S. Panduranga Rao, Hyd, Hyderabad V. JCIT, Range-15, Hyderabad, Hyderabad

ITA 422/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2514 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Non-deduction of tax
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAH MAN, ACCOUNTANT MEMBER ITA NOS. 419 TO 422/HYD/2016 (A.YS: 2008 - 09 & 2009 - 10) S. PANDURANGARAO, HYDERABAD. PAN: AUOPS 0782 R VS. JCIT, RANGE - 15, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI T . CHAITANYA KUMAR FOR REVENUE : SHRI SUNKU SRINIVAS, DR DATE OF HEARING : 26 .10 .2017 DATE OF PRONOUNCEMENT : 26 .10 .2017 ORDER PER D. MANMOHAN, VP: THESE FOUR APPEALS BY ASSESSEE ARE DIRECTED AGAINST ORDERS PASSED BY LD. CIT(A) - 8, HYDERABAD FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. IN THE FIRST SET OF APPEAL S, PENALTY LEVIED U/S 272A(2) OF THE ACT HAVING BEEN CONFIRMED BY LD. CIT(A) ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. IN THE SECOND SET OF APPEALS, PENALTY LEVIED U/S 271C OF THE ACT IS A SUBJECT MATTER OF DISPUTE BEFORE US. 2. AT THE OUTSET IT MAY BE NOTICED THAT ASSESSEE PAID CERTAIN AMOUNTS FOR ACQUIRING SATELLITE RIGHTS OF FILMS WHICH, ACCORDING TO A.O. , IS IN THE NATURE OF ROYALTY AS DEFINED U/S 9(1) OF THE ACT AND CONSEQUENTLY ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE IN TERMS OF SECTION 194J OF THE ACT FOR THE FAILURE TO DEDUCT TAX AT SOURCE. ACCORDINGLY , ASSESSEE WAS TREATED AS A DEFAULTER U/S 201(1) OF THE ACT AND CONSEQUENT INTEREST WAS CHARGED U/S 201(1A) OF THE ACT. 3. THEREAFTER, A.O. INITIATED PROCEEDINGS U/S 272A(2)(K) OF THE ACT BY HOLDING THAT DEDUCTOR HAS FAILED TO FILE TDS RETURNS BEFORE DUE DATE WITHOUT ANY SUFFICIENT CAUSE. SIMILARLY, PENALTY PROCEEDINGS WERE INITIATED U/S 271C OF THE ACT ON THE GROUND THAT ASSESSEE DID NOT ADHERE TO TDS PROVISIONS AT T HE TIME OF ACQUISITION OF SATELLITE RIGHTS. 2 4. AT THE TIME OF HEARING BOTH THE PARTIES ADMITTED THAT THIS VERY ISSUE HAD COME UP BEFORE THE ITAT B BENCH, HYDERABAD, IN THE PROCEEDINGS ARISING OUT OF AN ORDER PASSED U/S 201(1) AND 201(1A) OF THE ACT , WHER EIN THE BENCH OBSERVED AS UNDER: - 9. FACTS BEING MATERIALLY SAME FOLLOWING THE AFORESAID DECISION OF THE COORDINATE BENCH, WE HOLD THAT THE PAYMENTS MADE BY ASSESSEE TOWARDS ACQUIRING SATELLITE RIGHTS OF FILMS ARE NOT ROYALTY, HENCE PROVISIONS OF SECTIO N 194J WOULD NOT APPLY. IN THE AFORESAID VIEW OF THE MATTER, WE UPHOLD THE ORDER OF LD. CIT(A) BY DISMISSING THE GROUNDS RAISED BY THE DEPARTMENT. 5. SINCE, THE PROVISIONS OF SECTION 194J WOULD NOT APPLY, IT CANNOT BE SAID THAT THE ASSESSEE CAN BE TREATED AS A DEFAULTER OR FOR NON - DEDUCTION OF TAX SO AS TO LEVY PENALTY U/S 271C OF THE ACT. HAVING REGARD TO THE CIRCUMSTANCES AND UPON HEARING BOTH THE PARTIES, WE ARE OF THE VIEW THAT THE ORDERS PASSED U/S 272A(2)(K) AS WELL AS U/S 271C OF THE ACT, BY THE A.O. AS WELL AS LD. CIT(A) , DO NOT SURVIVE AND WE HEREBY HOLD THAT PROCEE DINGS INITIATED UNDER THE ABOVE MENTIONED PROVISIONS ARE NOT IN ACCORDANCE WITH LAW SINCE TH ERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE, AS PER DECISION OF THE ITAT (SUPRA). 6. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. SD/ - SD/ - (S. RIFAUR RAHMAN ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED: 26 TH OCTOBER , 2017 OKK, SR.PS COPY TO 1. TO. CHAITANYAKUMAR, ADVOCATE, FLAT NO.102, GOURI APARTMENT, URDULANE, HIMAYATNAGAR, HYDERABAD. 2. JCIT, RANGE - 15, HYDERABAD. 3. CIT(A) - 8, HYDERABAD. 4. PR. CIT (TDS), HYDERABAD . 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE