The Income-tax Officer, Jammu V. The Executive Engineer, Dlistt. Rajouri

ITA 472/ASR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8905 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Section: 206AA; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.472(ASR)/2013 ASSESSMENT YEAR:2011-12 TAN:AMRE10281F INCOME TAX OFFICER, VS. THE EXECUTIVE ENGINEER, TDS CIRCLE, JAMMU. PWD (R&B), NOWSHERA, DISTT. RAJOURI. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.S.S. KANWAL, DR RESPONDENT BY:SH. SANJAY GUPTA, CA DATE OF HEARING: 30/12/2015 DATE OF PRONOUNCEMENT: 04/01/2016 ORDER PER A.D. JAIN, JM: THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2011-12, AGAINST THE ORDER DATED 29.04.2013, PASSED BY THE L D. CIT(A), JAMMU. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. WHETHER THE LD. CIT(A) WAS RIGHT IN FACTS AND C IRCUMSTANCES AND IN LAW IN PASSING THE IMPUGNED ORDER AS THE SAM E IS CONTRARY TO FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE IMPUGNED ORDER IS ERRONEOUS IN LAW AS W ELL AS ON MERITS. 3. WHETHER THE LD. CIT(A) WAS RIGHT IN FACTS AND CI RCUMSTANCES AND IN LAW IN HOLDING THAT IN THE CASES OF CONTRAC TORS WHO WERE HAVING PAN ALLOTTED BEFORE THE DATE OF INSPECT ION, THE PAYMENT SHOULD NOT BE BROUGHT INTO THE AMBIT OF DEF AULT OF LESSER DEDUCTION OF TDS INSPITE OF THE FACT THAT TH E AO HAD GIVEN OPPORTUNITIES TO THE PR TO FURNISH PROOF OF P AN CARDS WITH THE CONTRACTORS BEFORE DETEMINI9NG THE QUANTUM OF DEFAULT. 4. WHETHER THE LD. CIT(A) WAS RIGHT IN FACTS AND CI RCUMSTANCES AND IN LAW IN ACCEPTING THE PLEA OF THE PERSON RESP ONSIBLE ITA NO.472(ASR)/2013 ASSTT. YEAR: 2011-12 2 THAT DUE TO DOMESTIC PROBLEM OF THE CONCERNED CLER K THE PR COULD NOT PRODUCE THE PHOTOCOPY OF THE PAN AT THE T IME OF INSPECTION. AT THE TIME OF PROCEEDINGS BEFORE THE A O, IF THE PR COULD FURNISH PAN OF SOME OF THE CONTRACTORS, T HE PR COULD ALSO HAVE FURNISHED PAN OF BALANCE CONTRACTO RS HAD THE SAME BEEN AVAILABLE WITH HIM. 5. WHETHER THE LD. CIT(A) WAS RIGHT IN HOLDING THAT MERELY HAVING PAN WITHOUT FURNISHING THE SAME BEFORE THE A O IS SUFFICIENT GROUND FOR DELETING THE DEMAND CREATED B Y THE AO BY APPLYING HIGHER RATE OF TDS. 2. THE ASSESSEE IS A DRAWING AND DISBURSING OFFICER OF P.W.D. AND DURING THE YEAR UNDER CONSIDERATION, HE MADE PAYMEN TS TO VARIOUS CONTRACTORS AMOUNTING TO RS.2,18,46,321/- FOR EXECU TION OF VARIOUS CONTRACT JOB AND HAD MADE VARIOUS PURCHASES AMOUNTI NG TO RS.5,43,022/-. THE ASSESSEE HAD OBTAINED PAN OF ALL THE CONTRACTORS BEFORE MAKING THE PAYMENTS TO THESE CONTRACTORS. B UT DUE TO SOME DOMESTIC PROBLEMS OF THE CLERK CONCERNED, THE PERSO N RESPONSIBLE COULD NOT PROVIDE THE PHOTOCOPY OF CERTAIN PAN CARDS AT T HE TIME OF INSPECTION. AS A RESULT, THE ITO (TDS) HAD MADE ADDITION FOR S HORT DEDUCTION OF TAX. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION, SO MADE BY THE AO U/S 201(1) AND 201(1A) OF THE ACT. NOW, AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS BENCH. 3. THE LD. DR CONTENDED THAT THE LD. CIT(A) HAS ERR ED IN DELETING THE ADDITION, AS THE ASSESSEE WAS REQUIRED TO DEDUCT TH E TDS AT THE RATE OF 20% BECAUSE THE PAYEES TO WHOM PAYMENTS WERE MADE, WERE NOT HAVING PAN NOS. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). HE FURTHER CONTENDED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE RECENT DECIS ION OF THE ITAT, AMRITSAR BENCH, VIDE ORDER, DATED 04.12.2015, IN IT A NOS. 212, 268 & 269(ASR)/2015, FOR THE AYS 2011-12, 2012-13 & 2013- 14, IN THE CASE OF ITO (TDS CIRCLE, JAMMU VS. THE SECRETARY ARMY GODW ILL PUBLIC SCHOOL, ITA NO.472(ASR)/2013 ASSTT. YEAR: 2011-12 3 RAJOURI. HE ACCORDINGLY PRAYED THAT THE APPEAL O F THE REVENUE MAY BE DISMISSED, IN VIEW OF THE ABOVE DECISION OF ITAT, A MRITSAR BENCH. 5. HAVING HEARD BOTH THE PARTIES, WE ARE OF THE VIE W THAT THE ISSUE INVOLVED IN THE GROUNDS OF APPEAL OF THE REVENUE I S SQUARELY COVERED BY THE DECISION OF THE ITAT, AMRITSAR BENCH IN THE C ASE OF ITO (TDS CIRCLE, JAMMU VS. THE SECRETARY ARMY GODWILL PUBLIC SCHOOL, RAJOURI (SUPRA) IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND THE RELEVANT FINDINGS ARE AS FOLLOWS: 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GON E THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSI NG OFFICER, TDS CIRCLE, JAMMU CARRIED AN INSPECTION ON 21.1.2013 IN THE CASE OF THE ASSESSEE AND FOUND THAT IN VARIOUS YEARS THE ASSESS EE HAD PAID CERTAIN AMOUNTS FOR EXECUTION OF WORKS. THE ASSESSI NG OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE @ 1% WHEREAS THE ASSESSEE WAS REQUIRED TO DEDUCT THE TAX @ 20% IN VIEW OF THE FACT THAT AT THE TIME OF PAYMENT THE AS SESSEE HAD NOT OBTAINED PAN NO. OF PAYEES. THE LEARNED CIT(A) HAS RECORDED A FINDING OF FACT THAT PAN NOS. WERE AVAILABLE WITH T HE ASSESSEE AND THESE WERE OBTAINED BEFORE THE DATE OF INSPECTION, WHICH AT THE TIME OF INSPECTION DUE TO CERTAIN MISCOMMUNICATION BETWE EN MANAGEMENT AND PRINCIPAL COULD NOT BE PRODUCED. THE LEARNED C IT(A) HAS FURTHER MADE A FINDING OF FACT THAT THE EXISTENCE OF PAN NO . OF PAYEES WERE VERIFIED FROM THE SYSTEM OF ITO (TDS) AND WERE FOUN D TO BE CORRECT. THE PAN NO. AND THEIR DATE OF ISSUE AS RECORDED IN THE APPELLATE ORDER REVEALS THE FOLLOWING DETAILS AS RECORDED IN APPELLATE ORDER OF ASST. YEAR 2011-12. NAME PAN DATE OF ISSUE GUPTA TOUR & TRAVELS (PROP. RIPU DAMAN GUPTA) AMMPG62 20C 15/10/2007 AMARDEEP SINGH CSZPS0487E 18/05/2010 RAKESH WOOL CENTRE (PROP. RAKESH GUPTA) AAVPG9612K 30 /11/1998 MANOHAR SINGH CONTRACTOR (FIRM) AAHFM6720G 23/10/2002 S.V. TOUR & TRAVELS (PROP. SUKESH GUPTA) AJEPG9052H 21/11/2005 IN ALL THESE YEARS THE PAYEES REMAINED THE SAME. TH E FINDINGS OF LEARNED CIT(A) AS RECORDED IN ASST. YEAR 2011-12 VI DE PARA 4.3 ARE REPRODUCED BELOW. 4.3 THE APPELLANT FURTHER SUBMITTED THAT OUT OF TH E FIVE PERSONS; M/S MANOHAR SINGH CONTRACTOR WAS A PARTNER SHIP FIRM AND THE OTHER FOUR WERE INDIVIDUALS. THE APPEL LANT SUBMITTED THAT IN CASE OF INDIVIDUALS THE RATE OF T DS U/S 194C ITA NO.472(ASR)/2013 ASSTT. YEAR: 2011-12 4 WAS 1% AND IN CASE OF OTHERS IT WAS 2%; WHEREAS THE AO CHARGED TAX @ 20% ON PAYMENTS MADE TO ALL THE PERSO NS. THE AO HELD THAT APPELLANT DID NOT OBTAIN PANS OF PAYEE S AND THEREFORE APPLIED THE PROVISIONS OF SECTION 206AA A ND CHARGED TAX @ 20%. WHEREAS, THE APPELLANT ARGUED THAT PANS OF ALL THE PERSONS WERE AVAILABLE WITH THE APPELLANT AT THE TIME THE I NSPECTION CONDUCTED. THE APPELLANT PRODUCED A COPY OF STATEME NT OF SCHOOL PRINCIPAL RECORDED BY THE AO AT THE TIME OF INSPECTION IN WHICH THE PRINCIPAL ADMITTED THAT PANS OF M/S GUPTA TOUR & TRAVELS, M/S S.V. TOUR & TRAVELS, M/S S.V TOUR & TR AVELS AND SH. AMARDEEP SINGH WERE AVAILABLE WITH THEM. THE AP PELLANT FURTHER ARGUED THAT THE SCHOOL IS RUN BY ARMY AND A LL THE MAJOR DECISIONS ARE TAKEN BY THEM ONLY. THE PRINCIP AL WAS ONLY INVOLVED IN RUNNING OF SCHOOL; HE DID NOT HAVE ANY SAY IN FINANCIAL MATTERS. THE APPELLANT ALSO SUBMITTED THA T THE PANS OF OTHER PERSONS WERE ALSO AVAILABLE WITH THEM AND WERE LYING WITH ARMY PERSONS, BUT THEY WERE NOT AWARE OF THE I NSPECTION AND THEREFORE COULD NOT PRODUCE THE DETAILS BEFORE THE AO. THE APPELLANT ALSO SUBMITTED DATE OF PANS OF PAYEES SHO WING THEIR DATE OF ISSUE WHICH CLEARLY SHOW THAT ALL PAN S WERE ALLOTTED WELL BEFORE THE PERIOD UNDER CONSIDERATION EXCEPT THE PAN OF SH. AMARDEEP SINGH WHICH WAS ALLOTTED ON 18/05/2010. THIS WAS VERIFIED FROM THE SYSTEM OF IT O (TDS) AND FOUND CORRECT. THIS SHOWS THAT THE APPELLANT DI D NOT INSTIGATE THE PAYEES TO GET PANS SO AS TO AVOID HIG HER RATE OF TAX. IT APPEARS THAT THERE WAS SOME MISCOMMUNICATIO N BETWEEN THE SCHOOL PRINCIPAL AND THE ARMY AUTHORITI ES. THE APPELLANT ALSO ARGUED THAT SECTION 206AA MANDATES T HAT THE PAYEE SHALL FURNISH HIS PAN TO THE DEDUCTOR BUT THE AO OBSERVED THAT THE APPELLANT DID NOT OBTAIN THE PANS OF THE PAYEES. FROM THE ABOVE DISCUSSION IT APPEARS THAT THERE WAS NO MALAFIDE INTENTION ON PART OF THE APPELLANT. I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLANT AND COME T O A CONCLUSION THAT TAX SHOULD BE CHARGED @1% ON PAYMEN TS MADE TO INDIVIDUALS & @ 2% ON PAYMENTS MADE TO THE OTHER PERSONS EXCEPT ON ONE PAYMENT OF RS.1,97,475/- MADE TO SH. AMARDEEP SINGH BEFORE ISSUE OF HIS PAN; AND THE EXC ESS TAX AND INTEREST ALREADY CHARGED BE REVERSED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A), THERE FORE, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ITA NO.472(ASR)/2013 ASSTT. YEAR: 2011-12 5 7. IN THE RESULT, THE APPEALS FILED BY THE DEPARTME NT ARE DISMISSED. 6. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, DATED 04.12.2015, IN THE CASE OF ITO (TD S CIRCLE, JAMMU VS. THE SECRETARY ARMY GODWILL PUBLIC SCHOOL, RAJOURI (SUPRA), WE DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2016 SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 04/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:THE EXECUTIVE ENGINEER< PWD (R&B), NOWSHEHRA, RAJOURI. 2. THE ITO, TDS CIRCLE, JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.