TATA COMMUNICATION LTD., MUMBAI V. ACIT - CPC -TDS, GHAZIBAD

ITA 446/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8647 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , HON'BLE ACCOUNTANT MEMBER ITA NO. 446 /MUM/201 9 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., VIDESH SANCHAR BHAVAN M.G. ROAD, FORT MUMBAI 400 001 PAN: AAACV2808C V. ACIT CPC - TDS GHAZIBAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NITESH JOSHI DEPARTMENT BY : SHRI AMIT PRATAP SINGH DATE OF HEARING : 09 .01.2020 DATE OF PRONOUNCEMENT : 20 .07 .2020 O R D E R PER C.N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 60, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 30.11.2018. 2. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS IN RESPECT OF LEVY OF INTEREST U/S. 201(1 A) OF THE ACT FOR DELAY IN DEDUCTION OF TAX AT SOURCE. 2 ITA NO.446/MUM/2019 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., 3. BRIEFLY STATED THE FACTS ARE THAT, ASSESSEE C OMPANY RECEIVED NIL RATE CERTIFICATE NO. 0217BP001H DATED 04.05.2017 FROM TATA TELESERVICES (MAHARASHTRA) LTD (HEREINAFTER CALLED TTML) AND DID NOT DEDUCT TAX AT SOURCE IN ACCORDANCE WITH THE SAME. SUBSEQUENTLY, THE TDS OFFICER VIDE HIS ORDER DATED 23.10.2017 CANCELLED THE NIL RATE CERTIFICATE W.E.F. 31.10.2017 . HOWEVER, THE A SSESSEE CAME TO KNOW ABOUT THIS CANCELLATION O NLY IN THE END OF DECEMBER 2017, BY WHICH TIME PAYMENTS WERE ALREADY MADE BY THE ASSESSEE COMPANY TO THE PAYEE TTML WITHOUT DEDUCTING TAX AT SOURCE DURING THE MONTH OF NOVEMBER 2017 AND DECEMBER 2017 CONSIDERING THE ABOVE NIL RATE CERTIFICATE. HOWEVER, UPON RECEIPT OF THE INTIMATION ABOUT THE WITHDRAWAL OF THE EXEMPTION CERTIFICATE, THE ASSESSEE COMPANY THEN RECOVERED TAX AT SOURCE AT THE NORMAL RATE OF 10% FROM TTML IN RELATION TO THE PAYMENTS MADE T O THEM DURING NOV. AND DEC. 2017 AND PAID THE SAME TO THE GOVERNMENT IN JANUARY 2018 AND FURNISHED THE TDS CERTIFICATES IN FORM 16A TO THE PAYEE. MEANWHILE TTML FILED A WRIT PETITION BEFORE THE HON'BLE BOMBAY HIGH COURT ON SUCH ABRUPT WITHDRAWAL OF THE TD S EXEMPTION CERTIFICATE AND THE HON'BLE BOMBAY HIGH COURT VIDE ITS ORDER DATED 16/25 JANUARY 2018 HELD THE CANCELLATION ORDER DATED 23.10.2017 PASSED BY THE INCOME - TAX DEPT. AS A NON - SPEAKING ORDER AND RENDERING THE SAME AS BAD AND QUASHED THE SAME. HOWEV ER, 3 ITA NO.446/MUM/2019 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., THE ASSESSING OFFICER LEVIED INTEREST U/S. 201(1)(A) FOR DELAY IN REMITTANCE OF TDS WHICH THE LD.CIT(A) UPHELD. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT PURSU ANT TO THE DIRECTION OF THE HON'BLE BOMBAY HIGH COURT, THE TDS EXEMPTION CERTIFICATE WAS RESTORED BY ANOTHER CERTIFICATE NO 0218AG041E WHICH WAS APPLICABLE FOR THE ENTIRE PERIOD OF 28.04.2017 TO 31.03.2018 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVIDENCE OF THESE NIL RATE TDS CERTI FICATES FROM THE TRACES SITE ARE ATTACHED FOR READY REFERENCE IN ANNEXURE E . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E DE MAND HAS ARISEN SINCE THE PAYMENT WERE MADE TO TTML IN NOVEMBER 2017 WHEREAS THE TDS HAS BEEN DEDUCTED AT SOURCE ON 2.01.201 8 AND PAID TO THE GOVERNMENT ON 17.01.2018. THE SAME HAS BEEN CONSIDERED AS A LATE DEDUCTION' BY THE ASSESSING OFFICER AND INTEREST ON 'LATE DEDUCTION' HAS BEEN CHARGED THEREON FOR 3 MONTHS; I . E NOVEMBER 2017 TO JANUARY 2018. LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT I T MAY BE APPRECIATED THAT AFTER TAKING INTO ACCOUNT OF ALL THE ACTIONS WHICH TOOK PLACE AS ABOVE IT CAN NOW SAFELY BE UNDERSTOOD THAT THE TDS EXEMPTION CERTIFICATE WAS VALID THROUGHOUT THE FINANCIAL YEAR 20 17 - 18 AND IN THE LIGHT OF WH ICH , THERE IS NO QUESTION OF 'LATE DEDUCTION' AT ALL AND HENCE NO INTEREST AMOUNT 4 ITA NO.446/MUM/2019 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., WHAT SO EVER BECOMES PAYABLE. THEREFORE, LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT INTEREST ON LATE DEDUCTION OUGHT TO BE DELETED AS NO MORE PAYABLE. 5. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT TTML FILED WRIT PETI TI ON NO. 2701 OF 2017 BEFORE HON'BLE BOMBAY HIGH COURT BY ORDER DAT ED 16/25.01.2018 AND THE HON'BLE HIGH COURT QUASHED THE ORDER PASSED BY THE ASSESSING OFFICER WITHDRAWING THE EXEMPTION CERTIFICATE ISSUED TO THE ASSESSEE FOR NIL DEDUCTION OF TDS . BY VIRTUE OF THE ORDER OF THE HON'BLE BOMBAY HIGH COURT QUASHING THE WITHD RAWAL ORDER PASSED BY THE TDS OFFICER , T HE CERTIFICATE DATED 04.05.2017 ISSUED BY THE ASSESSING OFFICER FOR NIL RATE OF T AX GOT REVIVED WHEREBY THE POSITION PRIOR TO CANCELLATION OF THE CERTIFICATION ON 23.10.2017 WAS RESTORED. FURTHER, IN VIEW OF A FRESH CERTIFICATE ISSUED FOR NIL TDS AND IS APPLICABLE FOR THE PERIOD 28.04.2017 TO 31.03.2018 NIL CERTIFICATE GOT REVIVED AND THE QUESTION OF DEDUCTION OF TDS WILL NOT ARISE. IN THAT CASE THERE CANNOT BE ANY DELAY. IN THE CIRCUMSTANCES THERE IS NO QUESTION O F LEVY OF INTEREST U/S. 201(1A) OF THE 5 ITA NO.446/MUM/2019 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., ACT. THUS, WE DIRECT THE ASSESSING OFFICER TO DELETE THE INTEREST LEVIED U/S. 201(1A) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 8. BEFORE PARTING , WE NOTICED THAT THIS APPEAL WAS HEARD ON 09.01.2020 AND THE PRONOUNCEMENT IS DELAYED DUE TO LOCKDOWN IN VIEW OF COVID - 19 PANDEMIC. THE PRONOUNCEMENT IS AS PER RULE 34(5) OF INCOME TAX APPELLATE TRIBUNAL RULES, 1963 AND HON'BLE BOMBAY HIGH COURT DECISION VIDE ORDERS DATED 15.04.2020 AND 15.06.2020 EXTENDING THE TIME BOUND PERIODS SPECIFIED BY HON'BLE HIGH COURT BY REMOVING THE PERIOD UNDER LOCKDOWN. THIS ASPECT WAS ALSO DEALT WITH IN DETAIL BY THE MUMBAI BENCH OF THE TRIBUNAL IN CASE OF DCIT V. JSW STEEL VIDE ORDER DATED 15.05.2020. ORDER PRONOUNCED ON 20 . 07.2020 AS PER RULE 34(4) OF ITAT RULES BY PLACING THE PRONOUNCEMENT LIST IN THE NOTICE BOARD. SD/ - SD/ - ( S. RIFAUR RAHMAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20 / 0 7 / 2020 GIRIDHAR , S R. PS 6 ITA NO.446/MUM/2019 (A.Y: 2018 - 19) M/S. TATA COMMUNICATION S LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM