Hindustan cables Ltd., Hyderabad V. ACIT, Hyderabad

ITA 443/HYD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3231 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-03-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 06-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S RAMA RAO
• Section: 133A; 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.443/H/2009 ASSESSMENT YEAR : 1997-98 M/S HINDUSTAN CABLES LTD., HYDERABAD. (PAN HYDHO 0264F) VS THE ACIT, CIRCLE 15(1), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI B.V. PRASAD REDDY ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER PASSED BY THE CIT(A) II, HYDERABAD DATE D 29.2.2008 AND PERTAINS TO THE ASSESSMENT YEAR 1997-98. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS IN IT S APPEAL: 1. THE CIT(A) ERRED IN CONFIRMING LEVY OF INTEREST U/S 201(1) AND 201(1A) OF THE IT ACT. THE CIT(A) OUGHT TO HAVE SE EN THAT THE MATTER RELATE TO THE FINANCIAL YEAR 1996-97 RELEVAN T FOR THE ASSESSMENT YEAR 1997-98 AND A PERIOD OF MORE THAN 1 0 YEARS LAPSED AFTER THE END OF PREVIOUS YEAR UNDER CONSIDE RATION. 2. THE CIT(A) OUGHT TO HAVE SEEN THAT THE ORDER OF THE ASSESSING OFFICER SHOULD HAVE BEEN PASSED WITHIN A REASONABLE TIME AND ANY ORDER PASSED BEYOND THE REASONABLE TIME IS NOT VALID. 3. THE CIT(A) ERRED IN CONFIRMING LEVY OF INTEREST U/S 201(1) OF RS.24,50,000/- AND U/S 201(1A) OF THE IT ACT OF RS.68,96,305/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE HEREIN IS A WHOLLY OWNED CENTRAL GOVT. UNDERTAKING AND IS ENG AGED IN THE BUSINESS OF MANUFACTURE OF UNDERGROUND TELEPHONE CA BLES. A ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/2009 2009 2009 2009 HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD 2 SURVEY U/S 133A OF THE IT ACT WAS CONDUCTED ON 23.1 0.2006. DURING THE SURVEY, IT WAS NOTICED THAT THE ASSESSEE COMPANY HAD NOT BEEN REMITTING THE TAX DEDUCTED AT SOURCE U /S 192 WITHIN THE TIME PRESCRIBED IN THE ACT. AS PER THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE COMPANY HAD PAID AR REARS OF SALARY RELATING TO FINANCIAL YEARS 1992-93 TO 1995- 96 DURING THE FINANCIAL YEAR 1997-98 AND HAD DEDUCTED AN AMOUNT O F RS.52.18 LAKHS AS TDS FROM SUCH ARREARS BUT THE SAME WAS NOT DEPOSITED INTO THE GOVT ACCOUNT. WHEN ASKED TO EXPLAIN THE N ON REMITTANCE, THE ASSESSEE COMPANY VIDE LETTER DATED 28.3.2007 STATED THAT DUE TO HUGE CASH LOSS INCURRED BY THE C OMPANY, IT WAS UNABLE TO REMIT THE STATUTORY DUES INCLUDING TH E TDS DEDUCTED. FURTHER THE ASSESSEE HAD PAID INTO GOVT. A/C A PART OF THE TAX DEDUCTED AS BELOW: 10.10.2003 RS.2.68 LAKHS 11.7.2003 RS.5 LAKHS 16.12.2005 RS.20 LAKHS 3.1. HOWEVER, THE EXPLANATION SUBMITTED BY THE AS SESSEE WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS OBSERVED THAT THE OUTSTANDING TDS AMOUNTS ARE NOTHING BUT TAX DEDUCTED FROM THE ARREA RS OF SALARY/WAGES. THE DEDUCTOR COMPANY CANNOT HAVE ANY EXCUSE IN HOLDING BACK THE AMOUNT DEDUCTED FROM THE SALARI ES OF THE EMPLOYEES AND APPLY THE SAME IN SOME OTHER PURPOSE. THE TDS IS MADE FROM THE ARREARS ACTUALLY DISBURSED AND AS SUCH THE FINANCIAL POSITION OF THE COMPANY HAS NOTHING TO DO WITH THE NON REMITTANCE. SINCE THE ASSESSEE HAD PAID RS.27,68,0 00/- INTO THE GOVT. ACCOUNT SUBSEQUENTLY, THE ASSESSING OFFICER T REATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) IN RE SPECT OF THE BALANCE TAX AMOUNTING TO RS.24,50,000/-. CONSEQUEN TLY, THE ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/2009 2009 2009 2009 HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD 3 ASSESSING OFFICER HAS ALSO HELD THAT THE ASSESSEE C OMPANY IS LIABLE TO PAY INTEREST U/S 201(1) AMOUNTING TO RS.6 8,96,305/-. AGGRIEVED AGAINST THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) HAS DECIDED THE ISSUE AGAINST T HE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE U S. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE , IT IS AN ADMITTED FACT THAT THERE WAS ADVANCE PAYMENT OF SAL ARY IN THE ASSESSMENT YEAR UNDER CONSIDERATION. FURTHER, THER E WAS DEDUCTION OF TDS AT RS.52.18 LAKHS AND THE SAME WAS NOT REMITTED TO THE GOVERNMENT ACCOUNT. THE PLEA OF TH E ASSESSEE IS THAT AN AMOUNT OF RS.27.68 LAKHS WAS REMITTED DURIN G THE PERIOD FROM 10.3.2003 TO 6.12.2005. THIS ACTION OF THE ASSESSEE ALSO PROVES THAT THERE WAS A LIABILITY ON THE ASSES SEE TO DEDUCT TDS AND PAY THE SAME TO THE GOVERNMENT. U/S 17 OF THE INCOME TAX ACT, THE SALARY INCLUDES ADVANCE PAYMENT OF SAL ARY ALSO. THE ASSESSEE HAS FAILED TO REMIT THE TDS IN TIME TO THE GOVERNMENT ACCOUNT. BEING SO, THE ASSESSEE HAS TO BE TREATED AS THE ASSESSEE IS IN DEFAULT. ACCORDINGLY, THE ASS ESSEE IS LIABLE TO PAY THE ENTIRE DEDUCTED TDS TO THE GOVT. ACCOUNT AN D ALSO LIABLE TO PAY INTEREST UNDER THE PROVISIONS OF SECTION 201 (1A) FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE O N WHICH SUCH TAX WAS ACTUALLY PAID. ACCORDINGLY, THE ASSES SEE IS LIABLE FOR PAYMENT OF SHORT DEDUCTION OF TAX U/S 201(1) OF THE ACT AND ALSO PAYMENT OF INTEREST AS APPLICABLE U/S 201(1A). HENCE, WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE ASSESSEE. ACCORDINGLY, WE DISMISS THE GROUNDS TAKEN BY THE AS SESSEE. THE ASSESSEE HAS PLACED RELIANCE ON THE EARLIER ORDER O F THIS TRIBUNAL DATED 16.10.2010 IN ITA NOS.1016 TO 1021/HYD/2008 I N ITS OWN CASE FOR THE ASSESSMENT YEARS 2001-02 TO 2006 AND 2 007 WHICH ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/ ITA NO.443/H/2009 2009 2009 2009 HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD HINDUSTAN CABLES LTD., HYDERABAD 4 IS OF NO ASSISTANCE TO THE ASSESSEE. FURTHER, IN O UR OPINION, THERE IS NO TIME LIMIT TO PASS ORDERS U/S 201(1) AN D 201(1A) OF THE INCOME TAX ACT BY THE ASSESSING OFFICER AND AS SUCH, THE GROUND NOS. 1 & 2 ALSO HAVE NO MERIT. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.6.2 011 SD/- G.C. GUPTA SD/- CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED 17 TH JUNE, 2011 COPY FORWARDED TO: 1. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.103, INDIRADEV I NILAYAM, H.NO.3-6-542/4, ST.NO.7, HIMAYATNAGAR, HYDERABAD. C/O HINDUSTAN CABLES LTD, CHERLAPALLY, HYDERABAD. 2. THE ACIT, CIRCLE 15(1), HYDERABAD 3. THE CIT(A) II, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD. NP/