Senior Post Master, Head Post Office, Mathura V. ITO, Mathura

ITA 466/AGR/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6923 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-04-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C SHARMA
• Keywords: TDS
• Section: 201(1); 191

Judgement Text

1 ITA 464(4)-08 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA. ( BEFORE SHRI R.K. GUPTA AND SHRI P.K. BANSAL ) ITA NOS. 464 TO 467/AG./2008 ASSTT. YEARS : 2004-05 TO 07-08. SR. POST MASTER, HEAD POST OFFICE, VS. THE INCOME -TAX OFFICER, MATHURA. TDS, MATHURA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI R.C. SHARMA, JR. D/R ORDER PER BENCH : THESE ARE FOUR APPEALS BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2004-05 TO 07-08. 2. THE ISSUE INVOLVED IN THESE APPEALS ARE IN RESPE CT TO PROVISIONS OF SECTION 201(1) AND 201(1A) OF THE ACT. SINCE COMMON ISSUE IS INVO LVED IN ALL THESE APPEALS, THEREFORE, THEY ARE DISPOSED OFF BY THIS SINGLE ORDER. 3. THE ASSESSING OFFICER PASSED ORDER UNDER SECTION 201(1) AND SECTION 201(1A) OF THE ACT FOR ASSESSMENT YEARS 2004-05 TO 2007-08. T HE ASSESSING OFFICER NOTICED THAT FOLLOWING AMOUNTS WERE PAID BY THE ASSESSEE DURING THE RESPECTIVE ASSESSMENT YEAR WITHOUT DEDUCTING TAX AT SOURCE :- A.Y. 2004-05 26,75,633/- A.Y. 2005-06 1,31,514/- 2 A.Y. 2006-07 21,27,395/- A.Y. 2007-08 19,48,381/- THE ASSESSEE WAS REQUIRED TO EXPLAIN WHY THE TDS WA S NOT DEDUCTED BY HIM AND WHY INTEREST UNDER SECTION 201(1A) SHOULD NOT BE CHARGE D. A REPLY WAS FILED THAT ASSESSEE HAS NOT DEDUCTED THE TDS BONAFIDE FOR THE REASON THAT T HE RESPECTIVE PAYMENTS WERE ABOUT RS. 1 LAC OR SO AND EACH PARTY HAS FILED FORM 15H/1 5-I. THEREFORE, DUE TO BONAFIDE REASON TDS WAS NOT DEDUCTED ON ACCOUNT OF WITHDRAWAL FROM NSS ACCOUNT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED. IN HIS VIEW, AS PER PROVISIONS OF SECTION 197(1B) THE ASSESSEE WAS LIAB LE TO DEDUCT THE TAX ON ACCOUNT OF WITHDRAWAL FROM NSS ACCOUNT. ACCORDINGLY, THE ORDER UNDER SECTION 201(1) AND 201(1B) WAS PASSED AND THE ASSESSEE WAS DIRECTED TO PAY THE TDS AMOUNT ALONG WITH INTEREST FOR THE RESPECTIVE YEARS. THE LD. CIT (A) ALSO CONFIRM ED THE ACTION OF THE ASSESSING OFFICER. 4. THE LD. COUNSEL OF THE ASSESSEE INVITED THE ATTE NTION OF THE BENCH ON THE PROVISION OF SECTION 197(1A) AND (1B) AND ALSO ON THE EXPLANA TION TO SECTION 191. ACCORDINGLY IT WAS SUBMITTED THAT DUE TO BONAFIDE REASON THE TDS O N THE AMOUNT PAID ON ACCOUNT OF WITHDRAWAL FROM NSS ACCOUNT WAS NOT DEDUCTED. THERE FORE, ASSESSEE SHOULD NOT BE TREATED IN DEFAULT IN VIEW OF PROVISIONS OF SECTION 201(1) AND 201(1A) OF THE ACT. IT WAS FURTHER SUBMITTED THAT EACH AND EVERY PAYMENT WAS A BOUT RS. 1 LAC OR SO AND EACH AND EVERY PERSON HAS FILED FORM 15-H/15-I. ALL THE PERS ONS WERE NOT ASSESSED TO TAX AS THEIR INCOME WAS BELOW TAXABLE. THIS INFORMATION WAS GIV EN TO THE ASSESSING OFFICER AS WELL AS TO THE LD. CIT (A). THIS FACT HAS BEEN NOTED ALS O BY BOTH THE LOWER AUTHORITIES. IN SUPPORT OF THE CONTENTION THAT EACH AND EVERY PAYME NT WAS ABOUT RS. 1 LAC OR SO, THE ATTENTION OF THE BENCH WAS DRAWN ON CHART TABULATED AT PAGE 3 OF THE ORDER OF LD. CIT (A). 3 IT WAS FURTHER SUBMITTED THAT THESE PAYMENTS WERE M ADE TO DIFFERENT PERSONS AND NOT TO ONE PERSON. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDERS OF THE ASSESSING OFFICER AND LD. CIT (A). IT WAS FURTHER SUBMITTED THAT PROVISIONS OF LAW ARE VERY CLEAR AND THE ASSESSEE WAS LIABLE TO DEDUCT TDS. IT WAS FURT HER SUBMITTED THAT DECLARATION FILED OF FORM 15-H AND 15-I WAS ALSO NOT PROPER. THEREFORE, THE ASSESSING OFFICER AS WELL AS LD. CIT (A) WERE RIGHT IN REJECTING THE EXPLANATION FIL ED ON BEHALF OF THE ASSESSEE. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HEM CAREFULLY. AFTER TAKING INTO CONSIDERATION SUBMISSIONS AND PROVISIONS OF LAW, WE FOUND THAT THERE WAS BONAFIDE CONTENTION OF THE ASSESSEE IN NOT DEDUCTING TAX ON ACCOUNT OF WITHDRAWAL FROM NSS ACCOUNT BY RESPECTIVE PERSONS. IT IS SEEN THAT THE AMOUNT OF WITHDRAWAL RANGES RS.1 LAC OR ODD. THE AMOUNT IS PAID TO DIFFERENT PERSONS. EACH PERSON HAS FILED FORM 15-H/15-I WHERE THEY HAVE DECLARED THAT THEIR INCOME IS NOT T AXABLE. DUE TO THIS REASON THE ASSESSEE DID NOT DEDUCT THE TAX AT SOURCE ON THE AMOUNT OF W ITHDRAWAL. WE FURTHER NOTED THAT EXPLANATION TO SECTION 191 ALSO HELPS THE CASE OF T HE ASSESSEE WHERE IT IS PROVIDED THAT WHERE THE ASSESSEE HAS ALSO FAILED TO PAY THE TAX D IRECTLY, THEN SUCH PERSON SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY IN CUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SUB-SECTION (1) OF SE CTION 201, IN RESPECT OF SUCH TAX. IN THIS CASE THE ASSESSEES ARE THOSE PERSONS WHO HAD W ITHDRAWN THE AMOUNT FROM NSS ACCOUNT AND THEIR INCOME IS BELOW TAXABLE LIMIT. TH EREFORE, IN VIEW OF EXPLANATION TO SECTION 191 ALSO THE BONAFIDE OF THE ASSESSEE PROVE D. THOUGH THE PROVISIONS OF SECTION 197(1B) ARE VERY CLEAR BY WHICH IT IS PROVIDED THAT ANY PERSON FAILED TO DEDUCT TAX WILL BE TREATED THE PERSON IN DEFAULT IN VIEW OF SECTION 20 1(1) AND 201(1B) OF THE ACT. HOWEVER, 4 FROM THE FACTS OF THE PRESENT CASE IT IS AMPLY PROV ED THAT DUE TO BONAFIDE INTENTION THE ASSESSEE COULD NOT DEDUCT THE TAX FOR THE REASON TH AT FORM 15-H AND 15-I WERE FILED BY WHICH IT WAS CONFIRMED THAT THEIR INCOME IS BELOW T AXABLE. THEREFORE, WE HOLD THAT THE ASSESSING OFFICER AND LD. CIT (A) WERE NOT JUSTIFIE D IN TREATING THE ASSESSEE A PERSON IN DEFAULT IN VIEW OF PROVISIONS OF SECTION 201(1) AND 201(1A). ACCORDINGLY, WE HOLD THAT DUE TO BONAFIDE REASON THE ASSESSEE CANNOT BE TREAT ED AS PERSON IN DEFAULT IN VIEW OF THE ABOVE STATED SECTIONS. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR ALL THE YEARS 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22. 04.2010 SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA, DATED : 26/04/2010. D/- COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A) CONCERNED. THE D/R, ITAT AGRA. GUARD FILE (ITA 464(4) /AG/2008) BY ORDER, AR ITAT AGRA.