Ing Vysya Bank Limited, Bangalore V. ACIT, Bangalore

ITA 488/BANG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80781 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT HUSSAI N QURESHICIT
• Assessee Lawyers: J ANANTHAN
• Keywords: Right to appeal
• Section: 133A; 194C; 201(1)

Judgement Text

ITA NOS.488 AND 1610 OF 2012 ING VYSYA BANK LTD BAN GALORE PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.488 & 1610/BANG/2012 (ASSESSMENT YEAR: 2007-08) M/S. ING VYSYA BANK LTD ING VYSYA HOUSE, NO.22, MG ROAD, BANGALORE 560001 PAN: AABCT 0529 M BLRI 01836 C VS. ASSTT. COMMISSIONER OF INCOME TAX ( TDS ) CIRCLE 16(2) BANGALORE (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI J. ANANTHAN, CA DEPARTMENT BY: SHRI FARHAT HUSSAI N QURESHI,CIT (DR) DATE OF HEARING: 25/11/2014 DATE OF PRONOUNCEMENT: 01/12/2014 O R D E R PER RAJPAL YADAV, J.M. THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE COMMON ORDER OF THE LEARNED CI T (A) DATED 10.02.2012 PASSED FOR ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS TAKEN FIVE GROUNDS OF APPEAL, WHICH ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT RULES, THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCE OF THE ASSESSEE IN BOTH THE APPEALS IS THAT THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER FOR T REATING THE ASSESSEE IN DEFAULT U/S 201(1) ON ACCOUNT OF NON DE DUCTION OF TAXES U/S 194C AND 194J WHILE MAKING PAYMENTS. CONS EQUENTLY INTEREST U/S 201(1A) IS NOT CHARGEABLE UPON THE ASS ESSEE. ITA NOS.488 AND 1610 OF 2012 ING VYSYA BANK LTD BAN GALORE PAGE 2 OF 5 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/ S 133A OF THE INCOME TAX ACT WAS CARRIED OUT AT THE PREMISES OF T HE ASSESSEE WHEREIN INSTANCES OF NON DEDUCTION OF TAXES AT SOUR CE U/S 194C AND 195J OF THE I.T. ACT FROM PAYMENT TO SEVERAL PA RTIES, NAMELY MISCELLANEOUS SHIFTING OF CARTON FROM ITPL, COMPAC PACKERS, DEI PVT LTD, THIRD PARTY OUTSOURCING, TPV CHARGES, ADVE NT EVENT MANAGEMENT, ETC., WERE NOTICED. THE ASSESSING OFFIC ER HAS CONFRONTED THE ASSESSEE AS TO HOW IT FAILED TO DEDU CT THE TDS. IT EMERGES OUT FROM THE ORDER PASSED U/S 201(1) AND 20 1(1A) THAT THE ASSESSEE DID NOT DISPUTED THE SHOW CAUSE NOTICE OF THE ASSESSING OFFICER AND EXPRESSED NO OBJECTION FOR PA SSING THE ORDER U/S 201 AND 201(1A). ACCORDINGLY, THE ASSESSI NG OFFICER PASSED AN ORDER ON 30.04.2009, WHEREBY HE DETERMINE D THE TDS LIABILITY AT RS.21,73,259/- AND INTEREST OF RS.9,12 ,718/-. IN THIS WAY THE ASSESSING OFFICER HAS DETERMINED THE TOTAL LIABILITY OF THE ASSESSEE AT RS.30,85,977/-. THE ASSESSEE WAS NOT SA TISFIED WITH THE ORDER OF THE ASSESSING OFFICER, IT FILED AN APP EAL BEFORE THE CIT (A). IT CONTENDED THAT THE BANK HAD MADE VARIOU S PROVISIONS DURING ITS BANKING BUSINESS. IT HAS NEITHER CREDITE D THE ACCOUNT OF THESE PARTIES, NOR MADE THE PAYMENTS. IT WAS MER ELY A PROVISION AND FOR CREATING A PROVISION, THE ASSESSE E WAS NOT SUPPOSED TO DEDUCT THE TDS. ONE OF THE INSTANCES RE GARDING THE TPV CHARGES OF RS.2,40,00,000/- PAID TO THE SISTER CONCERN NAMELY M/S ING VYSYA FINANCIAL SERVICES LTD, WAS BR OUGHT TO THE NOTICE OF THE CIT (A). THE CIT (A) HAS REMITED THE DISPUTE WITH REGARD TO NON DEDUCTION OF TAX ON THIS ALLEGED PAYM ENT. ACCORDING TO THE LEARNED CIT (A), M/S ING VYSYA FIN ANCIAL SERVICES LTD HAD FILED ITS RETURN OF INCOME ON 7.11 .2007 FOR ASSESSMENT YEAR 2007-08. HE DIRECTED THE ASSESSING OFFICER TO ITA NOS.488 AND 1610 OF 2012 ING VYSYA BANK LTD BAN GALORE PAGE 3 OF 5 VERIFY WHETHER THE SAID PAYMENT HAS BEEN INCLUDED I N THE RETURN OF INCOME SO FILED AND TAXES PAID THEREON AND NO TD S CERTIFICATE IN RESPECT OF THE CORRESPONDING AMOUNT HAS BEEN ISS UED TO THE PAYEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED T HAT THIS ISSUE IS PENDING BEFORE THE LEARNED ASSESSING OFFIC ER. HE SUBMITTED THAT WHENEVER PAYMENT WAS MADE, THE ASSES SEE HAVE DEDUCTED THE TDS. FOR EXAMPLE, ON 31.03.2007, A SUM OF RS.22,11,904/- WAS MADE AN ADHOC PROVISION FOR AUDI T FEES. THIS PROVISION WAS RVERSED ON 31.03.2008. HE TOOK US THR OUGH THE ANNEXURE APPENDED WITH THE ORDER OF THE ASSESSING O FFICER WHEREIN INSTANCES OF THE ALLEGED PAYMENT ON WHCH TD S WAS NOT DEDUCTED, THE LEARNED COUNSEL POINTED OUT THAT THER E ARE 36 PAYMENTS NOTICED BY THE ASSESSING OFFICER. ONE OF T HE PAYMENT IS DATED 31.01.2007 UNDER THE HEAD BRAIN LARA EVENT. T HE AMOUNT OF EXPENDITURE SHOWN IS RS.31,71,405/-. HE TOOK US THROUGH THE DETAILS OF THIS PAYMENT IN THE PAPER BOOK AND SUBMI TTED THAT LARA EVENT WAS HELD IN DIFFERENT CITIES. AS PER THE ORDER OF THE INCOME TAX OFFICER, THE PAYMENT OF RS.31,71,403.47 WAS PAID, IN FACT ASSESSEE HAS MADE PAYMENT OF RS.20,32,500/- AN D A TDS OF RS.2,30,280/- WAS DEDUCTED. THIS AMOUNT HAS BEEN DE POSITED ON 7.8.2007. THE PAYMENT WAS MADE ON 3.7.2007 VIDE CHA LLAN/ TRANSFER VOUCHER NO.632. ON THE OTHER HAND THE LEAR NED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES B ELOW. HE CONTENDED THAT THE ASSESSEE FAILED TO BRING SPECIFI C DETAILS BEFORE THE LEARNED REVENUE AUTHORITEIS BELOW, THEREFORE, I T SHOULD NOT BE PERMITTED TO RAISE SUCH TYPE OF PLEA BEFORE THE TRI BUNAL. ITA NOS.488 AND 1610 OF 2012 ING VYSYA BANK LTD BAN GALORE PAGE 4 OF 5 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. AS FAR AS THE DETAILS ARE CONCERNED, THOSE MUST HAVE EMERGED DURING THE COURSE OF SURVEY . THE QUESTION IS WHETHER THE DETAILS HAVE APPRECIATED IN RIGHT PERSPECTIVE OR MERELY THE LIABILITY HAS BEEN RAISED ON ACCOUNT OF NON CONTEST OF THE ISSUE AT THE END OF THE ASSESSEE . EVEN IF THE ASSESSEE DID NOT CONTEST THE ISSUE BEFORE THE ASSES SING OFFICER, IT HAS A RIGHT TO APPEAL AND IT CAN APPRISE THE HIGHER AUTHORITIES ABOUT THE UNSUSTAINABILITY OF THE DEMAND IN LAW. AC CORDING TO THE ASSESSEE ON THE PAYMENTS MADE WITH REGARD TO BR AIN LARA EVENT, IT HAD DEDUCTED THE TAX AND DEPOSITED TO THE GOVT. TREASURY. THESE FACTS OUGHT TO HAVE BEEN VERIFIED B Y THE ASSESSING OFFICER BEFORE RAISING A DEMAND AGAINST T HE ASSESSEE. TAKING INTO CONSIDERATION THESE DETAILS, WE ARE OF THE VIEW THAT THE ISSUE NEEDS TO BE RE-LOOKED AT THE END OF THE A SSESSING OFFICER. THIS INSTANCE OF THE BRAIN LARA IS BEING M ADE FOR DEMONSTRATIVE PURPOSE. OUR OBSERVATIONS IN REGARD T O THIS PAYMENT SHOULD NOT BE CONSIDERED AS AN EXPRESSION O F OPINION EITHER WAY. THE OBJECT OF MAKING REFERENCE IS ONLY TO ASCERTAIN WHETHER THE ISSUE IS TO BE SET ASIDE BEFORE THE ASS ESSING OFFICER FOR RE-VERIFICATION OR NOT?, BECAUSE WE DO NOT HAVE THE OPINION OF THE ASSESSING OFFICER ON THESE PAYMENTS. THE ASSESS EE DID NOT DISPUTED BEFORE THE ASSESSING OFFICER, THEREFORE, L OOKING TO ALL THESE ASPECTS, WE REMIT THIS ISSUE TO THE FILE OF T HE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL VERIFY ALL THE 36 PAYMENTS NARRATED IN ANNEXURE-I WITH THE ORDER. THE ASSESSEE IS DIRECTED TO SUBMIT COMPLETE DETAILS OF THE PAYMENTS INCLUDING T HE CHALLAN NOS. INDICATING THAT THE TDS WAS DEDUCTED AND IT WA S PAID TO THE GOVT. TREASURY. OUR OBSERVATION WILL NOT IMPAIR OR INJURE THE CASE ITA NOS.488 AND 1610 OF 2012 ING VYSYA BANK LTD BAN GALORE PAGE 5 OF 5 OF THE ASSESSING OFFICER AND WILL NOT CAUSE ANY PR EJUDICE TO THE DEFENSE/EXPLANATION OF THE ASSESSEE. THE ASSESSEE W ILL BE AT LIBERTY TO RAISE ANY PLEA OR SUBMIT ANY EVIDENCE IN SUPPORT OF ITS EXPLANATION. 5. AS FAR AS ITA NO.1610/BANG/2012 IS CONCERNED, IT IS CONSEQUENTIAL, BECAUSE WHATEVER MAY THE TDS LIABILI TY, INTEREST WOULD BE LEVIABLE ACCORDINGLY. SINCE WE HAVE SET AS IDE HE FIRST ISSUE FOR DETERMINING THE TDS LIABILITY, THE INTERE ST LIABILITY WOULD CONSEQUENTLY BE SET ASIDE TO THE ASSESSING OFFICER. IN VIEW OF THE ABOVE DISCUSSION, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DECEMBER, 2014. SD/- SD/- (JASON P. BOAZ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 1 ST DECEMBER, 2014 VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE