PEC University of Technology, Chandigarh V. ACIT (TDS), Chandigarh

ITA 493/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86147 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: N R SHARMA
• Section: 80C; 201(1); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 493/CHD/2014 ASSESSMENT YEAR: 2009-10 PEC UNIVERSITY OF TECHNOLOGY, V THE ACIT(TDS), COLLEGE COMPLEX, TDS-CIRCLE, SECTOR 12, CHANDIGARH. CHANDIGARH. PAN: AAFFT3184R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.R.SHARMA RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 02.02.2015 DATE OF PRONOUNCEMENT : 05.02.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) CHANDIGARH DATED 26.03.2014 FOR ASSESS MENT YEAR 2009-10 (FINANCIAL YEAR 2008-09) ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE ASSESSING OFFICER AS UPHEL D BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH IS BAD IN LAW AND IS BEYOND ALL THE CANNONS OF LAW AND JUSTICE . 2. THAT THE ORDER OF THE ASSESSING OFFICER AS UP HELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH DISALLOWING DEDUCTION U/S 80C IN RESPECT OF CONTRIB UTION TO THE GPF BY THE EMPLOYEES AND CREATING AN ADDITIONAL DEM AND OF RS. 14,98,908/- U/S 201(1) IS BAD IN LAW MORE SO IN VIEW OF THE SUBSEQUENT JUDGMENT OF THE HON'BLE PUNJAB & HAR YANA HIGH COURT IN CWP NO. 18644-CAT OF 2006 DATED 23.04 .2014 AND NEEDS TO BE SET ASIDE. 3. THAT THE ORDER OF THE ASSESSING OFFICER AS U PHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) CHANDIGARH CHARGI NG INTEREST U/S 201(1 A) AMOUNTING TO RS. 5,17,183/- IS B AD IN LAW MORE SO IN VIEW OF THE SUBSEQUENT JUDGMENT OF THE H ON'BLE PUNJAB & HARYANA HIGH COURT IN CWP NO. 18644-CAT OF 2 006 DATED 23.04.2014 AND NEEDS TO BE SET ASIDE. 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE CHALLENGED THE ORDER OF THE ASSESSING OFFICER BEFORE LD. CIT(A PPEALS) CREATING A DEMAND OF RS. 14,94,908/- UNDER SECTION 201(1) OF T HE ACT ON ACCOUNT OF SHORT DEDUCTION OF TAX AT SOURCE FROM PA YMENT OF THE SALARY AND OF RS. 5,17,183/- UNDER SECTION 201(1A) OF THE ACT ON THE SHORT DEDUCTION AND IN DISALLOWING THE CLAIM UN DER SECTION 80C OF THE ACT IN RESPECT OF EMPLOYEES, ARE NOT COVERED BY THE PRO VISIONS OF RECOGNIZED PROVIDENT FUND. 3. THE ASSESSING OFFICER NOTICED FROM THE SALARY D ETAILS IN FORM NO. 16, FURNISHED BY THE ASSESSEE DEDUCTOR THAT THE PERSON RESPONSIBLE (HEREINAFTER REFERRED TO AS 'PR') HAD A LLOWED DEDUCTION ON THE PROVIDENT FUND CONTRIBUTION OF THE EMPLOYEES, WHEREAS THE PROVIDENT FUND OF THE INSTITUTE WAS NOT APPROVED BY THE INCOME TAX DEPARTMENT AND SO THE DEDUCTION ALLO WED BY THE ASSESSEE ON ACCOUNT OF PROVIDENT FUND CONTRIBUTED B Y THE EMPLOYEES WAS NOT ALLOWABLE AS DEDUCTION. THE ASSES SING OFFICER ACCORDINGLY ISSUED SHOW CAUSE FOR TREATING THE 'PR' AS 'ASSESSEE IN DEFAULT' FOR NON DEDUCTION OF TAX AT SOURCE ON P ROVIDENT FUND CONTRIBUTIONS. THE LD. COUNSEL FOR THE APPELLANT HA D FILED A REPLY, BUT THE ASSESSING OFFICER NOTICED THAT NO DO CUMENTARY EVIDENCE WAS FILED FROM WHICH IT COULD BE VERIFIED THAT THE PROVIDENT FUND OF THE INSTITUTE WAS RECOGNIZED AND SO HE CREATED DEMAND OF RS. 14,98,908/- U/S 201(1) AND RS. 5,17,1 83/-U/S 201(1A) OF THE ACT 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED WRITT EN SUBMISSIONS, 3 RELEVANT PORTION OF WHICH IS REPRODUCED BELOW: ' IN THIS CONNECTION, IT IS SUBMITTED THAT THE P ERUSAL OF DEDUCTION U/S 80C OF THE INCOME TAX ON ACCOUNT OF CONTRIBUTIO N TOWARDS THE PROVIDENT FUND ALLOWED BY THE APPELLANT WHILE DEDUC TING TAX AT SOURCE U/S 192 OF THE INCOME TAX ACT FROM THE SALAR Y OF ITS EMPLOYEES ON THE GROUND THAT THE PROVIDENT FUND TO WHICH CONTRIBUTIONS WERE MADE WAS NOT RECOGNIZED AT THE R ELEVANT POINT OF TIME. THE RECOGNITION HAS BEEN GRANTED IN FAVOUR OF THE FUND TO THE APPELLANT W.E.F. 30.03.2012. THE CASE UNDER CON SIDERATION PERTAINS TO THE ASSESSMENT YEAR 2009-10. IT MAY ALS O BE SUBMITTED HERE THAT THE APPELLANT HAS FILED AN APPEAL AGAINST THE ORDER OF RECOGNITION SEEKING RECOGNITION TO THE FUND FROM PR IOR DATE WHICH IS PENDING BEFORE THE CHAIRMAN CENTRAL BOARD OF DIR ECT TAXES FOR DECISION. SINCE THE DEMAND HAS BEEN CREATED IN RESP ECT OF ALL THE EMPLOYEES OF THE PEC AS SUCH THE APPELLANT HAS ALSO FILED AN APPLICATION U/S 154 BEFORE THE ASSESSING OFFICER WH ICH IS ALSO PENDING. 5. THE LD. CIT(APPEALS), HOWEVER, DISMISSED THE APP EAL OF THE ASSESSEE. HIS FINDINGS IN PARA 5 & 6 OF THE IMPUGN ED ORDER ARE REPRODUCED AS UNDER : 5. I HAVE CONSIDERED THE SUBMISSION OF THE LD. C OUNSEL. AS PER THE SUBMISSION, THE PROVIDENT FUND OF THE INSTITUTE IS RECOGNIZED WITH EFFECT FROM 30.03.2012, WHEREAS THE INSTANT CA SE PERTAINS TO F.Y. 2008-09, MEANING THEREBY THAT THE PROVIDENT FU ND WAS NOT RECOGNIZED DURING THE YEAR UNDER CONSIDERATION. IT HAS BEEN CONTENDED BY THE LD. COUNSEL THAT APPEAL AGAINST TH E ORDER OF RECOGNITION OF PROVIDENT FUND FROM PRIOR DATE IS PE NDING BEFORE THE CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES; BUT TH E FACT OF THE MATTER IS THAT AS ON THE DATE, THE PROVIDENT FUND O F THE INSTITUTE IS NOT RECOGNIZED. THE CONTENTION OF THE APPELLANT THA T DEMAND HAS BEEN CREATED AGAINST THE EMPLOYEES OF THE INSTITUTE AND THE APPELLANT HAS FILED AN APPLICATION U/S 154 BEFORE T HE ASSESSING OFFICER ALSO DOES NOT HOLD WATER, SINCE THE APPELLA NT HAD WRONGLY ALLOWED DEDUCTION U/S 80C OF THE ACT ON ACCOUNT OF CONTRIBUTION TOWARDS A NONRECOGNIZED PROVIDENT FUND, WHILE DEDUC TING TAX AT SOURCE FROM THE SALARY OF THE EMPLOYEES. IN VIEW OF THIS DISCUSSION, IT IS HELD THAT THE T?R' HAS RIGHTLY BE EN TREATED AS 'ASSESSEE IN DEFAULT'. THE DEMAND CREATED U/S 201(1 ) AND 201(1A) IS ACCORDINGLY CONFIRMED. GROUNDS OF APPEAL TAKEN B Y THE APPELLANT ARE DISMISSED. 6. IN THE RESULT, THE APPEAL IS DIS MISSED. 4 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET POINTED OUT THAT THE LD. CIT(APPEALS), CHANDIGARH IN THE CASE O F THE SAME ASSESSEE FOR SUBSEQUENT ASSESSMENT YEAR 2010-11 ( F INANCIAL YEAR 2009-10) AND ASSESSMENT YEAR 2011-12 (FINANCIAL YEA R 2010-11) ON THE SAME SET OF FACTS ALLOWED THE CLAIM OF THE ASSE SSEE BY FOLLOWING THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT DATED 23.04.2014 IN CIVIL WRIT PETITION N O. 18644/2006 I N THE CASE OF JASWINDER SINGH & OTHERS VS UNION OF INDIA AND ALLO WED THE APPEALS OF THE ASSESSEE. COPY OF THE JUDGEMENT OF THE HON'BLE HIGH COURT AND ORDERS OF THE LD. CIT(APPEALS) DATED 26.0 4.2014 AND 26.08.2014 ARE FILED ON RECORD IN SUPPORT OF THE CO NTENTIONS. 7. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE JUDGEMENT OF THE HON'BLE HIGH COURT REFERRED TO ABO VE WHICH IS ALSO TAKEN INTO CONSIDERATION BY THE LD. CIT(APPEALS) IN SUBSEQUENT ASSESSMENT YEARS AS NOTED ABOVE AND FOLLOWING THE J UDGEMENT OF THE HON'BLE HIGH COURT ALLOWED APPEALS OF THE ASSES SEE. THE LD. CIT(APPEALS) NOTED IN THESE ORDERS THAT THE PROVIDE NT FUND ACCOUNTS OF THE EMPLOYEES OF THE ASSESSEE UNIVERSIT Y ARE TO BE MAINTAINED BY THE OFFICE OF CAG AND CONSEQUENT ACTI ON TO BE TAKEN QUA TRANSFER OF FUNDS FROM PRIVATE TRUST TO THE CAG . THE CONTRIBUTION MADE BY THE EMPLOYEES IS TO BE TREATED AS CONTRIBUTION TO GOVERNMENT PROVIDENT FUND AND DEDUCTION UNDER SE CTION 80C IS ALLOWABLE TO THESE EMPLOYEES. THE LD. CIT(APPEALS) , IN VIEW OF THE JUDGEMENT OF THE HON'BLE HIGH COURT HELD THAT THE A SSESSEE CANNOT 5 BE TREATED AS ASSESSEE IN DEFAULT AND ACCORDINGLY, ALLOWED THE APPEAL OF THE ASSESSEE. 9. ON CONSIDERATION OF THESE FACTS IN THE LIGHT OF THE JUDGEMENT OF HON'BLE HIGH COURT, WE ARE OF THE VIEW THAT THE ORDER OF THE LD. CIT(APPEALS) CANNOT BE SUSTAINED. THE ASSESSEE, T HEREFORE, CANNOT BE HELD TO BE ASSESSEE IN DEFAULT AND ACCORDINGLY, THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND APPEAL OF THE A SSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH FEBRUARY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH