EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT, BILASPUR(CG) V. INCOME TAX OFFICER- (TDS), BILASPUR(CG)

ITA 49/BIL/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0543 (ITAT-RAIPUR)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: YACUB TOPPO JCIT TDS
• Assessee Lawyers: G S AGARWAL
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

, RAIPUR IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BEFORE S/SHRI G.D.AGARWAL( VP) & MUKUL KR. SHRAWAT (JM) . . , , ./ I.T.A. NO. 49/RPR/2015 ( / ASSESSMENT YEAR : 2013 - 2014 ) EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT, (BRIDGE CONSTRUCTION DVN), BEHIND TOWN HALL, COLLECTORATE ROAD, BILASPUR / VS. ITO (TDS), INCOME TAX OFFICE, MAHIMA COMPLEX, VYAPAR VIHAR BILASPUR ./ ./ PAN/GIR NO. : BPLOO 0458 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SH G.S.AGARWAL, / RESPONDENT BY : SHRI YACUB TOPPO, JCIT (TDS) / DATE OF HEARING :06 - 10 - 2015 / DATE OF PRONOUNCEMENT : 09 - 10 - 2015 / O R D E R PER MUKUL KR SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED B Y THE ASSESSEE EMANATING FROM A CONSOLIDATED ORDER OF THE LD CIT(A), BILASPUR DATED 4.2.20 14 PASSED UNDER SECTION 201(1)/ 201(1A) OF THE ACT. 2 I.T.A. NO.49/RPR/2015 ASSESSMENT YEAR : 2013 - 2014 2. GROUNDS RAISED ARE NARRATIVE AS WELL AS ARGUMENTATIVE. HOWEVER, THE MAIN ISSUE ARGUED BEFORE US IS AS PER THE FOLLOWING GROUND: THAT T HE ORDER OF THE LD CIT(A) IS BAD IN LAW AS WELL AS IN FACTS, IN CONFIRMING THE IMPUGNED ORDER OF THE ITO (TDS), BILASPUR, SO FAR IT RELATES TO IMPOSITION OF LIABILITY OF TDS ON THE APPELLANT, FOR NON DEDUCTION OF TAX ON PAYMENTS ADVANCED TO RITES LIMITED (CONSULTANTS) OF RS.3,00,00,000/ - FOR CONSTRUCTION OF ROAD OVER BRIDGE U/S.194C AND THEREBY IN MISINTERPRETING THE FACT THAT THE MONEY ADVANCED TO RITES LTD FOR DISBURSEMENT TO THE CONTRACTOR (FOR CONSTRUCTION OF BRIDGE) ON BEHALF OF PWD HENCE WAS IN THE N ATURE OF DEPOSIT WITH THE CONSULTANT NOT REQUIRING TDS UNDER ANY PROVISION OF INCOME TAX ACT, 1961. HOWEVER, THE CONSULTANCY CHARGES PAID SEPARATELY TO THE RITES LTD., AS PER THE DETAILS FURNISHED ELSEWHERE IN THE GROUNDS OF APPEAL ARE LIABLE TO TDS U/S .194J. 3. THE REGISTRY HAS INFORMED THAT THE APPEAL IN QUESTION WAS FILED BELATEDLY. THE LD A.R. HAS PRAYED THAT THE ORDER DATED 13.11.2014 WAS RECEIVED LATE BY THE ASSESSEE IN THE MONTH OF FEBRUARY, 2015, HENCE THE APPEAL WAS FILED IMMEDIATELY THEREAFT ER ON 17.4.2015. ACCORDING TO LD A.R., THE DELAY WAS ONLY THREE DAYS, WHICH MAY BE CONDONED. HE HAS ALSO POINTED OUT THAT DUE TO AN INADVERTENT MISTAKE THE DATE MENTIONED AT COLUMN NO.9 OF APPEAL MEMO ON FORM - 36 WAS MENTIONED AS 13.2.2014, THE DATE OF C OMMUNICATION, BUT THE CORRECT DATE OF COMMUNICATION WAS 13.2.2015. IN SUPPORT OF THE EXACT DATE OF COMMUNICATION, A WRITTEN LETTER VERIFYING THE CORRECT DATE OF COMMUNICATION HAS ALSO BEEN PLACED ON RECORD. CONSIDERING THESE FACTS, WE HEREBY CONDONE THE D ELAY AND ADMIT THIS APPEAL FOR ADJUDICATION. 4. THE APPELLANT IS A GOVERNMENT ORGANISATION AND ACTION U/S.133A WAS TAKEN RESULTED INTO THE ALLEGED SHORT DEDUCTION OF TDS. IT WAS DETECTED THAT THERE 3 I.T.A. NO.49/RPR/2015 ASSESSMENT YEAR : 2013 - 2014 WAS SHORT DEDUCTION OF RS.68,860/ - U/S.194C AND ALSO A SH ORT DEDUCTION OF RS.33,12,182/ - U/S.194J OF THE I.T.ACT, RESPECTIVELY ON PAYMENTS MADE TO VARIOUS PARTIES. THE AO MADE THE LIST OF THOSE PARTIES WHILE PASSING THE ORDER U/S.2 01(1)/ 201(1A) OF THE ACT DT.15.1.2014. THE MAIN REASON WAS THAT THE ASSESSEE HAS CLAIMED THAT THE PAYMENT MADE TO RITES LTD., WAS DEDUCTIBLE U/S.194C OF I.T.ACT, 1961, ON THE OTHER HAND THE REVENUES STAND WAS THAT THE PAYMENT OF RS.3,00,000/ - TO RITES LIMITED, WAS IN THE NATURE OF CONSULTANCY CHARGES , HENCE TDS WAS REQUIRED TO BE DEDUCTED U/S.194J OF THE ACT. THERE WERE OTHER CERTAIN SHORTFALL OF DEDUCTION S, WHICH WERE ALSO TAKEN INTO ACCOUNT BY THE AO AND THEREUPON THE LIABILITY OF SHORT DEDUCTION U/S.194C O F RS.68,860/ - AND U/S.194J OF RS.33,12,182/ - WAS IMPOSED. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE ACTION OF THE AO WAS AFFIRMED. 6. FROM THE SIDE OF THE APPELLANT, SHRI G.S.AGARWAL, LD A.R. APPEARED. AT THE OUTSET, OUR ATTE NTION HAS BEEN DRAWN ON A SEPARATE PAPER BOOK CONTAINING 28 PAGES STATED TO BE ADDITIONAL EVIDENCES. THE LD A.R. HAS MADE A PRAYER TO ADMIT ALL THOSE ADDITIONAL EVIDENCES SO AS TO DEMONSTRATE THAT THE CONTRACT WITH RITES LIMITED WAS NOT IN THE NATURE OF CONSULTANCY SERVICE. 7. FROM THE SIDE OF THE REVENUE, SHRI YACUB TOPPO, LD D.R. HAS STRONGLY OBJECTED TO THE PRODUCTION OF ADDITIONAL EVIDENCES AT THE STAGE OF SECOND APPEAL. ACCORDING TO LD D.R. SUFFICIENT OPPORTUNITIES WERE GRANTED BY THE REVENUE AUTHO RITIES BUT THE ASSESSEE DID NOT FURNISH THOSE EVIDENCES AT THAT STAGE, THEREFORE, NO FURTHER OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE. 4 I.T.A. NO.49/RPR/2015 ASSESSMENT YEAR : 2013 - 2014 8. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE OF NATURE OF PAY MENT CAN ONLY BE ASCERTAINED AFTER EXAMINING THE AGREEMENT EXECUTED WITH RITES LIMITED BY THE ASSESSEE. THE APPELLANT HAS PROCURED THE ACCOUNTS OF RITES LTD., AND THE LETTERS ISSUED BY THE SAID PARTY SO AS TO CLARIFY THE NATURE OF PAYMENTS RECEIVED. THE ASSESSEE HAS ALSO FURNISHED BILLS/INVOICES OF RITES LIMITED AS ADDITIONAL EVIDENCES AS EVIDENCE THAT THE PAYMENTS WERE MADE IN RESPECT OF WORK ORDER AND NOT AS CONSULTANCY CHARGES. IT HAS BEEN EMPHASIZED THAT THE AGREEMENT WAS TO EXECUTE THE CONSTRUCTION AS WELL. IN OUR CONSIDERED OPINION, ALL THESE EVIDENCES WHICH ARE NOW SUBMITTED AS ADDITIONAL EVIDENCES HAVE A DIRECT BEARING AS WELL AS VITAL IMPACT ON THE ISSUE RAISED AS PER THE GROUND. ALTHOUGH IT IS CORRECT THAT THE ASSESSEE WAS GRANTED OPPORTUNIT Y OF HEARING BY THE REVENUE AUTHORITIES BUT STILL THE NATURAL JUSTICE DEMANDS TO BE FAIR AND REASONABLE TOWARDS A TAXPAYER SO THAT A RIGHTFUL TAX CAN BE RECOVERED FROM HIM. IT IS WELL SETTLED LAW THAT A LITIGANT SHOULD NOT BE THROWN OUT OF LITIGATION AT T HE VERY THRESHOLD ON THE GROUND THAT HE DID NOT FURNISH THE EVIDENCE AT T HE INITIAL STAGE OF PROCEEDINGS, ESPECIALLY WHEN AT A LATER STAGE, CERTAIN VITAL EVIDENCES HAVE BEEN COLLECTED BY HIM HAVING GREAT IMPACT TO DECIDE THE ISSUE. WE, THEREFORE, DEEM IT PROPER AND JUSTIFIABLE TO RESTORE THIS ISSUE TO THE FILE OF THE AO SO THAT HE CAN INVESTIGATE ALL THOSE EVIDENCES AND THEREUPON DECIDE THE ISSUE ON MERITS AS PER LAW. NEEDLESS TO DIRECT, THE APPELLANT SHOULD FULLY COOPERATE WITH THE PROCEEDINGS TO GET THE MATTER RESOLVED AT AN EARLY DATE. SINCE WE HAVE RESTORED THE ISSUE FOR DENOVO 5 I.T.A. NO.49/RPR/2015 ASSESSMENT YEAR : 2013 - 2014 CONSIDERATION, THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 09/ 10/2015 . SD/ - SD/ - ( . . , ) ( , ) G . D . AGARWAL , VICE PRESIDENT MUKUL KR SHRAWAT , JUDICIAL MEMBER RAIPUR , DATED 09 / 10/2015 . . ./ PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : EXECUTIVE ENGINEER, PUBLIC WORKS DEPARTMENT, (BRIDGE CONSTRUCTION DVN), BEHIND TOWN HALL, COLLECTORATE ROAD, BILASPUR 2. / THE RESPONDENT: ITO (TDS), INCOME TAX OFFICE, MAHIMA COMPLEX, VYAPAR VIHAR BILASPUR 3. ( ) / THE CIT(A) - BILASPUR 4. / CIT (TDS), BHOPAL, MP 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR