I.T.O., Aligarh V. The Regional Manager, Aligarh

ITA 53/AGR/2011

• Counselvise Citation: 5320314 RSA 2011
• Duration Of Justice: 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-11-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: AKSHAT AGARWAL
• Keywords: TDS
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 52 & 53/AGRA/2011 ASSTT. YEAR : 2009-10 & 2008-09 INCOME-TAX OFFICER, VS. THE REGIONAL MANAGER, U PSRTC, ALIGARH. GAUTAM LAL CHAURAHA, ALIGARH. (AGRU 10341 C) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.K. SHARMA, JR. D.R. FOR RESPONDENT : SHRI AKSHAT AGARWAL, C.A. DATE OF HEARING : 15.11.2011 DATE OF PRONOUNCEMENT : 15.11.2011 ORDER PER BENCH: THE REVENUE HAS FILED THESE APPEALS AGAINST THE IM PUGNED ORDERS DATED 29.11.2010 PASSED BY THE LD. CIT(A), GHAZIABAD. SINCE THE ISSU E INVOLVED IN BOTH THESE APPEALS AND THE GROUNDS RAISED THEREIN ARE IDENTICAL, THEREFORE, FO R THE SAKE OF CONVENIENCE, GROUNDS RAISED IN APPEAL NO. 52/AGRA/2011 ARE REPRODUCED AS UNDER : 1.1 . THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN CANCELING THE ORDER DATED 13.01.2009 PASSED BY THE ITO (TDS) & SURVEY), ALIGA RH AND IN DIRECTING THAT PROVISIONS CONTAINED IN SECTION 194C IS APPLICABLE ON THE PAYMENT MADE BY IPSRTC FOR HIRING OF BUSES, IGNORING THE FACT OF TH E CASE THAT THE DEDUCTOR COMPANY IS LIABLE TO DEDUCT THE TAX U/S. 194 I W.E. F. 01.06.2007. 1.2. IN DIRECTING SO, CIT(A) HAS FAILED TO APPREC IATE THE FOLLOWING : I). THE PAYMENT WAS MADE ESSENTIALLY FOR HIRING OF BUSES WHICH WERE GIVEN IN EXCLUSIVE POSSESSION AND USE OF THE ASSESSEE FOR A FIXED TENURE. ITA NO. 52 & 53/AGRA/2011 ASSTT. YEAR : 2009-10 & 2008-09 2 II). THE ASSESSEE, BEING THE HIRER WAS NOT ONLY IN EXCLUSIVE POSSESSION OF THE VEHICLE, BUT COULD ALSO USE THEM IN THE MANNER IT WANTED AND NO OTHER PERSON COULD USE THEM DURING THE TENANCY PERIOD. III). SECTION 194 I(A) (INTRODUCED W.E.F. 01.06.06) IS APPLICABLE AND THE BOARD CIRCULAR NO. 558 (DATED 28.03.1990) IS NO APP LICABLE AS IT WAS ISSUED PRIOR TO THE INTRODUCTION OF SEC. 194 I. THE CASE OF THE ASSESSEE IS DISTINGUISHABLE IN AS MUCH AS IN THE INSTANT CASE T HE VEHICLES HAD BEEN GIVEN ON HIRE FOR EXCLUSIVE POSSESSION AND USE OF T HE ASSESSEE FOR A TENURE PERIOD OF TWO YEARS WHEREAS THE CIRCULAR NO. 558 SP EAKS OF CASES WHERE PART TIME POSSESSION OF BUSES, I.E. 14 HOURS/DAY WE RE PROVIDED TO THE TRANSPORT AUTHORITIES. IV). THE HONBLE APEX COURT IN THE CASE OF M/S. ASS OCIATED HOTELS & INDIA LTD. VS. R.N. KAPOOR (AIR 1959 S. L 262) HAVE LAID DOWN CERTAIN TESTS FOR DETERMINATION FOR TENANCY. THE THIRD TEST THEREIN S TATES THAT IF UNDER THE DOCUMENTS, A PARTY GETS EXCLUSIVE POSSESSION OF THE PROPERTY, PRIMA FACIE, HE WILL BE CONSIDERED AS TENANT. IN THE INSTANT CAS E, EXCLUSIVE POSSESSION OF THE BUSES WERE GIVEN TO THE ASSESSEE AND HENCE SECT ION 194 I IS APPLICABLE ON THE ENTIRE PAYMENTS. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES. THEREFORE, THERE IS NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE STATED TH AT THE ISSUE IN DISPUTE IN BOTH THE APPEALS HAS ALREADY BEEN ADJUDICATED AND DECIDED BY THIS BENCH IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE IN ITA NOS.106 & 107/AGRA/2010 FOR A.Y. 2009-0 9 & 2007-08 VIDE ORDER DATED 18 TH AUGUST, 2011, COPY OF WHICH HAS ALSO BEEN FILED WHI CH IS AT PAGES 167 TO 171 OF THE PAPER BOOK FILED BY THE ASSESSEE. HE REQUESTED THAT THE PRESEN T APPEALS FILED BY THE REVENUE MAY BE DISMISSED. 3. THE LD. DR RELIED UPON THE ORDER PASSED BY THE A SSESSING OFFICER. ITA NO. 52 & 53/AGRA/2011 ASSTT. YEAR : 2009-10 & 2008-09 3 4. AFTER HEARING THE BOTH PARTIES AND PERUSING THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THE ISSUE IN DISPUTE, ESPECIALLY, THE ORDER PASS ED BY THIS BENCH, AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSES SEE BY THIS BENCH ON 18 TH AUGUST, 2011 IN ASSESSEES OWN CASE. FOR THE SAKE OF CONVENIENCE, T HE RELEVANT PORTION OF THE ORDER OF THIS BENCH (SUPRA) AT PARA 4 & 5 IS REPRODUCED AS UNDER : 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE US. THE FINDINGS OF THE TRIBUNAL IN THE CASE OF U.P. STATE ROAD TRANSPORT CORPORATION, RAJAPUR (SUPRA) ARE CONTAINED IN VARIOUS SUB-PARAGRAPHS OF PARAGRAPH NO. 5, WHICH IS REPRODUCED BELOW : 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AT THE OUTSET, WE CONCUR WITH THE VIEWS OF THE LD. CIT(A). UNDER SECTION 194-I, THE INCOME-TAX IS REQUIRED TO BE DEDUCTED AT SOURCE AT THE TIME OF PAYMENT OF AN INCOME BY WAY OF RENT AT THE RATE OF 10% FOR THE US E OF ANY MACHINERY OR PLANT OR EQUIPMENT, WHEREAS UNDER SECTION 194C OF THE ACT, T AX IS REQUIRED TO BE DEDUCTED AT THE RATE OF 2% FOR CARRYING OUT ANY WORK WHICH, INTER ALIA, INCLUDES CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS. THOUGH ALL TYPES OF MACHINERY, PLANT AND EQUIPMENT GIVEN O N HIRE ARE COVERED UNDER SECTION 194-I, BUT HIRING OF TRANSPORT VEHICLES GET S SPECIFICALLY COVERED UNDER SECTION 194C FOR THE PURPOSE OF TAX DEDUCTION AT SO URCE. THE TRANSPORT VEHICLES USED FOR CARRIAGE OF GOODS AND PASSENGERS ARE SUBJE CTED TO TDS AS PER CLAUSE (C) OF EXPLANATION III OF SUB-SECTION (2) OF SECTION 19 4C OF THE ACT, WHICH IS REPRODUCED BELOW : EXPLANATION III : FOR THE PURPOSES OF THIS SECTION , THE EXPRESS WORK SHALL ALSO INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION P ROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRA NSPORT OTHER THAN BY RAILWAYS; (D) CATERING. 5.1 THE CARRIAGE OF GOODS AND PASSENGERS BY ANY MOD E OF TRANSPORT FINDS PLACE IN SECTION 194C ONLY AND NOT IN SECTION 194I OF THE AC T. THERE IS NOTHING IN SECTION 194-I WITH REGARD TO DEDUCTION OF TAX ON TRANSPORT CONTRACTS. THEREFORE, PROVISIONS SPECIFICALLY PROVIDING FOR DEDUCTION OF TAX AT SOURCE ON CARRIAGE OF ITA NO. 52 & 53/AGRA/2011 ASSTT. YEAR : 2009-10 & 2008-09 4 GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT FIND PLACE IN SECTION 194C AND NOT IN SECTION 194-I OF THE ACT. UNDER THE RULE OF INTERPRETATION, SPECIFIC PROVISIONS PREVAIL OVER GENERAL PROVISIONS. THE REL IANCE HAS BEEN PLACED ON THE FOLLOWING JUDGMENTS IN SUPPORT OF THE CONTENTION OF THE ASSESSEE : (I). CIT VS. RAJASTHAN SPINNING AND WEAVING MILLS L TD (2004) 271 ITR 460 (RAJ.) (II). CIT VS. PRASAR BHARTI (BROADCASTING CORPN. OF INDIA) (2007) 292 ITR 580 (DEL.) 5.2. FURTHER RELIANCE WAS PLACED IN SUPPORT OF THE ASSESSEES CONTENTION ON VARIOUS CIRCULARS ISSUED BY THE C.B.D.T. AS UNDER : (I). CIRCULAR NO. 681 DATED 6.8.1994, (II). CIRCULAR NO. 715 DATED 8.8.1994, (III). CIRCULAR NO. 1/2008 DATED 10.1.2008, (IV). CIRCULAR NO. 713 DATED 2.8.1995, (V). CIRCULAR NO.717 DATED 14.8.1995, (VI). CIRCULAR NO.558 DATED 28.3.1990 5.3 IT WAS ALSO PLEADED BEFORE THE LD. CIT(A) THAT THE AFORESAID CIRCULARS AND INSTRUCTIONS HAVE NEITHER BEEN SUPERSEDED NOR WITHD RAWN AND THEY ARE STILL IN FORCE AND HAVE TO BE FOLLOWED BY THE INCOME-TAX AUT HORITIES. IN VIEW OF THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE LD. CIT(A) AND THE FINDINGS OF THE LD. CIT(A) ON THE BASIS OF THE PROV ISIONS CONTAINED IN SECTION 194C AND 194-I AND THE CIRCULARS AND THE DECISIONS RELIE D HEREINBEFORE, HIRING OF BUSES FROM VARIOUS PERSONS FOR CARRIAGE OF PASSENGERS BY THE ASSESSEE IS COVERED UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194-I . THE ASSESSEE HAS NOT COMMITTED ANY ERROR IN DEDUCTING THE TAX AT SOURCE UNDER SECTION 194C OF THE ACT FOR HIRING THE VEHICLES AND THE ITO, TDS IS NOT JUS TIFIED TO INCLUDE THE SAID CONTRACT UNDER SECTION 194-I OF THE ACT AND THEREFO RE, THE ASSESSEE CANNOT BE HELD IN DEFAULT UNDER SECTION 201(1)/201(1A)/206C(7) OF THE ACT AND ACCORDINGLY WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), W HO HAS CORRECTLY CANCELLED THE ORDER OF THE ITO, TDS DATED 3.9.2009. THUS, GROUNDS NO. 1 TO 8 OF THE REVENUE ARE DISMISSED. 5. A CO-ORDINATE BENCH HAS ALREADY TAKEN A DECISION IN THE MATTER AND, THEREFORE, JUDICIAL DISCIPLINE DEMANDS THAT WE FOLLOW THE DECI SION. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION, IT IS HELD THAT THE ASSESSEE WAS LIAB LE TO DEDUCT TAX ON THE PAYMENTS MADE TO VARIOUS CONTRACTORS U/S. 194C ONLY, AND THAT THE PR OVISION CONTAINED IN SECTION 194-I IS NOT APPLICABLE. ITA NO. 52 & 53/AGRA/2011 ASSTT. YEAR : 2009-10 & 2008-09 5 5. KEEPING IN VIEW OF THE AFORESAID FINDING OF THIS BENCH, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE. RESPECTFULLY FOLLOWING THE SAME, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.11.2011. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH NOVEMBER, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY