLE TO PAY ONLY INTEREST UNDER SECTION 201(1A) OF THE ACT. 9. WE FIND THAT THE HON'BLE SUPREME COURT IN HINDUS TAN COCA COLA BEVERAGES P. LTD. VS. CIT (SUPRA) NOTED THE CONTENT S OF THE CIRCULAR NO.275/201/95-IT(B) DATED 29.1.1997 ISSUED BY THE C BDT, WHICH DECLARES AS UNDER: 4 10. THE CIRCULAR DECLARES NO DEMAND VISUALIZED UNDER SECTION 201(1) OF THE INCOME-TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED THE OFFICER-IN-CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARGE INTERES T UNDER SECTION 201(1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE OR THE LIABILITY FOR PENALTY U/S 271(1)(C) OF THE INCOME- TAX ACT. 10. AS PER THE ABOVE-SAID CIRCULAR THE LIABILITY TO CHARGE INTEREST UNDER SECTION 201(1A) OF THE ACT IS TILL THE DATE OF PAYM ENT OF TAXES BY THE PAYEE. WE FIND FROM THE PERUSAL OF THE ASSESSMENT ORDER THAT VIDE PARA-9 THE ASSESSING OFFICER HAD NOTED THE INFORMATION SUP PLIED BY THE ASSESSEE IN RESPECT OF THE ADVANCE TAX PAID BY THE DEDUCTEE M/S PGCIL AND TDS AMOUNT ADJUSTED AGAINST THE TAX PAYABLE FOR THE RES PECTIVE ASSESSMENT YEARS UNDER APPEAL. FOLLOWING THE RATIO LAID DOWN BY THE APEX COURT IN HINDUSTAN COCA COLA BEVERAGES P. LTD. VS. CIT (SUPR A) AND INSTRUCTION OF CBDT AS PER ITS CIRCULAR NO.275/201/95-IT(B) DAT ED 29.1.1997 INTEREST UNDER SECTION 201(1A) OF THE ACT IS CHARGE ABLE UP TO THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE/PAYEE. HOWEVER, I N THE PRESENT CASE THE ASSESSING OFFICER HAS CHARGED THE SAID INTEREST UNDER SECTION 201(1A) OF THE ACT TILL THE DATE OF FILING THE RETU RN OF INCOME BY THE DEDUCTEE/PAYEE IN THE RESPECTIVE ASSESSMENT YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE INTER EST UNDER SECTION 201(1A) OF THE ACT IN LINE WITH THE INSTRUCTIONS OF CBDT TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE/PAYEE IN THE RESPE CTIVE ASSESSMENT YEARS. THE ASSESSING OFFICER SHALL AFFORD REASONAB LE OPPORTUNITY OF HEARING TO THE ASSESSEE IN THIS REGARD AND RECOMPUT E THE INTEREST CHARGEABLE UNDER SECTION 201(1A) OF THE ACT. THE G ROUND OF APPEAL 5 RAISED BY THE ASSESSEE IN ALL THE YEARS IS THUS ALL OWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, ALL THE FOUR APPEALS RELATING TO ASSESSMENT YEARS 2007-08 TO 2010-11 FILED BY THE ASSESSEE ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF FEBRUARY, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 28 TH FEBRUARY, 2012 *RATI* COPY TO: TH E APPELLANT/THE RESPONDENT/THE CIT(A)/T HE CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH