David Hill, V. JCIT Spl Range-30,

ITA 4775/DEL/2003

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74425 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-02-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 23-10-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS NIDHI SRIVASTAVA
• Keywords: Opportunity of being heard; Advance ruling; Corroborative evidences
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI) BEFORE SHRI U. B. S. BEDI, JUDICIAL MEMBER AND SHRI B. C. MEENA , ACCOUNTANT MEMBER I.T.A. NO. 4775 /DEL/2003 (ASSESSMENT YEAR 1998-99) MR. DAVID HILL, VS. JCIT, SPL.RANGE-30, C/O COCA COLA INDIA INC. NEW DELHI ENKAY TOWERS, UDYOG VIHAR PHASE-V, GURGAON. PAN/GIR NO.: H-119 (APPELLANTS) (RESPONDENTS) ASSESSEE BY : MR. K M GUPTA, ADV. DEPARTMENT BY: MRS. NIDHI SRIVASTAVA, SR. DR ORDER PER U B S BEDI, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE EMANATES FROM THE ORDE R PASSED BY LD. CIT(A)-XXX, NEW DELHI DATED 19.08.2003, WHICH WAS E ARLIER HEARD AND DISMISSED BY ITAT DELHI BENCH C VIDE ORDER DATED 17.07.2009 AGAINST WHICH THE DEPARTMENT FILED FURTHER APPEAL BEFORE HO N'BLE DELHI HIGH COURT AND THE SAID APPEAL WAS DISPOSED OFF BY HON'BLE DEL HI HIGH COURT IN I.T.A. NO. 1050/2009 DATED 16.02.2012 BY HOLDING AS UNDER: LD. COUNSEL FOR THE RESPONDENT-ASSESSEE STATES THA T HE MATTER MAY BE REMITTED TO THE INCOME TAX APPELLATE TRIBUNAL (TRIB UNAL, FOR SHORT) FOR FRESH CONSIDERATION. THE STATEMENT MADE BY THE COUNSEL FOR THE RESPONDENT-ASSESSEE IS TAKEN ON RECORD. ACCORDINGL Y, THE IMPUGNED ORDER PASSED BY THE TRIBUNAL DATED 14.11.2008 IS SE T ASIDE AND QUASHED. THE TRIBUNAL WILL DECIDE THE QUESTION/APP EAL AFRESH WITHOUT I.T.A. NO.4775/DEL/2003 2 BEING INFLUENCED BY THE EARLIER ORDER. WE CLARIFY THAT WE HAVE NOT EXPRESSED ANY OPINION ON THE MERITS OF THE CASE. T HE STATEMENT MADE BY THE COUNSEL FOR THE RESPONDENT-ASSESSEE WILL NOT BE CONSTRUED AS AN ADMISSION MADE BY THEM THAT THEY DO NOT HAVE A CASE ON MERITS. THE APPEAL IS DISPOSED OF. NO COSTS. SD./- SANJIV KHANNA, J SD./- R.V.EASWAR, J FEBRUARY 16, 2012 2. CONSEQUENT UPON THE DIRECTION OF HON'BLE DELHI H IGH COURT, THE APPEAL WAS FIXED FOR HEARING AND SHRI K N GUPTA, AD VOCATE ATTENDED ON BEHALF OF THE ASSESSEE WHEREAS DEPARTMENT WAS REPRE SENTED BY MRS. NIDHI SRIVASTAVA, SR. D.R. 3. IT IS THE MAIN CONTENTION OF THE ASSESSEE THAT T HE ORDERS OF AUTHORITIES BELOW ARE ARBITRARY, MISCONCEIVED AND ILLEGAL SO TH ESE MAY BE QUASHED. WITHOUT PREJUDICE TO THE FOREGOING OF THE REFUSAL T O GRANT OF TECHNICIAN NOTE U/S 10(5B) OF THE I. T. ACT, 1961 TO THE ASSESSEE I S ERRONEOUS AND UNJUST, THE SAME MAY BE QUASHED. 4. THE ORDER FOR GROSSING UP TAX ON THE DECLARED IN COME IN A SUM OF RS.42,71,428/- IS INCORRECT AND UNTENABLE AND MUST BE VACATED; THE ORDER, FOR CHARGING INTEREST U/S 234B OF THE I. T. ACT, 1961, IN A TAX FREE TDS CASE IS ERRONEOUS AND INCOMPATIBLE WITH THE PROVISIONS OF T HE ACT AND SO MUST BE QUASHED. 5. THE FACTS INDICATE THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE A.O. NOTED THAT THE ASSESSEE HAD CLAIMED EXEMPT ION U/S 10(5B) AND ALTHOUGH HE HAD CLAIMED TO HAVE MASTERS DEGREE IN E NGINEERING BUT NO SUPPORTING EVIDENCE HAD BEEN GIVEN FOR THE SAME TO THE A.O. THE A.O. FURTHER MENTIONED THAT EVEN THE WORK EXPERIENCE AND THE EMPLOYMENT I.T.A. NO.4775/DEL/2003 3 CONTRACT WITH THE INDIAN COMPANY WAS NOT FURNISHED BY THE ASSESSEE TO SUPPORT THE CLAIM U/S 10(5B). IN THE ABSENCE OF SU CH EVIDENCES THE CLAIM WAS REJECTED BY THE A.O. 6. THE ASSESSEE CHALLENGED SUCH ACTION OF THE A.O. BEFORE THE FIT APPELLATE AUTHORITY AND FILED WRITTEN SUBMISSIONS I N WHICH, IT WAS CLAIMED THAT ON 28.08.2000, A LETTER WAS FILED BEFORE THE A .O. GIVING CERTAIN INFORMATION AND FOR FILING INFORMATION RELATING TO THE QUERIES RAISED BY THE A.O., FURTHER WAS REQUESTED TO GIVE TIME. IT WAS A LSO MENTIONED THAT ON 01.09.2000, COPY OF THE EMPLOYMENT CONTRACT AND CER TAIN OTHER INFORMATION RELATING TO JOB RESPONSIBILITIES WERE ALSO FURNISHE D BUT THE A.O. REFUSED TO HEAR THE MATER SAYING THAT THE ORDER HAD ALREADY BE EN PASSED. 7. AS REGARDS THE CLAIM U/S 10(5B), THE ASSESSEE ME NTIONED THAT HE WAS WORKING WITH COCA COLA, INDIA, HAVING ARRIVED IN TH IS COUNTRY ON 11.01.1996, WAS A NON-RESIDENT IN INDIA DURING ALL THE FOUR YEARS IMMEDIATELY PRECEDING THE YEAR OF ARRIVAL, WAS WORK ING AS MANAGER- TECHNICAL OPERATION SUPPORT AND ON THE BASIS OF QUA LIFICATIONS AND WORK EXPERIENCE, HE WAS ENTITLED TO QUALIFY AS A TECHNIC IAN. THE REPRESENTATIVE OF THE ASSESSEE ALSO CITED VARIOUS CASE LAW, INCLUDING AUTHORITY FOR ADVANCE RULING IN P.NO.25 OF 1996 IN RE. 237 ITR 827 (AAR) TO SHOW THAT EVEN THOUGH FORMAL DOCUMENTARY EVIDENCE WAS NOT PROVIDED AS REQUESTED BY THE A.O. IN THIS CASE, THE STATUS OF THE ASSESSEE BEING TECHNICIAN CANNOT BE REJECTED. IT WAS STATED IN THE APPEAL THAT THE ASS ESSEE WAS DENIED THE OPPORTUNITY TO ESTABLISH HIS ELIGIBILITY TO CLAIM T HE EXEMPTION. IT WAS ALSO ADDED THAT THE OPPORTUNITY OF BEING HEARD SHOULD BE AFFORDED IN LETTER AND SPIRIT AND NOT AS A MERE FORMALITY. 8. LD. CIT(A) ON THE WRITTEN SUBMISSIONS OF THE ASS ESSEES REPRESENTATIVE SOUGHT COMMENTS OF THE A.O. AS REGARDS PROVIDING R EASONABLE OPPORTUNITY, I.T.A. NO.4775/DEL/2003 4 THE A.O. MENTIONED THAT THE CASE WAS FIXED FOR HEAR ING ON 02.07.1999, 16.06.1999, 12.07.2000, 14.08.2000. HE POINTED OUT THAT SUBMISSIONS OF THE ASSESSEE HAD BEEN DULY CONSIDERED BEFORE PASSING TH E ASSESSMENT ORDER. HOWEVER, IN THE REJOINDER, THE ASSESSEES REPRESENT ATIVE REITERATED THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN. 9. BEFORE GOING FURTHER TO DISCUSS THE MERITS OF TH E CLAIM U/S 10(5B) LD. CIT(A) THOUGHT IT PROPER TO SEE THE ASSESSMENT RECO RDS SO THAT THE FACT OF REASONABLE OPPORTUNITY BEING GRANTED TO THE ASSESSE E COULD BE EXAMINED. LD. CIT(A) NOTED ON PERUSAL OF THE ASSESSMENT ORDER THAT THE CONTENTION OF THE A.O. IS CORRECT BECAUSE SEVERAL OPPORTUNITIES W ERE GIVEN AND EVEN THEN, THE ASSESSEE COULD NOT FURNISH THE EVIDENCE TO SUPP ORT HIS CLAIM U/S 10(5B). IN VIEW OF THIS FACTUAL POSITION, THE GROUNDS RELAT ING TO THIS ASPECT WAS REJECTED. 10. LD. CIT(A) FURTHER EXAMINED THE CLAIM OF THE AS SESSEE IN RESPECT OF CLAIM U/S 10(5B) AS MADE IN WRITTEN SUBMISSIONS FIL ED BEFORE LD. CIT(A) AND AFTER SUMMARIZING THE SAME IN PARA 8A, 8B AND 9 OF THE ORDER, LD. CIT(A) DISMISSED THE CLAIM OF THE ASSESSEE AS PER PARA 10 & 11 OF THE SAID ORDER, WHICH IS REPRODUCED BELOW: 10. AFTER GOING THROUGH THE FACTS AND ARGUMENTS ON BOTH SIDES I AM OF THE OPINION THAT THE CLAIM U/S 10(5B) CAN BE GRA NTED IF A PERSON HAS REQUISITE QUALIFICATION AND WORK EXPERIENCE OF HAVI NG WORKED AS TECHNICIAN IN HIS PAST JOBS AND, BESIDES THIS, HE M UST BE ENGAGED AS A TECHNICIAN IN HIS PRESENT EMPLOYMENT WITH THE INDIA N COMPANY. AGAINST HIS BACKGROUND THIS CASE HAS TO BE EXAMINED WHETHER THE APPELLANT FULFILLS ALL THREE CONDITIONS. AS REGARD S THE FIRST, THE TECHNICIAN HAS BEEN DEFINED TO MEAN A PERSON HAVING SPECIALIZED KNOWLEDGE IN VARIOUS FIELDS. IN THIS CASE, THE OBJ ECTION OF THE A.O. IS THAT THE EVIDENCE RELATING TO QUALIFICATIONS OF THE APPELLANT HAS NOT BEEN FURNISHED. EVEN IF THE ARGUMENT OF THE APPELL ANT, THAT DOCUMENTARY EVIDENCE FOR ESTABLISHING EDUCATIONAL Q UALIFICATION IS NOT NECESSARY AS PER SEVERAL DECISIONS, IS ACCEPTED, TH E SECOND CONDITION I.T.A. NO.4775/DEL/2003 5 OF HAVING ACQUIRED EXPERIENCE OF BEING A TECHNICIAN CANNOT BE WAIVED. THE RESUME OF THE APPELLANTS SHOWS THAT IN THE IMMEDIATE PAST HIS MAIN DUTIES RELATED TO TECHNICAL STAFF REC RUITMENT AND TRAINING. COMING TO THE THIRD CONDITION, I FIND TH AT EVEN WHILE WORKING WITH COCA COLA, INDIA, NEW DELHI THE APPELL ANT WAS MAINLY RESPONSIBLE FOR RECRUITMENT AND TRAINING OF LOCAL S TAFF. I HAVE ALSO PERUSED THE EMPLOYMENT CONTRACT GIVEN BY THE APPELL ANT AND FROM THAT IT CANNOT BE INFERRED THAT HE WAS EMPLOYED AS A TEC HNICIAN. IN FACT, I AM IN AGREEMENT WITH THE A.O.S COMMENTS THAT WHILE WORKING IN INDIA, THE MAIN JOB OF THE APPELLANT WAS OF RECRUIT MENT AND TRAINING OF LOCAL STAFF. IN VIEW OF THIS FACTUAL POSITION, THE CLAIM OF EXEMPTION U/S 10(5B) CANNOT BE ENTERTAINED BECAUSE THE APPELLANT HAS TO FULFILL ALL THE CONDITIONS REQUIRED BY SECTION 10(5B) TO QUALIF Y AS A TECHNICIAN AND HE HAS SURELY FAILED TO QUALIFY FOR THE SAME ON TWO IMPORTANT CONDITIONS- HAVING WORKED AS A TECHNICIAN IN THE PA ST AND HAVING BEEN IN EMPLOYMENT AS A TECHNICIAN WITH THE INDIAN COMPA NY. 11. IN VIEW OF THE ABOVE MENTIONED FACTS, THE GROUN D RELATING TO CLAIM U/S 10(5B) OF THE I. T. ACT, 1961 IS REJECTED . 11. SIMILARLY, THE CHALLENGE WITH REGARD TO CHARGIN G OF INTEREST U/S 234B OF THE I. T. ACT, 1961 WAS ALSO REJECTED AS PER PAR A 12 OF HIS ORDER, WHICH READS AS UNDER: THE LAST GROUND IS IN RESPECT OF CHARGE OF INTERES T U/S 234BN OF THE I. T. ACT, 1961. IT HAS BEEN ARGUED THAT IF NO ADVANC E-TAX IS PAYABLE THERE CAN BE NO DEFAULT IN PAYMENT OF THE SAME AND CONSEQUENTLY THE CHARGING PROVISIONS RELATING TO INTEREST ARE NOT AT TRACTED. THE APPELLANTS REPRESENTATIVE HAS MENTIONED THAT THE O NLY INCOME OF THE APPELLANT IN THIS CASE WAS FROM SALARY AND HE WAS N OT LIABLE FOR PAYMENT OF ADVANCE-TAX. IN VIEW OF THIS, IT HAS BE EN STATED THAT LEVY OF INTEREST U/S 234B IS NOT JUSTIFIED, I FIND THAT THI S GROUND IS CONSEQUENTIAL TO THE GROUNDS DISPOSED OFF EARLIER. SECTIONS 234A, 234B AND 234C IMPOSE A MANDATE TO COLLECT INTEREST. THEREFORE, LEVY OF INTEREST BY THE A.O. IS JUSTIFIED. 12. STILL AGGRIEVED, THE ASSESSEE HAS COME UP IN FU RTHER APPEAL AND CONTENDED TO REVERSE THE ORDER OF AUTHORITIES BELOW BY ALLOWING THE CLAIM OF I.T.A. NO.4775/DEL/2003 6 EXEMPTION OF THE ASSESSEE U/S 10(5B) AND TO DELETE THE INTEREST CHARGED U/S 234B. IT WAS S STRONGLY CONTENDED BY THE LD. A.R. THAT THE ASSESSEE IS A TECHNICIAN AND ENTITLED TO EXEMPTION U/S 10(5B). M OREOVER, ASSESSEE IS NON RESIDENT INDIAN. WHILE SUBMITTING AND RELYING UPON THE DECISIONS MADE BEFORE LOWER AUTHORITIES AND ON VANCE ROBERT HAFFER N VS CIT 241 ITR 299 (AAR) AND OTHER DECISIONS AS MENTIONED IN WRITTEN S UBMISSIONS, IT WAS STRONGLY PLEADED FOR ALLOWING THE CLAIM. 13. LD. D.R., WHILE RELYING UPON THE ORDERS OF AUT HORITIES BELOW, HAS STRONGLY PLEADED FOR ITS CONFIRMATION. IT WAS SUBM ITTED THAT JOB CONTRACT WAS NOT PRODUCED, NO TECHNICAL SERVICES HAVING BEEN GIV EN TO THE PERSON WITH WHOM JOB CONTRACT WAS THERE, HAS BEEN ESTABLISHED. HE WAS JUST HAVING H.R. WORK AND WHEN SPECIFICALLY ASKED BY THE A.O. TO GIV E DETAILS ABOUT THE JOB RESPONSIBILITY, HE WAS UNABLE TO DO SO. SINCE, NO TECHNICAL SERVICES HAVE BEEN RENDERED, SO ASSESSEE WAS NOT ENTITLED TO CLAI M EXEMPTION U/S 10(5B) OF THE ACT. THEREFORE, THE ACTION OF THE AUTHORITIES BELOW IS FULLY JUSTIFIED WHICH NEEDS TO BE CONFIRMED. IT WAS URGED FOR CONF IRMATION OF THE IMPUGNED ORDER OF LD. CIT(A). 14. LD. A.R. IN ORDER TO COUNTER THE SUBMISSIONS OF THE LD. D.R., HAS RELIED UPON THE CASE OF ACIT VS SHRI ANDREAS BEISIN G (I.T.A. NO. 3496/DEL/01) IN WHICH AUTHORITIES BELOW TREATED THE ASSESSEE AS TECHNICIAN AND ALLOWED THE CLAIM U/S 10(5B). SO, RELYING UPON THIS DECISION, IT WAS PLEADED FOR ALLOWING THE CLAIM OF THE ASSESSEE IN R ESPECT OF EXEMPTION AS WELL AS DELETION OF INTEREST CHARGEABLE U/S 234B. 15. LD. D.R. SUBMITTED THAT THE CASE RELIED UPON BY THE LD. A.R. IS NOT PROPER AND JUSTIFIED AS THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, THEREFORE, THE ORDER OF LD. CIT(A) NEEDS TO B E CONFIRMED, WHICH MAY BE CONFIRMED. I.T.A. NO.4775/DEL/2003 7 16. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON AND DOCUMENTARY EVID ENCE FILED BEFORE AUTHORITIES BELOW AND COPIES PLACED IN THE PAPER BO OK, WE FIND THAT LD. CIT(A) HAS PASSED A VERY ELABORATE AND DETAILED ORD ER BY DISCUSSING EACH AND EVERY ASPECT OF THE MATTER WHICH HAS BEEN REPRO DUCED IN PARA 10 OF THIS ORDER. SINCE, NEITHER ANY FRESH EVIDENCE OR MATERI AL ON RECORD HAS BEEN FURNISHED AND OTHERWISE, ORDER OF LD. CIT(A) IS WEL L REASONED AND SPEAKING ONE WHICH COVERS ALL THE ISSUES RAISED, THEREFORE, IN OUR CONSIDERED VIEW, ORDER OF LD. CIT(A) CALLS FOR NO INTERFERENCE WHICH IS UPHELD AND THIS GROUND OF THE APPEAL OF THE ASSESSEE IS DISMISSED. 17. AS WE HAVE UPHELD THE ORDER OF LD. CIT(A), THER EFORE, THE ISSUE IN RELATION TO CHARGING OF INTEREST UNDER SECTION 234B ON WHICH NO ARGUMENT HAS BEEN ADVANCED, IS ALSO UPHELD AND GROUND OF THE ASSESSEE IN THIS REGARD IS DISMISSED. 18. AS A RESULT, APPEAL OF THE ASSESSEE GETS DISMIS SED. 19. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2014. SD./- SD./- (B. C. MEENA) (U.B.S.BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 31 ST MARCH, 2014. SP. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI AR, ITAT, 5. CIT(ITAT), NEW DELHI NEW DELHI