M/s. Ace Tours World Pvt.Ltd., Surat V. The Jt.CIT.,TDS Range, Surat

ITA 529/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85514 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO . 529 /AHD/20 1 0 A. Y. 200 8 - 0 9 M/S. ACE TOURS WORLDWIDE PVT. LTD. F - 22/23, JOLLY PLAZA, GHOD DOD ROA D, SURAT. PAN: AAGCA 8835L VS JT. COMMISSIONER OF INCOME TAX , TDS RANGE, SURAT . (APPELLANT) (RESPONDENT) REVENUE BY : SHRI NIMESH YADAV, SR. D.R. ASSESSEE(S) BY : NONE / DATE OF HEARING : 0 1 / 01 /201 5 / DATE OF PRONOUNCEMENT: 16 / 01 /201 5 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE ASSESSEE EMANATING FROM AN ORDER OF THE L EARNED CIT - I, SURAT, DATED 10.12.2009 . THE ONLY GROUND RAISED IS REPRODUCED BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) HAS ERRED IN PARTLY CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN IMPOSING PENALTY U/S.271C OF THE IT ACT ON TDS TO BE DEDUCTED U/S.194C ON VEHICLE HIRING CHARGES AND TDS TO BE DEDUCTED U/S.192 ON THE DIRECTORS REMUNERATION ACCOUNT. THE LEARNED CIT(A) HAS CONFIRMED THE PENALTY ON TDS TO BE D EDUCTED AS ABOVE AFTER REMOVING THE CALCULATION MISTAKE IF ANY . 2. VIDE AN ORDER U/S.271(1)(C) DATED 29.02.2009 A PENALTY WAS IMPOSED ON THE ASSESSEE OF RS.8,12,168/ - ON ACCOUNT OF NON DEDUCTION OF TDS ON PAYMENT MADE TOWARDS VEHICLE CHARGES AND PAYMENT OF ITA NO. 529 /AHD/201 0 M/S. ACE TOURS WORLDWIDE PVT. LTD. VS. JT. CIT, TDS RANGE, SURAT. FOR A.Y. 200 8 - 09 - 2 - REMUNERATION TO THE DIRECTORS. FACTS OF THE CASE HAVE REVEALED THAT A SURVEY U/S.133A WAS CONDUCTED ON THE ASSESSEE AND ON VERIFICATION IT WAS FOUND THAT ON PAYMENT OF VEHICLE HIRING CHARGES OF RS.24,77,387/ - THE ASSESSEE HAS NOT DEDUCTED THE TDS. ACC ORDING TO AO , THE ASSESSEE HAS COMMITTED A DEFAULT U/S.194I OF THE ACT. SECONDLY , IT WAS ALSO NOTED THAT NO TAX WAS DEDUCTED ON PAYMENT OF REMUNERATION TO DIRECTORS OF RS.27,40,000/ - AS PRESCRIBED U/S.192 OF IT ACT. FOR THESE TWO DEFAULTS , THE ITO (TDS) HAD PASSED AN ORDER U/S.201/201(1A) DATED 16.02.2009. WHEN THE SAID ORDER WAS CHALLENGED BEFORE LEARNED CIT(A) - I, SURAT THEN VIDE ORDER DATED 12.11.2009 (APPEAL NO.CAS - I/274 & 275/2008 - 09) AN OBSERVATION WAS MADE THAT IN RESPECT OF VEHICLE HIRING CHARGES T HE PROVISIONS OF SECTION 194C SHOULD BE APPLICABLE AND NOT THE PROVISIONS OF SECTION 194I WAS APPLICABLE ; VIDE PARAGRAPH 3.3.1 IT WAS DIRECTED AS UNDER: 3.3.1 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. CLEARLY T HE CASE OF THE ASSESSEE FALLS U/S. 1 94C AND NOT U/S.194 I . THE CIRCULAR CITED IS NOT APPLICABLE TO TRAVEL AGENTS PROVIDING TAXI/CAR FACILITIES TO THE CUSTOMERS. THE BILLS COPY FURNISHED BY THE ASSESSEE CLEARLY SHOWS THAT THE VEHICLES ARE ARRANGED FOR CUSTOME RS ON CUSTOMER TO CUSTOMER BASIS. THESE VEHICLES ARE NOT TAKEN ON RENT BY THE ASSESSEE AND HENCE THE PROVISIONS OF SECTION 194 - 1 ARE NOT APPLICABLE BUT SECTION 194 - C ARE CLEARLY APPLICABLE AS THE ASSESSEE ENTERS INTO A CONTRACT WITH THE PARTIES FOR SUPPLYI NG VEHICLES TO THE CUSTOMERS. THE A.O. IS, THEREFORE, DIRECTED TO RECOMPUTE THE LIABILITY FOR BOTH THE ASSESSMENT YEARS U/S.194C. 3. WITH THIS BRIEF BACKGROUND, WE HAVE FOUND THAT THE APPELLANT HAS MOVED AN ADJOURNMENT APPLICATION WHICH WAS REJECTED BY U S PRIMARILY ON THE GROUND THAT THE ISSUE BEING TRIFLE IN NATURE CAN BE DECIDED IN THE ABSENCE OF LEARNED AR BUT AFTER HEARING THE LEARNED REPRESENTATIVE OF THE REVENUE DEPARTMENT. WE HAVE PROCEEDED ACCORDINGLY. LEARNED SR.D.R., MR. NIMESH YADAV, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 529 /AHD/201 0 M/S. ACE TOURS WORLDWIDE PVT. LTD. VS. JT. CIT, TDS RANGE, SURAT. FOR A.Y. 200 8 - 09 - 3 - 4. IN OUR CONSIDERED OPINION , ONCE THE ADMITTED FACTUAL POSITION WAS THAT THE PENALTY WAS INITIALLY INITIATED HAVING CONSIDERED THE DEFAULT OF THE ASSESSEE U/S.194I OF IT ACT ; BUT LATER ON BY LEARNED CIT(A) VIDE ORDER DATED 12.11.2009 (SUPRA) , W HILE DECIDING THE APPEAL OF AN ORDER PASSED U/S.201(I)/201(IA) OF IT ACT , HELD THAT THE TDS WAS REQUIRED TO BE DEDUCTED U/S.194C, THEN A QUESTION CAN BE RAISED THAT WHETHER THE ASSESSEE IS STILL PUNISHABLE FOR A DEFAULT WHICH WAS FOUND TO BE WRONG AND HELD THAT THE DEFAULT HAD FALLEN UNDER AN ANOTHER SECTION. FURTHERMORE, AN ANOTHER QUESTION CAN ALSO BE RAISED THAT IN A SITUATION WHEN CERTAIN DOUBTS WERE ABOUT THE DEFAULT OF THE ASSESSEE THEN WHY SUCH D EFAULT BE NOT CONSIDERED UND ER AN EXCEPTION PRESCRIBED U/S.273B OF IT ACT ; WHICH SAYS THAT NO PENALTY SHALL BE IMPOSABLE ON ASSESSEE FOR ANY FAILURE IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. SINCE, THE LEARNED COMMISSIONER HAS NOT CONSIDERED BOTH THESE ASPECT S WHILE DECIDING THIS APPEAL THEREFORE IN OUR CONSIDERED OPINION THE MATTER IS REQUIRED TO BE RESTORED BACK FOR DENOVO CONSIDERATION ; NEEDLESS TO MENTION ; ANY OTHER LEGAL QUESTION CAN AS WELL BE DECIDED. 4.1 WE HAVE ALSO CONSIDERED THE OTHER REASON FOR LEV Y OF PENALTY WHICH WAS A DEFAULT FOR NON DEDUCTION OF TDS FOR REMUNERATION TO DIRECTORS. IN THIS CONNECTION, AN ALTERNATE ARGUMENT BEFORE THE LOWER AUTHORITIES WAS THAT IF THE RESPECTED DIRECTORS HAVE PAID THE TAX IN THEIR RESPECTIVE HANDS BY FILING THE IN COME TAX RETURN FOR THE YEAR UNDER CONSIDERATION, WHETHER STILL THE ASSESSEE WAS PUNISHABLE FOR THE SAID DEFAULT ? SINCE, THIS FACTUAL POSITION HAS YET TO BE ASCERTAINED; THEREFORE, THIS PART OF THE ORDER ALSO REQUIRED TO BE RESTORED BACK TO THE FILE OF LEA RNED CIT(A) TO BE DECIDED ACCORDING TO THE PROVISIONS OF LAW. SIDE BY ITA NO. 529 /AHD/201 0 M/S. ACE TOURS WORLDWIDE PVT. LTD. VS. JT. CIT, TDS RANGE, SURAT. FOR A.Y. 200 8 - 09 - 4 - SIDE, WE HEREBY DIRECT THE ASSESSEE TO FURNISH ALL THOSE EVIDENCES AT AN EARLY DATE BEFORE LEARNED CIT(A) SO THAT THIS APPEAL CAN BE DECIDED AT AN EARLY DATE. RESULTANTLY, THE GROUND RAI SED BY THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. 5. IN THE RESULT, SINCE THE MATTER HAS BEEN RESTORED BACK FOR DENOVO CONSIDERATION TO THE FILE OF LEARNED CIT(A); THEREFORE, THIS APPEAL MAY BE TREATED AS ALLOWED FOR STATISTI CAL PURPOSE ONLY. SD/ - SD/ - (ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 16 / 01 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD