Goshree Islands Dev.Authority, Ernakulam V. ITO, Cochin

ITA 540/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65067 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: M V TOMY
• Section: 201(1)

Judgement Text

1 ITA NO. 539 & 540/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 539 & 540/COCH/2011 (ASSESSMENT YEARS 2007-08) GOSHREE ISLANDS DEVELOPMENT AUTHORITY VS ITO (INTER NATIONAL TAXATION) M.V. TOMY & CO, CAS KOCHI OLD CIVIL STATION ROAD, KAKKANAD ERNAKULAM PAN : AAALS0852N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.V. TOMY RESPONDENT BY : SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 07-12-2012 DATE OF PRONOUNCEMENT : 21-12-2012 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE TAXPAYER ARE DIRECTED AGAI NST THE TWO INDEPENDENT ORDERS OF COMMISSIONER OF INCOME-TAX(A) U/S 201(1) AND 201(1A) FOR THE ASSESSMENT YEAR 2007-08. THEREFORE , WE HEARD THE SAME TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORD ER. 2 ITA NO. 539 & 540/COCH/2011 2. SHRI M.V.TOMY, THE LD.REPRESENTATIVE FOR THE TAX PAYER SUBMITTED THAT THE TAXPAYER IS A STATE GOVERNMENT UNDERTAKING ENGA GED ITSELF IN THE DEVELOPMENT OF GOSHREE ISLAND SITUATED IN THE BACKW ATERS OF KOCHI. DURING THE YEAR UNDER CONSIDERATION THE TAXPAYER HAD SOLD LANDS LYING IN THE COCHIN BACKWATERS. SINCE THERE WAS SOME DISPUTE AM ONGST THE BIDDERS, THE SUPREME COURT DIRECTED THE TAXPAYER TO REFUND THE A MOUNT TO ONE SHRI VENUGOPALAN NAIR TOGETHER WITH INTEREST. THE AGREE D INTEREST COMES TO NEARLY 4,04,11,620. THE ENTIRE AMOUNT AND INTEREST WAS PAID ON 07-03- 2007 AFTER DEDUCTING TAX ON THE INTEREST @11.22%. HOWEVER, THE ASSESSING OFFICER FOUND THAT SHRI VENUGOPALAN NAIR IS AN NRI, THEREFORE, TAX HAS TO BE DEDUCTED @33.66% U/S 195 OF THE ACT. THEREFORE, FO R SHORT DEDUCTION OF TAX THE TAXPAYER WAS TREATED AS TAXPAYER IN DEFAULT . THE LD.REPRESENTATIVE SUBMITTED THAT THE TAXPAYER HAS FURNISHED ALL THE I NFORMATION INCLUDING THE PERMANENT ACCOUNT NUMBER OF THE RECIPIENT OF THE IN TEREST. THEREFORE, IT IS FOR THE ASSESSING AUTHORITY TO VERIFY WHETHER THE R ECIPIENT HAS PAID THE TAX OR NOT. ACCORDING THE LD.REPRESENTATIVE, ONCE THE RECIPIENT PAID THE TAX THEN THE TAXPAYER CANNOT BE TREATED AS TAXPAYER IN DEFAULT. 3 ITA NO. 539 & 540/COCH/2011 3. SMT. SUSAN GEORGE VERGHESE, THE LD.DR SUBMITTED THAT THE TAXPAYER HAS FURNISHED ONLY THE PERMANENT ACCOUNT NUMBER OF THE RECIPIENT OF INTEREST AND HE HAS NOT FURNISHED ANY OTHER DETAILS REGARDING PAYMENT OF TAX BY THE RECIPIENT. ACCORDING TO THE LD.DR, IT I S FOR THE TAXPAYER TO FURNISH INFORMATION REGARDING THE PAYMENT OF TAX BY THE REC IPIENT. REFERRING TO PROVISIONS OF SECTION 195 OF THE ACT THE LD.DR SUBM ITTED THAT IT IS THE RESPONSIBILITY OF THE PERSON WHO IS PAYING INTEREST TO DEDUCT TAX AT THE APPROPRIATE RATE. THEREFORE, THE TAXPAYER HAS TO D EDUCT TAX AT 33.66% U/S 195 OF THE ACT. THEREFORE, THE COMMISSIONER OF INC OME-TAX(A) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PAYM ENT OF INTEREST AND LIABILITY TO DEDUCT TAX IS NOT IN DISPUTE. WHAT IS IN DISPUTE IS THE RATE OF TAX. THE TAXPAYER HAS DEDUCTED TAX AT 11.22%. HOWEVER, THE DEPARTMENT CLAIMS THAT THE TAXPAYER OUGHT TO HAVE DEDUCTED TAX @33.66 % U/S 195 OF THE ACT. THOUGH THE TAXPAYER CLAIMED BEFORE THE ASSESSING OF FICER THAT SHRI VENUGOPALAN NAIR WAS NOT AN NRI THE LD.REPRESENTATI VE FOR THE TAXPAYER CONFINED HIS ARGUMENT BEFORE THIS TRIBUNAL ONLY IN RESPECT OF PAYMENT OF 4 ITA NO. 539 & 540/COCH/2011 TAX BY THE RECIPIENT. NO DOUBT, IF THE TAX WAS PAI D BY THE RECIPIENT, THEN THERE CANNOT BE ANY RECOVERY FROM THE TAXPAYER FOR NON DEDUCTION OR SHORT DEDUCTION OF TAX. HOWEVER, THE FACT HAS TO BE VERI FIED. THE TAXPAYER BEING A STATE GOVERNMENT ORGANIZATION AND HAS ALREADY FUR NISHED THE PERMANENT ACCOUNT NUMBER OF THE RECIPIENT OF THE INTEREST, TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT VERIFYING THE STATUS OF THE PAYMENT BY THE RECIPIENT MAY NOT PREJUDICE THE INTEREST OF THE REVENUE. HOWE VER, THE TAXPAYER SHALL ALSO CO-OPERATE WITH THE DEPARTMENT BY FURNISHING A LL THE REQUIRED PARTICULARS. SINCE THE DEPARTMENT HAS ALREADY HAVI NG THE PERMANENT ACCOUNT NUMBER OF SHRI VENUGOPALAN NAIR, THE RECIPI ENT OF THE INTEREST, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER CAN EASILY BE VERIFIED WHETHER THE RECIPIENT MR. VENUGOPALAN NAIR HAS PAID THE TAX OR NOT? THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IF THE R ECIPIENT HAS PAID THE ENTIRE TAX, THEN THE TAXPAYER CANNOT BE TREATED AS TAXPAYE R IN DEFAULT. AT THE VERY SAME TIME, THE TAXPAYER IS LIABLE TO PAY INTEREST F ROM THE DATE ON WHICH THE SHORT DEDUCTION WAS MADE TILL THE PAYMENT OF ENTIRE TAX PAYMENT BY THE RECIPIENT, SHRI VENUGOPALAN NAIR. SINCE THE MATTER NEEDS TO BE VERIFIED THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ISSU E NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , THE ORDERS OF LOWER 5 ITA NO. 539 & 540/COCH/2011 AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO VERIFY WHETHER THE RECIPIENT, SHRI VENUGOPALAN NAIR PAID T HE ENTIRE TAX OR NOT? THE TAXPAYER SHALL FURNISH ALL THE REQUIRED PARTICU LARS BEFORE THE ASSESSING OFFICER TO CARRY OUT THE VERIFICATION BY THE ASSESS ING OFFICER. THE ASSESSING OFFICER THEREAFTER SHALL DECIDE THE ISSUE IN ACCORD ANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE TAXPAYER. 5. WITH THE ABOVE OBSERVATION, BOTH THE APPEALS OF THE TAXPAYER ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DECEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 21 ST DECEMBER, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH