M/S VIBRANT ACADEMY (INDIA) PVT. LIT., KOTA V. INCOME TAX OFFICER (TDS), KOTA

ITA 52/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3615 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 12-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: TDS; Set aside
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 52/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 M/S VIBRANT ACADEMY (INDIA) PVT. LTD., KOTA CUKE VS. ITO, TDS, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: JDHVO2287F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI AMIT KUMAR JAIN (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI S. K. JAIN (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 19/06/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) KOTA, DATED 12.09.2017 FOR ASSESSMENT YE AR 2010-11 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LEARNED AO HAS ERRED IN TREATING THE REIMBURSEMENT OF EXPENSES I.E. TELEPHONE & MOBILE OF RS. 2000/- P.M., CONVEYA NCE EXPENSES OF RS. 3500/- P.M., NEWSPAPER & PERIODICALS EXPENSE S OF RS. 3500/- PAID TO SIX DIRECTORS OF THE COMPANY TOT ALING RS. 6,48,000/- AS PERQUISITES IN THE HANDS OF THE D IRECTORS AND ITA NO. 52/JP/2018 M/S VIBRANT ACADEMY (INDIA) PVT. LTD., KOTA V S. ITO, TDS, KOTA 2 FURTHER ERRED IN IMPOSING THE TDS LIABILITY U/S 192 B OF RS. 2,00,232/- AND INTEREST THEREON RS. 92,707/- TO TALING RS. 2,92,339/-. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LEARNED ASSESSING OFFICER HAS ERRED IN TREATING THE DISALLOWED EXPENDITURE OF THE COMPANY AS PERQUISITES IN THE HA NDS OF THE DIRECTORS THOUGH THE SAME WAS ALREADY ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE COMPANY AND FURT HER ERRED IN IMPOSING TDS LIABILITY U/S 192B OF RS. 2,00,232/- A ND INTEREST THEREON RS. 92,107/- TOTAL RS. 2,92,339/-. THUS TAX ING THE INCOME TWICE WOULD BE INJUSTICE IN THE EYES OF LAW IN WELL SETTLED MATTER. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE FY 2009-10 RELEVANT TO IMPUNGED ASSESSMENT YEAR, IT WAS NOTICED BY THE ASSESSING OF FICER THAT THE ASSESSEE MADE PAYMENT IN NATURE OF PERQUISITE TOWAR DS TELEPHONE & MOBILE EXPENSES, CONVEYANCE EXPENSES AND NEWSPAPER & PERIODICALS EXPENSES TO DIRECTORS OF THE ASSESSEE COMPANY ON WH ICH TDS HAS NOT BEEN DEDUCTED. THEREAFTER, A NOTICE U/S 201(1)/201( 1A) WAS ISSUED TO THE ASSESSEE AND IN RESPONSE, THE ASSESSEE COMPANY SUBMITTED THAT THESE WERE NOT PERQUISITE WERE PAID TO THE DIRECTOR S OF THE COMPANY RATHER THERE WERE REIMBURSEMENT OF EXPENDITURE INCU RRED BY THEM ON TELEPHONE, CONVEYANCE AND NEWSPAPER & PERIODICALS. THESE ARE NOT THE PART OF THE SALARY AND THEREFORE THERE WAS NO REQUI REMENT TO DEDUCT TDS U/S 192B OF THE I.T. ACT. THE REPLY SO FILED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER FOR THE R EASON THAT PERQUISITES ARE PART OF SALARY U/S 17(2) OF THE IT ACT. AS PER PROVISIONS OF SECTION 192B, THE ASSESSEE COMPANY WAS LIABLE TO DEDUCT TAX AT SOURCE ON SUCH ITA NO. 52/JP/2018 M/S VIBRANT ACADEMY (INDIA) PVT. LTD., KOTA V S. ITO, TDS, KOTA 3 PERQUISITE AND ON ITS FAILURE, THE ASSESSEE COMPANY WAS TREATED AS ASSESSEE IN DEFAULT FOR NON- DEDUCTION OF TDS AN D LIABILITY U/S 201(1) FOR SHORT DEDUCTION OF TDS OF RS. 2,00,232/- AND IN TEREST U/S 201(1A) AT RS. 92,107/- WAS RAISED ON THE ASSESSEE COMPANY. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO HOLDING THAT REIMBURSEMENT OF EXPENSES WAS DEFINITE LY IN NATURE OF PERQUISITES ON WHICH THE ASSESSEE COMPANY WAS REQUI RED TO DO TDS. NOW THE ASSESSEE COMPANY IS IN APPEAL BEFORE US. 4. THE LD. AR SUBMITTED THAT AS THE GENERAL RULE OF TAXATION UNLESS SPECIFICALLY EXPRESSED OR EMPLOYED, THE INCOME CANN OT BE TAXED TWICE AND IT WAS SUBMITTED THAT THE SAID REIMBURSEMENT OF EXPENSES TO THE DIRECTORS OF THE ASSESSEE COMPANY HAS ALREADY BEEN DISALLOWED BY THE ASSESSING OFFICER AND TREATED AS INCOME IN THE HAND S OF THE COMPANY AND FURTHER TAX LIABILITY IN FORM OF TDS ON THE SAM E DOES NOT ARISE IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED TH AT THE DIRECTORS OF THE ASSESSEE COMPANY HAVE ALREADY PAID TAXES ON THE SAID REIMBURSEMENT OF EXPENSES AND THEREFORE, IT WOULD B E A CASE WHERE THE REVENUE RECOVERS TAXES ONCE FROM THE ASSESSEE COMPA NY AND THEREAFTER FROM THE DIRECTORS. 5. THE DR IS HEARD WHO HAS RELIED ON THE ORDER OF T HE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE REIMBURSEMENT OF THE VARIOUS EXPENSES IN FORM OF TELEPHONE, CONVEYANCE, NEWS PAPER & PERIODICALS ETC HAVE NOT BEEN SPECIFICALLY EXEMPTED UNDER THE ACT HENCE THESE ARE IN NATURE OF PERQUISITE AS DEFINED SECTIO N 17(2) OF THE ACT ITA NO. 52/JP/2018 M/S VIBRANT ACADEMY (INDIA) PVT. LTD., KOTA V S. ITO, TDS, KOTA 4 WHICH HAVE BEEN PROVIDED BY THE COMPANY TO ITS DIRE CTORS AND LIABLE FOR TAX DEDUCTION AT SOURCE UNDER SECTION 192B OF THE A CT. AT THE SAME TIME, WHERE THE TAXES HAVE ALREADY BEEN RECOVERED F ROM THE RECIPIENT DIRECTORS, THE SAME CANNOT BE RECOVERED AGAIN FROM THE ASSESSEE COMPANY. IN THIS REGARD, USEFUL REFERENCE CANNOT BE DRAWN TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGES PVT. LTD. REPORTED IN 293 ITR 226 WH EREIN IT WAS HELD AS UNDER: 10. BE THAT AS IT MAY, THE CIRCULAR NO. 275/201/95 -IT(B), DATED 29-1- 1997 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, I N OUR CONSIDERED OPINION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES 'NO DEMAND VISUALIZED UNDER SECTION 201(1) OF THE INCOM E-TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED TH E OFFICER-IN-CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE- ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARG E INTEREST UNDER SECTION 201(1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXE S BY THE DEDUCTEE- ASSESSEE OR THE LIABILITY FOR PENALTY UNDER SECTION 271C OF THE INCOME- TAX ACT.' 7. WE ACCORDINGLY SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE MATTER AS TO WHETHER THE TAX ES HAVE ALREADY BEEN PAID BY THE DIRECTORS OF THE ASSESSEE COMPANY IN THEIR RETURN OF INCOME/INDIVIDUAL ASSESSMENT PROCEEDINGS AND WHERE THE AO FIND, AFTER DUE VERIFICATION, THAT THE SAID REIMBURSEMENTS OF E XPENSES HAVE SUFFERED TAXATION, TO THAT EXTENT, THE DEMAND RAISE D ON THE ASSESSEE COMPANY IS HEREBY DIRECTED TO BE DELETED. 8. FURTHER, AS FAR AS THE INTEREST U/S 201(1A) IS C ONCERNED, THE ASSESSEE SHALL BE LIABLE FOR SUCH INTEREST AND THE SAME HAS TO BE ITA NO. 52/JP/2018 M/S VIBRANT ACADEMY (INDIA) PVT. LTD., KOTA V S. ITO, TDS, KOTA 5 COMPUTED IN ACCORDANCE WITH PROVISIONS OF SECTION 2 01(1A) FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTABLE AT SOURCE TO THE DATE OF PAYMENT OF TAXES BY THE RESPECTIVE DIRECTORS OF THE ASSESSEE COMPANY AND TO QUANTIFY THE ACTUAL INTEREST LIABILITY, THE MATTER IS AGAIN SET-ASIDE TO THE FILE OF THE AO. IN THE RESULT, THE APPEAL OF THE ASSESSEE COMPANY I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/06/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/06/2018 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S VIBRANT ACADEMY (INDIA) PVT. LTD ., KOTA 2. IZR;FKHZ@ THE RESPONDENT- ITO,TDS- KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 52/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR