The Income-tax Officer, Amritsar. V. The Registrar Guru Nanak Dev University, Amritsar.

ITA 462/ASR/2011

• Counselvise Citation: 46220914 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T S AURORA
• Keywords: Question of law; Non-deduction of tax; Ignorance of law
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.462 & 463(ASR)/2011 ASSESSMENT YEARS:2008-09 & 2009-10 PAN :AMRG10067B INCOME TAX OFFICER, VS. THE REGISTRAR, (TDS)-II, AMRITSAR. GURU NANAK DEV UNIVERSITY, AMRITSAR. (APPELLANT) (RESPONDENT) C.O. NOS. 22 & 23(ASR)/.2011 (ARISING OUT OF I.T.A. NOS.462 & 463(ASR)/2011 ASSESSMENT YEARS:2008-09 & 2009-10 PAN :AMRG10067B THE REGISTRAR, VS. INCOME TAX OFFICER, GURU NANAK DEV UNIVERSITY, (TDS)-II, AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SH. MAHAVIR SINGH, DR ASSESSEE BY: SH. T.S.AURORA, ADVOCATE DATE OF HEARING: 20/05/2014 DATE OF PRONOUNCEMENT:23/05/2014 ORDER PER BENCH ; THE REVENUE HAS FILED PRESENT TWO APPEALS AGAINST THE TWO DIFFERENT IMPUGNED ORDERS OF CIT(A), AMRITSAR, EACH DATED 03. 06.2011 RELATING TO ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 2 ASSESSMENT YEAR 2008-09 & 2009-10. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS IN THESE APPEALS. AS THE ISSUES INVOLVED IN THE APPEALS OF THE REVENUE AND COS OF THE ASSESSEE ARE IDENTICAL, THES E WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE. THE GROUNDS TAKEN BY THE REVENUE IN TH E APPEALS AND IN THE C.OS BY THE ASSESSEE ARE IDENTICAL EXCEPT VARIATION IN AMOUNTS. 2. THE GROUNDS RAISED IN ITA NO.462(ASR)/2011 ARE A S UNDER, WHICH ARE SIMILAR IN ITA NO.463(ASR)/2011: 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) AMRITSAR HAS ERRED IN DELETING THE DEMAND AT RS.24, 86,365/- RAISED ON ACCOUNT OF RENT FREE ACCOMMODATION PROVID ED AT CONCESSIONAL RENT TO ITS EMPLOYEES BY THE UNIVERSIT Y. 2. THAT THE LD. CIT(A) HAS ERRED IN TREATING THE UN IVERSITY AS STATE. 3. THAT THE HONBLE JURISDICTIONAL ITAT, AMRITSAR B ENCH HAS HELD IN THE CASE OF DR. TEJINDER SINGH, DR. HARJINDER SI NGH PAL SINGH & HARPREET KAUR VS. ITO WARD 5(2), AMRITSAR REPORTE D IN ITA NO.543(ASR)/2008 THAT THE EMPLOYEES OF G.N.D.U CANN OT BE CONSIDERED AS EMPLOYEES OF THE STATE GOVT. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY OR MORE GROUNDS OF APPEAL. 3. IN C.O. NO.22(AASR)/2011, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. CIT(A) HAS ERRED IN CONFIRMING THE DEMAND RAISED U/ S 194C TREATING THE RUNNING OF COOPERATIVE MESS OF DIFFERE NT HOSTELS BY THE STUDENTS AS CONTRACT PAYMENT. ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 3 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN DIRECTING THE ITO (TDS) FOR VER IFICATION FROM THE UNIVERSITY REGARDING PROFESSIONAL CHARGES PAID TO PROFESSIONALS . THE PAN OF PROFESSIONALS HAS ALREAD Y BEEN PLACED ON THE FILE OF THE LD. CIT(A). 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS RIGHTLY ALLOWED THE APPEAL REGARDING HOU SE RENT ALLOWANCE FOLLOWING THE DECISION OF JURISDICTIONAL P & H HIGH COURT AS WELL AS THAT OF ITAT, CHANDIGARH BENCH DAT ED 12.03.2008 WHICH WAS NOT CITED BEFORE THE ITAT, AMR ITSAR IN THE CASE OF DR. TEJINDER SINGH, DR. HARINDER PAL SI NGH AND MRS. HARPREET KAUR. 4. FIRST OF ALL, WE TAKE UP APPEAL OF THE REVENUE IN ITA NO.462 (ASR)/2011 & CO NO.22(ASR)/2011 FOR THE A.Y. 2008-0 9. THE FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE GURU NANAK DEV UNIVERSITY, AMRITSAR IS REPRESENTED (THROUGH ITS DDO/RESPONSIBLE PERSON, TH E REGISTRAR). THE AO CARRIED OUT TDS SURVEY/INSPECTIONS OF THE ASSESSEE FROM 3.10.2009 TO 13.10.2009 AND FOUND FAULTS OF VIOLATION OF PROVISI ONS OF SECTION 192, 194-C AND 194-J. THE AO HAS PASSED ORDER DATED 3.3.2010 FOR THE ASSESSMENT YEARS 2007-08 TO 2009-10 AND CREATED DEMAND U/S 201 (1) R/W SEC. 201(1A) HOLDING THE ABOVE RESPONSIBLE PERSON AS ASSESSEE IN DEFAULT. 5. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY FOR THE AS SESSMENT YEAR UNDER CONSIDERATION, WHO VIDE HIS IMPUGNED ORDER DATED 03 .06.2011 PARTLY ALLOWED ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 4 THE APPEAL FILED BY THE ASSESSEE. NOW, THE REVENUE AS WELL AS THE ASSESSEE FILED THE APPEAL AND C.O. AGAINST THE IMPUGNED ORD ER BEFORE THIS BENCH. 6. AT THE TIME OF HEARING, THE LD. DR RELIED UPON T HE ORDER PASSED BY THE ASSESSING OFFICER AND THE CONTENTIONS RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL. HE ALSO RELIED UPON THE ORDER PASSED B Y THIS BENCH IN THE CASE OF DR. TEJINDER SINGH & OTHERS VS. ITO WARD 5(2), AMRI TSAR IN ITA NO.453(ASR)/2008 AND OTHERS FOR THE A.Y. 2002-03 , DATED 14 TH JANUARY, 2009. LD. DR STATED THAT ITAT, AMRITSAR BENCH VIDE ORDER DATED 14.01.2009 HAS HELD THAT THE ASSESSEE CANNOT BE STATED TO BE AN EMPLOYEE OF THE STATE GOVT., AS SUCH THE ASSESSEE HAS NOT FULFILLED THE C ONDITIONS LAID DOWN IN SECTION 17(2) READ WITH RULE 3(1) OF THE INCOME TA X RULES, 1962. HE FURTHER STATED THAT THIS BENCH HAS ALSO HELD THAT THE ASSES SEE IS AN EMPLOYEE OF THE GURU NANAK DEV UNIVERSITY WHICH IS NEITHER UNION O R STATE GOVERNMENT. 7. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESSE E, MR. T.S.AURORA, ADVOCATE RELIED UPON THE ORDER PASSED BY THE LD. C IT(A) AND THE GROUNDS RAISED IN HIS CROSS OBJECTION. HE STATED THAT THE ISSUE WHETHER UNIVERSITY IS A STATE AS DEFINED UNDER ARTICLE 12 OF THE CONSTITU TION OF INDIA OR NOT. THIS ISSUE HAS ALREADY BEEN DECIDED BY THE JURISDICTIONA L HIGH COURT IN CWP NO.2462 OF 1994 DATED 23.5.1994 IN THE CASE OF SU KHWINDER SINGH VS. PAU, LUDHIANA AS WELL AS BY THE ITAT, CHANDIGARH BE NCH IN ITA NO.1080 ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 5 TO 1085/CHANDIGARH/2005 DATED 12.3.2008 FOR THE A. Y. 2004-05 IN THE CASE OF PROFESSOR-CUM HEAD OF DEPARTMENT OF MATH, STATS & PHYSICS PAU, LUDHIANA V. ITO VII(4) TDS, LUDHIANA & ORS. AS REG ARDS TO THE OTHER ISSUE REGARDING APPLICABILITY OF SECTION 194C AND 194J IN THE CASE OF THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE AS SESSEE HAS FILED ALL THE DOCUMENTARY EVIDENCES BEFORE REVENUE AUTHORITIES, W HICH HAVE NOT BEEN PROPERLY CONSIDERED BY BOTH THE AUTHORITIES. HE FU RTHER REQUESTED THAT THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AU THORITY MAY BE MODIFIED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE B Y ACCEPTING THE C.O. FILED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE H AS ALSO FILED A SMALL PAPER BOOK CONTAINING PAGES 1 TO 143 IN WHICH HE HAS ATTA CHED REPLY TO ITO (TDS), PUNJAB GOVT. CIRCULATION REGARDING HOUSE REN T ALLOWANCE DT. 20.07.1998, DOCUMENTS REGARDING PROCEDURE ADOPTED F OR MAINTENANCE OF HOSTEL MESSE, PHOTOCOPY OF BILLS OF MATERIAL PURCHA SED FOR MESSES, ASSESSMENT OF ITO (TDS) DT. 03..03.2010, WRITTEN SU BMISSION DT. 25.04.2011, ORDER OF ITAT CHANDIGARH BENCH, ORDER O F HONBLE P & H COURT, ORDER OF ITAT, DELHI BENCH, ORDER OF CIT(A), LUDHIANA, DIFFERENT NOTIFICATION ISSUED BY THE GOVT. OF PUNJAB DEPARTME NT OF FINANCE REGARDING RECOMMENDATION OF FOURTH PUNJAB PAY COMMISSION, ORD ER OF ITAT, AMRITSAR BENCH, LIST OF PAN OF PROFESSIONAL , ORDER OF CIT(A) AMRITSAR ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 6 A/Y 2008-09, 2009-10 AND CASE LAWS RELIED UPON REGA RDING SHORT DEDUCTION & WAIVER OF INTEREST U/S 201(1A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD ESPECIALLY THE DOCUMENTARY EVIDENCES FILED B Y THE ASSESSEE ALONG WITH THE ORDERS PASSED BY THE REVENUE AUTHORITIES. BASI CALLY, THERE ARE THREE ISSUES INVOLVED IN THE PRESENT APPEAL AND THE C.O. AND ONE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND TWO ISSUES REGARDING APPLICABILITY OF SECTION 194C AND 194-J HAVE BEEN DECIDED AGAINST THE ASSESS EE BY THE LD. FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER. FOR THE SAKE OF CONVENIENCE, THE RELEVANT FINDINGS OF THE LD. FIRST APPELLATE ON THE ISSUES IN DISPUTE ARE REPRODUCED AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE APPELLANTS WRITTEN SUBMISSIONS DOCUMENTS AND CASE LAWS INCORPORATED IN THE FORM OF PAPER BOOK TOGETHER WITH THE AOS FINDINGS GIVEN IN HIS ORDER UNDER APPEAL. ALTHOUGH THE APPELLANT HAS RAISED 8 GROUNDS OF APPE AL BUT THE MAIN ISSUES AGITATED ARE THREE ONLY. 6.1. (I) GROUNDS NO. 1,2,7 & 8 BEING GENERAL IN NATURE, REQUIRE NO COMMENTS. 6.2. A) AS TO WHETHER THE GND UNIVERSITY CAN BE SAFELY TERMED AS STATE AND IT AND ITS STAFF AND FACULTY MEMBERS AR E EMPLOYEES OF A STATE GOVT. AND IF SO THE PERQUISITE GRANTED U/S 17 (20 IN THE SHAPE OF RENT FREE ACCOMMODATION CAN BE INCLUDED IN THE DEFI NITION OF SALARY OR NOT AND ACCORDING LIABLE TO ATTRACT THE TDS PROV ISIONS U/S 192 OF THE ACT. HOWEVER, THE AO CONSEQUENT UPON GNDUS TDS INSPECTION CONDUCTED ON 7 TH TO 13 TH OCT., 2009 HELD THAT DDO, GNDU, AMRITSAR (THE REGISTRAR) IS LIABLE TO DEDUCT TDS U/S 192 ON THE PERQUISITE OF RENT FREE ACCOMMODATION PROVIDED TO ITS EMPLOYEES B EING A PART OF ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 7 SALARY U/S 17(2) OF I.T.RULES 1961 R/W RULE 3(1)(II ) OF I.T.RULES, 1962 AFTER CONSIDERING THE APPELLANTS EXPLANATION & CI TING THE CASE LAWS IN SUPPORT OF HIS FINDINGS AND HELD HIM BEING THE R ESPONSIBLE PERSON AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND CR EATED THE FOLLOWING DEMAND: SR. FIN YR A/YR TDS U/S 201(1) INTT. U/S 201(IA) TOTAL TAX PAYABLE 1 2007-08 2008-09 20,54,624 4,31,741 24,86,095 ON THE OTHER HAND, THE LD A/R FOR THE APPELLANT HAS VEHEMENTLY RELIED UPON THE JUDGMENT OF JURISDICTIONAL HONBLE PUNJAB & HARYANA HIGH COURT (DB) IN CWP 2462 OF 1994 DATED 23.5.1994 IN THE CASE OF SUKHWINDER SINGH VS. PAU, LUDHIANA WHEREIN IT HAS B EEN HELD THAT UNIVERSITY IS A STATE AS DEFINED UNDER ARTICLE 12 O F THE CONSTITUTION OF INDIA, HONBLE ITAT, CHANDIGARH BENCH DECISION DATE D 12.3.08 IN ITA NOS 1080 TO 1085/CHANDIGARH/2005 FOR THE ASSESS MENT YEAR 2004-05 IN THE CASE OF PROFESSOR-CUM-HEAD OF DEPART MENT OF MATH, STATS & PHYSICS PAU, LUDHIANA V. ITO VII(4)TDS, LU DHIANA & ORS; DECISION OF HONBLE DELHI ITAT BENCH IN ITA NO.2866 /IT/CIT9A0- II/LDH/06-07 FOR THE ASSTT. YEARS 2001-02 TO 2004-0 5 IN THE CASE OF THE HEAD, DEPTT OF VETYU, PATHOLOGY, PAU, LUDHIANA OF THE LD. CIT(A)-II, LUDHIANA WHERE IT HAS BEEN HELD THAT UNI VERSITY IS A STATE AS DEFINED UNDER ARTICLE 12. ACCORDINGLY, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT (SUPRA) AS WELL AS THAT OF ITAT, CHANDIGARH BENCHS DECISION DATED 12.3.2008 (SUPRA) , THE AO IS DIRECTED TO DELETE THE DEMAND RAISED ON ACCOUNT OF LESS DEDUCTION OF TAX AT SOURCE U/S 192 R/W SEC. 201(1) AND CONSEQUEN TLY DEMAND RAISED IN RESPECT OF INTEREST CHARGED U/S 201(1A) OF THE A CT, DETAILED ABOVE,. THIS DISPOSES OF APPELLANTS GROUND NO.4 IN FAVOUR OF THE APPELLANT. 6.3. NOW THE SECOND ISSUE OF NON DEDUCTION/DEPOSIT OF TDS U/S 194C ON CONTRACT PAYMENTS MADE THROUGH CHEQUES ISSUED FR OM P&SB, UNIVERSITY CAMPUS, AMRITSAR MAINTAINED UNDER THE NA ME OF REGISTRAR, GNDU, ASR AND RUN AND OPERATED BY WARDENS OF EACH M ESS WHO IN TURN ISSUE THE SAME TO MESS CONTRACTORS EITHER IT I S RUN PRIVATELY OR UNDER COOPERATIVE SYSTEM MANNER AND THE AO HAS HELD THAT SINCE THE DEAN OF THE UNIVERSITY ARE ALLOTTING THE MESSES T O THE CONTRACTORS ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 8 AND BEING AUTHORIZED FOR MAKING PAYMENTS TO THE CON TRACTORS FOR CARRYING OUT WORK OF CATERING OF FOODS, THE DEAN OF UNIVERSITY BEING THE RESPONSIBLE PERSON HAS FAILED TO DEDUCT/DEPOSIT TDS U/S 194C ON THE MESS CONTRACT PAYMENT REIMBURSED DURING THE PR EVIOUS RELEVANT TO THE THREE ASSESSMENT YEARS 2007-09 TO 2009-10 AN D CONSEQUENTLY AFTER CHARGING INTEREST U/S 201(1A EITHER FOR NON P AYMENT OR DELAYED TDS PAYMENT CREATED TOTAL DEMANDS OF RS.4,01,288/- , RS.4,09,389/- AND RS.3,79,107/- RESPECTIVELY FOR THE ABOVE MENTIO NED 3 ASSESSMENT YEARS. ON THE OTHER HAND, THE LD. AR FOR THE APPELL ANT HAS CONTENDED THAT SINCE THE MESSES ARE NOT COVERED UNDER AUDIT O F UNIVERSITY ACCOUNT BY THE PO PUNJAB GOVT. AND THE MESSES ARE R UN ON CO- OPERATIVE BASIS UNDER THE CONTROL OF STUDENTS COMMI TTEE WHICH IS BEING SUPERVISED BY THE WARDEN OF HOSTELS FOR ITS EFFECTI VE RUNNING. THE PURCHASES ARE DIRECTLY MADE IN THE NAME OF HOSTEL W ARDEN AND SALARIES ARE PAID TO THE COOK AND OTHER STAFF DIREC TLY BY THE ELECTED CO- OPERATED MANAGEMENT INDEPENDENTLY BY EACH HOSTEL. IT IS ADDED THAT THE ENTIRE POSITION WAS EXPLAINED TO THE AO BY FILI NG WRITTEN EXPLANATION WHO HAS ALLEGED IGNORED THE SAME. HOWEV ER, IT IS SEEN THAT THE LD. AO HAS BROUGHT ON RECORD BY INCORPORAT ING SPECIFICALLY THE NAMES OF THE CONTRACTORS AND THE LETTERS NO. AN D DATES OF SUCH LETTERS ALLOTTING THE CONTRACTS TO SUCH CONTRACTORS BY THE DEAN UNIVERSITY THOUGH FOR THE SAKE OF STUDENT WELFARE. THE AO HAS BEEN ABLE TO ESTABLISH THE RELATIONSHIP OF CONTRACTOR AL LOTTEE AND THE CONTRACTORS MEANT FOR RUNNING MESS OF VARIOUS UNIVE RSITY HOSTELS, IRRESPECTIVE OF THE FACT THAT THE VOUCHERS/BILLS AR E OBTAINED IN THE NAME OF THE WARDEN OF EACH HOSTEL. IT IS NOT THE AP PELLANTS CASE THAT THE MESS CONTRACTORS ARE NOT PRIVATE CONCERNS/OUTSI DERS RENDERING SERVICES AND THEY ARE NOT ENGAGED IN ENSURING SUPPL IES OF FOOD MATERIALS AS PER SPECIFICATIONS OF THE WARDEN OF TH E HOSTEL MESSES BY RECRUITING THEIR EMPLOYEES LIKE COOK, MAIDEN AND WA ITERS ETC. FROM ALL THESE FACTS AND CIRCUMSTANCES, I AM OF THE CONSIDE RED OPINION, THE PROVISIONS OF SECTIONS 194C ARE CLEARLY CONTRAVENED AND VIOLATED AND FOR SUCH INFRINGEMENT OF SPECIFIC PROVISIONS OF INC OME TAX LAW, THE AO SEEMS TO BE JUSTIFIED IN HOLDING THE DEAN OF GND U (AUTHORITY ALLOTTING THE MESSES OF VARIOUS HOSTELS OF THE UNIV ERSITY TO THE MESS CONTRACTORS) BEING THE RESPONSIBLE PERSON DECLARED AS AN ASSESSEE IN DEFAULT FOR INFRINGEMENT OF THE ABOVE PROVISIONS AN D THE DEMAND CREATED U/S 201(1) R/W SEC. 201(1A0 OF THE ACT AT R S.4,01,288/-, RS.4,09,389/- AND RS.3,89,107/- FOR THE PREVIOUS YE AR RELEVANT TO THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 IS HE REBY CONFIRMED ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 9 UPHOLDING THE AOS ACTION ON THIS ACCOUNT. THIS DI SPOSES OF APPELLANTS GROUND NO. 3 & 5 ACCORDINGLY. 6.4 THE LAST POINT AGITATED IN APPEAL PERTAINS TO T HE AOS ACTION OF CREATING DEMAND U/S 201(1) R/W SEC. 20(1A) FOR CONT RAVENTION OF THE PROVISIONS OF SEC 194-J FOR EITHER NON DEDUCTION OR SHORT DEDUCTION OF TDS ON PAYMENTS FOR LEGAL/PROFESSIONAL CHARGES. TDS WAS LIABLE @ 5% UPTO 31.5.2007 AND W.E.F. 1.6.07 CONSEQUENT UPON AMENDMENT OF I.T. LAW RATE OF TDS WAS ENHANCED TO 10%. THE A.O . IN HIS ORDER UNDER APPEAL HAS INCORPORATED YEAR WISE DETAILS O F PROFESSIONAL PAYMENTS MADE TO VARIOUS PERSONS INCLUDING ADVOCATE S AND ON THE BASIS OF SHORTFALL WORKED OUT, HAS DETERMINED THE T DS DEMAND BY HOLDING THE RESPONSIBLE PERSON VIZ THE REGISTRAR, G NDU, AMRITSAR AS A PERSON IN DEFAULT FOR NOT COMPLYING WITH THE PROVISIONS OF SEC. 194-J AND ACCORDINGLY CREATED TOTAL TDS DEMAND OF R S.4,20,210/-, RS.29,16,16,124/- AND RS.18,13,001 FOR THE PREVIOUS YEARS RELEVANT TO THE ASSESSMENT YEARS 2007-08 TO 2009-10. ON THE OT HER HAND, THE LD. AR FOR THE APPELLANT HAS CONTENDED THAT SINCE ALL THE PERSONS TO WHOM SUCH PROFESSIONAL CHARGES HAVE BEEN PAID ARE E XISTING ASSESSES AS PER THEIR RESPECTIVE PAN AND ADDRESSES FURNISHED IN THE LIST APPENDED IN THE PAPER BOOK PAGE 115-A AND SINCE FIR STLY THE MISTAKE IS BONAFIDE HAS OCCURRED DUE TO THE IGNORANCE OF LA W ON THE PART OF THE UNIVERSITY STAFF AND SECONDLY, ALL THE PERSONS ARE FOUND TO BE TAX PAYERS, AS SUCH ULTIMATELY THERE WAS NO REVENUE LOS S, SO THE DEMAND CREATED (DETAILED SUPRA) IS LIABLE TO BE CANCELLED AS THERE IS NEITHER ANY MALAFIDE INTENTION ON THE PART OF THE R.P. AND SECONDLY THE APPELLANT HAS DISCHARGED ITS ONUS HONESTLY AND FOR THIS PURPOSE, RELIANCE HAS BEEN HEAVILY PLACED ON THE FOLLOWING H ONBLE HIGH COURT INCLUDING THE JURISDICTIONAL HONBLE PUNJAB & HARYA NA HIGH COURT JUDGMENT IN THE CASE OF CIT V. LALLY MOTORS REPORTE D IN 311 ITR 29 (P&H). A) CIT V. LALLY MOTORS 311 ITR 29 (P&H) TDS U/S 194-I(A0 IS ATTRACTED AND ASSESSEE HAS JUST IFIED IN DEDUCTING TDS @ 50%.. B) CIT V. LIFE INSURANCE CORPN. OF INDIA 166 ITR 19 1 (P&H) AFTER COMPLETION OF REGULAR ASSESSMENT OF AN EMPLOY EE AND FULL PAYMENT OF TAX BY HIM, ITO (TDS) CANNOT UNDER S. 20 1 DEMAND FURTHER TAX FROM THE EMPLOYER REGARDING TDS SHORT DEDUCTED. ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 10 C) CIT V. M.P. AGRO MORARJI FERTILIZERS LTD. 176 IT R 282 (MP) REGULAR ASSESSMENT OF EMPLOYEE HAVING BEEN COMPLETE D AND TAX PAID BY EMPLOYEE IN FULL, ITO CANNOT REQUIRE THE EMPLOYE R UNDER SEC. 201 TO PAY TAX SHORT DEDUCTED BY EMPLOYER. D) CIT VS. ADIDAS INDIA MARKETING PVT. LTD. 288 ITR 379 (DELHI) INTT. U/S 201(1A0 TAX PAID BY PAYEE-EVEN IN THE AB SENCE OF EXPLANATION TO SEC. 191, THE POSITION IN LAW ALWAYS WAS THAT THE ASSESSEE WHO WAS OBLIGED TO , HAD NOT DEDUCTED TAX AT SOURCE, COULD NOT BE ASKED TO PAY THE SAME WHERE THE DEDUCTEE HAS PAID IT BY SHOWING THE AMOUNT RECEIVED BY HIM AS HIS INCOME. T HERE IS NO JUSTIFICATION TO CHARGE INTEREST U/S 201(1A) FOR AN Y PERIOD AFTER THE DATE ON WHICH TAX HAS BEEN ACTUALLY PAID BY THE PAY EE DECISION OF THE TRIBUNAL DOES NOT CALL FOR ANY INTERFERENCE N O. SUBSTANTIAL QUESTION OF LAW ARISES. IN THIS JUDGMENT, FOLLOWING REFERENCES HAVE BEEN MADE I.E. UCO BANK V. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC) AND BOARDS CIRCULAR NO.715 DOT. 8.8.9 5 & BOARDS INSTRUCTION NO. 275/201/95-IT(B) DATED 29.1.1997. E) CIT V. RISHIKESH APARTMENTS CO-OP HOUSING SOCIET Y LTD. 253 ITR 310 (GUJ) ASSESSEE-SOCIETY DID NOT DEDUCT ANY AMOUNT OF TAX W HICH IT WAS REQUIRED TO DEDUCT AS PER THE PROVISIONS OF S. 194C .- PAYEE CONTRACTOR HAD, HOWEVER, PAID ADVANCE TAX AS WELL A S TAX ON SELF ASSESSMENT WITH RESPECT TO THE AMOUNT RECEIVED BY I T FROM THE ASSESSEE-SOCIETY- THERE IS NO QUESTION OF LEVYING A NY INTEREST ON THE ASSESSEE AS THE AMOUNT WHICH WAS PAYABLE TO THE REV ENUE HAD BEEN DULY PAID. THEREFORE, TAX PAID BY THE CONTRACTOR IN ITS OWN CASE BY WAY OF ADVANCE TAX AND SELF ASSESSMENT TAX SHOULD B E DEDUCTED FROM THE GROSS TAX THAT THE ASSESSEE SHOULD HAVE DEDUCTE D UNDER SECTION 194C WHILE COMPUTING INTEREST CHARGEABLE U/S 201(1A ) FOR FAILURE TO DEDUCT TAX FROM PAYMENT MADE TO CONTRACTOR. F) CIT VS. MOHINDRA & MOHINDRA LTD. (2000 ) 242 ITR 187 (BOM.) THE HONBLE SUPREME COURT REJECTED THE DEPARTMENTS SLP IN THE CASE OF CIT, MUMBAI V. MOHINDRA & MOHINDRA LTD. S.L .P. (CV) NOS. 505, 507 OF 2000 THEREBY CONFIRMING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN ITA NO.68 OF 1998 WHEREBY THE HIGH COURT HAS DISMISSED THE DEPARTMENTS REFERENCE APPLICATIO N U/S 256(2) ON THE QUESTION WHETHER, WHEN REGULAR ASSESSMENT OF TH E EMPLOYEE WAS ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 11 MADE AND TAX WAS PAID BY HIM, IT WAS NOT CORRECT T O HOLD THAT THE EMPLOYER WAS STILL IN DEFAULT IN RESPECT OF SHORT D EDUCTION OF TAX. THE TRIBUNAL FOUND THAT THE ASSESSEE HAD FILED ITS ANNU AL RETURN UNDER SECTION 206 AND THAT PAYMENT TO THE GOVT. WAS MADE WITHIN THE STIPULATED TIME. THE TRIBUNAL FOUND THAT SEC. 201(1 ) WAS NOT APPLICABLE. AFTER TAKING GROSS VIEW OF THE MATTER, IT IS FOUND THAT WHEREAS THE AO HAS BEEN ABLE TO MAKE OUT A CASE THAT THE APPELLANT HAS FAILED TO EITHER DEDUCT TAX OR TAX DEDUCTED HAS BEEN FOUND SHORT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 194J ON THE PROFESSIONAL CHARGES PAID BY IT AND SO IT IS A CASE LIABLE TO TDS DEMAND U/S 201(1) R/W SECTION 201(1A) OF THE ACT, WHEREAS ON THE OTHER HAND, THE LD. AR HAS IN OTHER WORDS ADMITTED THAT THE DEFAULT HAS BEEN CAUS ED BY THE APPELLANTS EMPLOYEES DUE TO IGNORANCE OF LAW AND A MENDMENT IN THE RATE OF TDS ENHANCED FROM 5% TO 10% FROM 1.6.2007 A ND IN THE ALTERNATIVELY PLEADED SINCE THE PAYEES ARE ALL INC OME TAX PAYERS BY HIGHLIGHTING THEIR RESPECTIVE PAN AND ADDRESSES, S O THE DEMAND CREATED BY THE AO IS REQUIRED TO BE CANCELLED. BUT, I FIND THAT THE APPELLANT IN THIS CASE HAS FAILED TO ESTABLISH THAT THE RESPECTIVE PAYEES HAVE FILED THEIR RESPECTIVE RETURNS FOR ALL THE THR EE ASSESSMENT YEARS AND ACCOUNTED FOR AND INCLUDED THE PROFESSIONAL CHA RGES RECEIVED BY THEM IN THEIR INCOME COMPUTATION SHEETS AND AFTER D OING THE SAME HAVE DULY DISCHARGED THEIR RESPECTIVE TAX OBLIGATI ONS CORRECTLY AND BONAFIDELY BY FURNISHING THEIR CONFIRMATIONS AND EV IDENCE IN SUPPORT OF ITS CONTENTIONS. IN THE ABSENCE OF SUCH POSITIVE MATERIAL HAVING NOT BEEN BROUGHT ON RECORD, I AM OF THE CONSIDERED OPIN ION, EVEN AFTER SHOWING FULL REGARD TO THE ABOVE CITED CASE LAWS, T HESE ARE FOUND QUITE DISTINGUISHABLE AND INAPPLICABLE TO THE FACTS OF TH E PRESENT CASE, THAT THE AO IS QUITE JUSTIFIED IN CREATING DEMAND U/S 201(1) R/W SECTION 201(1A) FOR VIOLATION OF PROVISIONS OF SECTION 194- J AMOUNTING TO RS.4,20,210/-, RS.29,16,124/- AND RS.18,13,001/- FO R THE ASSESSMENT YEARS 2007-08 TO 2009-10 RESPECTIVELY AND HIS ACTIO N TO THIS EFFECT IS HEREBY CONFIRMED REQUIRING NO INTERFERENCE WITH TH E RIDER THAT IN CASE THE APPELLANT IS ABLE TO JUSTIFY DISCHARGE OF TAX L IABILITY IN THE HANDS OF THE EACH PAYEE BEFORE THE AO, HE IS AT LIBERTY TO R ECTIFY HIS ORDER BY RECOURSE TO THE PROVISIONS OF SECTION 154 OF THE AC T KEEPING IN VIEW THE DECISIVE CASE LAWS, REPORTED AS UNDER: ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 12 I) UCO BANK V. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC) II) CIT V. MOHINDRA & MOHINDRA LTD. (2000) 242 ITR 187 (BOM) III) CIT V. RISHIKESH APARTMENTS CO-OP. HOUSING SOC IETY LTD. 253 ITR 310 (GUJ) THIS DISPOSES OF APPELLANTS GROUND OF APPEAL NO.6 ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 8.1. WE HAVE THOROUGHLY GONE THROUGH THE ORDER PASS ED BY THE LD. FIRST APPELLATE AUTHORITY ON THE ISSUES IN DISPUTE ALONGW ITH DOCUMENTARY EVIDENCE FILED BY THE LD. COUNSEL FOR THE ASSESSEE AS WELL A S THE ORDER PASSED BY THE REVENUE AUTHORITY. WE ARE OF THE CONSIDERED VIEW T HAT THE ISSUE REGARDING WHETHER UNIVERSITY IS A STATE OR NOT. THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE LD. FIRST APPELLATE AUTHORIT Y BY RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN CWP NO.2462 OF 1994 DATED 23.05.1994 IN THE CASE OF SUK HWINDER SINGH VS PAU, LUDHIANA AND THE DECISION OF THE ITAT, CHANDIGARH BENCH IN THE CASE OF PROF. CUM HEAD OF DEPARTMENT OF MATH, STATS, PHYSIC S PAU, LUDHIANA VS. ITO VII(40 TDS, LUDHIANA IN ITA NO.1080 TO 1085/CH D/2005 DATED 23.5.2008, WHICH THE LD. CIT(A) HAS MENTIONED IN PA RA 6.2 OF THE IMPUGNED ORDER. 8.2. THE SECOND ISSUE WHETHER SECTIONS 194C AND 194 J OF THE ACT ARE APPLICABLE IN THE CASE OF THE ASSESSEE OR NOT. AF TER GOING THROUGH THE ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 13 IMPUGNED ORDER, WHICH HAS BEEN REPRODUCED ABOVE, WE ARE OF THE VIEW THAT THE LD. FIRST APPELLATE AUTHORITY HAS DISCUSSED IN DETAIL THE SAID PROVISIONS ON THE BASIS OF DOCUMENTARY EVIDENCE FILED BY THE ASSE SSEE AND HAS RIGHTLY HELD THAT THE PROVISIONS OF SECTION 194-C ARE CLEARLY CO NTRAVENED AND VIOLATED AND FOR SUCH INFRINGEMENT OF SPECIFIC PROVISIONS OF THE INCOME TAX LAW. HE HAS UPHELD THE ORDER OF THE A.O. HOLDING THAT DEAN OF G NDU (AUTHORITY ALLOTTING THE MESSES OF VARIOUS HOSTELS OF THE UNIV ERSITY TO THE MESS CONTRACTORS) BEING THE RESPONSIBLE PERSON DECLARED AS AN ASSESSEE IN DEFAULT FOR INFRINGEMENT OF THE ABOVE PROVISIONS AND THE DE MAND CREATED U/S 201(1) READ WITH SECTION 201(1A) OF THE ACT, HAS RIGHTLY B EEN CONFIRMED BY THE LD. FIRST APPELLATE AUTHORITY. 8.3. AS REGARDS THE APPLICABILITY OF PROVISIONS OF SECTION 194-J ON ACCOUNT OF DEMAND CREATED UNDER SECTION 201(1) R.W.S. 20 1(1A) FOR CONTRAVENTION OF THE PROVISIONS OF SEC. 194-J FOR EITHER NON-DEDU CTION OR SHORT DEDUCTION OF TDS ON PAYMENTS FOR LEGAL/PROFESSIONAL CHARGES. THE LD. FIRST APPELLATE AUTHORITY AFTER CONSIDERING THE DOCUMENTARY EVIDENC E FILED BY THE ASSESSEE HAS HELD THAT IGNORANCE OF LAW IS OF NO EXCUSE AND EVEN OTHERWISE THE ASSESSEE HAS NOT ESTABLISHED WITH DOCUMENTARY EVID ENCE THAT RESPECTIVE PAYEES HAVE FILED THEIR RESPECTIVE RETURNS FOR ALL THE ASSESSMENT YEARS IN DISPUTE AND ACCOUNTED FOR AND INCLUDED THE PROFESSI ONAL CHARGES RECEIVED BY ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 14 THEM IN THEIR INCOME COMPUTATION SHEETS AND AFTER D OING THE SAME HAVE DULY DISCHARGED THEIR RESPECTIVE TAX OBLIGATIONS CORRECT LY AND BONAFIDELY BY FURNISHING THEIR CONFIRMATIONS AND EVIDENCE IN SUPP ORT OF ITS CONTENTIONS. IN THE ABSENCE OF ANY POSITIVE EVIDENCE, THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY UPHELD THE FINDINGS OF THE A.O. WITH THE RI DER THAT IN CASE THE ASSESSEE IS ABLE TO JUSTIFY DISCHARGE OF TAX LIABILITY IN T HE HANDS OF THE EACH PAYEE BEFORE THE AO, HE IS AT LIBERTY TO RECTIFY HIS ORD ER BY RECOURSE TO THE PROVISIONS OF SECTION 154 OF THE ACT. IN OUR CONSI DERED VIEW, THE LD. FIRST APPELLATE AUTHORITY HAS PASSED A WELL REASONED ORDE R ON THE ISSUE INVOLVED IN THE CROSS OBJECTION OF THE ASSESSEE AND WE THINK IT PROPER NOT TO INTERFERE WITH THE WELL REASONED ORDER PASSED BY THE LD. FIRS T APPELLATE AUTHORITY AND WE ACCORDINGLY UPHOLD THE IMPUGNED ORDER BY DISMISS ING THE APPEAL FILED BY THE REVENUE AND C.O. OF THE ASSESSEE. 9. NOW, WE TAKE UP THE APPEAL OF THE REVENUE IN ITA NO.463(ASR)/2011 AND C.O. NO.23(ASR)/2011 OF THE ASSESSEE. SINCE TH E FACTS IN THE PRESENT APPEAL OF THE REVENUE AND C.O. OF THE ASSESSEES ARE IDENTICAL TO THE FACTS IN THE APPEAL OF THE REVENUE IN ITA NO. 462(ASR)/2011 AND C.O. NO.22(ASR)/2011 OF THE ASSESSEE, THEREFORE, OUR DEC ISION IN THE AFORESAID APPEAL OF THE REVENUE IN ITA NO.462(ASR)/2011 AND C .O. NO.22(ASR)/2011 ITA NOS. 462 & 463(ASS)/2011 C.O NOS. 22 & 23(ASR)/2011 15 IS IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESE NT APPEAL OF THE REVENUE I.E. IN ITA NO.463(ASR)/2011 AND C.O. NO.23(ASR)/2011 O F THE REVENUE. ACCORDINGLY, BOTH THE APPEAL OF THE REVENUE AND C.O . OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND COS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD MAY, 2014. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23RD MAY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE REGISTRAR, GURU NANAK DEV UNIVERSI TY, ASR. 2. THE ITO (TDS)-II ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR