M/s. InterGlobe Aviation Ltd., Gurgaon V. DCIT, Ghaziabad

ITA 5789/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4139 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 20-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: NAGESH KR BHEL
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G , NEW DELHI BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 5 7 89 /DEL/201 5 A.Y. 20 13 - 14 (F.Y. 2012 - 13) INTERGLOBE AVIATION LTD. TOWER D, 4 TH FLOOR GLOBAL BUSINESS PARK DLF PHASE 3, MG ROAD GURGAON 122 002 PAN: AABC12726B VS . DCIT TDS CPC GHAZIABAD (APPELLANT) (RESPONDENT) APPELLANT BY SH. NAGESH KR. BHEL, C.A. RESPONDENT BY SHRI KAUSHLENDRA TIWARI, SR.D.R. DATE OF HEARING 03.01.2018 DATE OF PRONOUNCEMENT 12.01.2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST ORDER OF LD.CIT(A) - 35, NEW DELHI DATED 31.8.2015 , FOR ASSESSMENT YEA R 2013 - 14 ON THE FOLLOWING GROUNDS OF APPEAL. 1 . THAT THE LD.CIT(A) - 41, NEW DELHI ERRED IN LAW AND IN FACTS IN UPHOLDING THE DEMAND OF RS.94,776/ - RAISED VIDE INTIMATION DATED JULY 29, 2013 U/S 200A OF THE INCOME TAX ACT, 1961 ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 2 OF 9 (THE ACT) ON ACCOUNT OF ALLEGED LATE PAYMENT OF T AX DEDUCTED AT SOURCE (TDS). 2 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INTIMATION DATED JULY 29, 2013 ISSUED BY DY.CIT, TDS CPC, GHAZIABAD (LD.AO) U/S 200A OF THE ACT. 3 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPR ECIATING THAT THE DEMAND RAISED U/S 200A WAS ERRONEOUS TO THE EXTENT SUCH DEMAND DID NOT ARISE ON ACCOUNT OF ANY DEFAULT BY THE APPELLANT IN RELATION TO TIMELY DEPOSIT OF TDS IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 4 . THAT THE LD.CIT(A) ERRED IN LAW IN RELYING ON HOLDING THE DATE OF REALISATION AS THE DATE OF PAYMENT BY PLACING RELIANCE ON THE PROVISIONS OF RULE 20 OF CENTRAL GOVERNMENT ACCOUNT (RECEIPT AND PAYMENT) RULES, 1983 WITHOUT CONSIDERING THE OVERRIDING PROVISIONS OF NEGOTIABLE INSTRUMENTS ACT, 1881. 4 . 1 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE PROVISIONS UNDER N.I. ACT 1881 SHALL OVERRIDE THE PROVISIONS UNDER RULE 20 OF CENTRAL GOVERNMENT ACCOUNT (RECEIPT AND PAYMENT) RULES, 1983. 5 . THAT THE LD.CIT(A) ERRED IN LAW AN D IN FACTS IN PASSING THE ORDER IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE TO THE EXTENT THE APPELLANT WAS NOT PROVIDING AN OPPORTUNITY TO SHOW CAUSE AS TO WHY PROVISIONS OF RULE 20 OF CENTRAL GOVERNMENT ACCOUNT (RECEIPT AND PAYMENT) RULES, 1983 DID NOT APPLY TO THE FACTS OF THE CASE IN VIEW OF THE OVERRIDING PROVISIONS OF N.I. ACT, 1881. ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 3 OF 9 6 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN PASSING THE ORDER IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE TO THE EXTENT THE FOLLOWING GROUNDS OF APPEAL RAISED BY THE APPELLANT WAS NOT ADJUDICATED UPON BY WAY OF A SPEAKING ORDER: THAT WITHOUT PREJUDICE TO ABOVE GROUNDS, A.O. ERRED IN PASSING INTIMATION U/S 200A HOLDING THAT THERE IS INTEREST ON LATE PAYMENT OF TAX IS PAYABLE BY CHARGING INTEREST FOR 2 MONTHS ON DELAY OF LESS THAN 30 DAYS IN DEPOSIT OF TDS, INTEREST SHOULD HAVE BEEN CHARGED FOR 1 MONTH ONLY. 7 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE DEMAND RAISED U/S 200A WAS ERRONEOUS TO THE EXTENT THAT THE INTEREST LEVY ON ACCOUN T OF LATE DEPOSIT OF TDS WAS NOT COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 7 . 1 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE COMPUTATION OF INTEREST ON LATE DEPOSIT OF TDS WAS ERRONEOUS TO THE EXTENT THAT INTEREST WAS INCORRECTLY LEVIED FROM THE PERIOD BEGINNING FROM THE DATE OF DEPOSIT OF TDS INSTEAD OF THE DUE DATE OF DEPOSIT OF TDS. 7 . 2 . THAT THE LD.CIT(A) ERRED IN LAW AND IN FAC TS IN NOT APPRECIATING THAT THE COMPUTATION OF INTEREST ON LATE DEPOSIT OF TDS WAS ERRONEOUS TO THE EXTENT THAT PERIOD OF DELAY IN TERMS OF MONTHS WAS DETERMINED TO BE 2 MONTHS WITHOUT HAVING DUE REGARD TO THE FACT THAT THE TDS WAS DEPOSITED WITH DELAY OF LESS THAN 30 DAYS I.E. ONE (PARTIAL) MONTH. ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 4 OF 9 2 . BRIEF FACTS OF THE CASE ARE AS UNDER : ASSESSEE IS A COMPANY INCORPORATED IN INDIA. ASSESSEE WAS IN RECEIPT OF INTIMATION DATED JULY 29, 2013 ISSUED U/S 200A OF THE INCOME TAX ACT, 1961 ( THE ACT ) FROM TDS, CPC, AAYKAR BHAVAN, SECTOR 3, VAISHALI, GHAZIABAD, UP 201 010 ( TDS CPC ), WHEREIN, A SUM OF RS.94,776/ - HAS BEEN DETERMINED TO BE PAYABLE BY ASSESSEE AS INT EREST ON LATE PAYMENT OF TDS. 2.1. IT WAS SUBMITTED THAT AS THE AMOUNT WAS CREDITED INTO GOVERNMENT ACCOUNT ON 9 TH JUNE, 2012 INT EREST OF RS.94,776/ - WAS DETERMINED TO BE PAYABLE BY ASSESSEE. A SSESSEE VIDE LETTER DATED 12 /09/ 2013, SUBMITTED THAT DUE TO CERTAIN SYSTEM ERRORS AT ICICI BANK (THE BANK AUTHORISED FOR AND USED BY THE ASSESSEE FOR TDS PAYMENTS) END, THE AFORESAID TDS PAYMENT COULD NOT BE MADE IN TIME. UPON RECEIVING THE CLEAR DIRECTIONS FROM ICICI BANK, ASSESSEE M ADE THE REQUIRED TDS PAYMENT WITHOUT ANY DELAY. 2.2 . LD.AR SUBMITTED THAT THERE WAS ONE MORE ORDER PASSED BY TDS CPC FOR DELAY COMMITTED BY ASSESSEE IN DEPOSITING THE TDS AMOUNTING TO RS.13,72,48,928/ - FOR SAME ASSESSMENT YEAR ON WHICH TDS CPC LEVIED I NTEREST OF RS.41,76,980/ - . ON APPEAL BEFORE LD.CIT(A), THE INTEREST LEVIED WAS DELETED BY OBSERVING AS UNDER. 5.3. THE SUBMISSION OF THE APPELLANT AND THE FACTS ON RECORD ARE CONSIDERED. THE APPELLANT ALSO SUBMITTED A COPY OF E - MAIL SENT BY ICICI BANK TO THE APPELLANT CONFIRMING THAT THE SYSTEM WAS DOWN BETWEEN 7.55 PM 9.15 PM AND PAYMENT WAS INITIATED FROM THE APPELLANT S SIDE BETWEEN 7.56 PM AND 8.03 PM. AS EXPLAINED, AFTER THE INITIATION OF TRANSACTION BY THE APPELLANT ON 7 TH JUNE, ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 5 OF 9 2012, THE APPELLANT RECEIVED THE STATUS REPORT REGARDING PAYMENT AS E. THE BANK VIDE LETTER DATED 19.7.2012 EXPLAINED THAT THE LETTER E INDICATED UNSUCCESSFUL TRANSACTION LEADING TO DELAY IN DEPOSITING THE AMOUNT IN THE GOVERNMENT ACCOUNT. SINCE THE APPE LLANT MADE ALL OTHER DEPOSITS ON TIME, THIS IS THE ONLY INSTANCE WHERE DEPOSITS COULD NOT BE MADE DUE TO SYSTEM ERROR, THE DELAY IS NOT INTENTIONAL. ON THE PARTICULAR DAY, THE APPELLANT HAD ENOUGH FUND IN THE ACCOUNT AND DID NOT GET BENEFITED BY NOT MAKIN G THE DEPOSIT AS PER THE TIME STIPULATED. LD.AR SUBMITTED THAT THIS WAS THE IDENTICAL/SIMILAR CONDITION THAT EXISTED IN THE FACTS OF PRESENT CASE. HE SUBMITTED THAT REVENUE HAS ACCEPTED THE ABOVE ORDER OF LD.CIT(A), AND HAS NOT FILED ANY APPEAL BEFORE T HIS TRIBUNAL. 2.3. L D. DR ON THE OTHER HAND SUPPORTED THE ORDER S PASSED BY A UTHORITIES BELOW . 3. W E HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. WE HAVE OBSERVED F ROM THE RECORDS THAT THE AMOUNT OF TDS WAS DEBITED FROM BANK ACCOUNT OF ASSESSEE ON THE DUE DATE. IT IS OBSERVED THAT THE DELAY IN DEPOSIT OF SUCH TAX WAS ON ACCOUNT OF THE SYSTEM AND CONNECTIVITY ISSUE AT THE BANKER S E ND , WHICH WAS BEYOND CONTROL OF ASSESSEE. IT IS OBSERVED THAT L D. CIT (A) ALLOW ED THE CLAIM OF ASSESSEE IN RESPECT OF TDS DEPOSITED AMOUNTING TO RS.13,71,65, 276/ - , HOWEVER DISALLOWED THE CLAIM IN RESPECT OF ANOTHER PAYMENT AMOUNTING TO RS. 31,60,039/ - . BOTH THESE PAYMENTS WERE DELAYED BECAUSE OF SAME REASON OF A SYSTEM ERROR THAT HAS OCCURRED WITH THE ICICI BANK. ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 6 OF 9 3.1 . IT IS OBSERVED THAT THE LD. CIT (A) ACCEPTED THE JUSTIFICATION OFFERED BY ASSESSEE FOR DELAY CAUSED IN RESPECT OF 1 PAYMENT AND REJECTED THE OTHER WHICH WERE SIMILARLY PLACED. LD. AR PLACED RELIANCE UPON THE DECISION OF THIS T RIBUNAL IN THE CASE OF ACIT V S. S IEMENS N ETWORK PVT. L IMITED REPORTED IN (2017) 57 ITR (TRIB) 382. IN THIS CASE IDENTICAL ISSUE HAD ARISEN AND THIS T RIBUNAL DECIDED AS UNDER: 4. O N HAVING GONE THROUGH THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT UNDISPUTEDLY THE AMOUNT OF TDS WAS DEBITED FROM THE BANK ACCOUNT OF THE ASSESSEE ON THE DUE DATE I.E. OCTOBER 7, 2009 AND THE DELAY IN DEPOSIT OF SUCH TAX BY A DAY WAS ON ACCOUNT OF SYSTEM CONNECTIVITY ISSUES AT THE BANKERS' END, WHIC H WAS BEYOND THE CONTROL OF THE ASSESSEE. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) WAS THUS NOT JUSTIFIED IN HOLDING THE LEVY OF INTEREST ON THE ALLEGED LATE DEPOSIT OF TAX DEDUCTED AT SOURCE U/S 201 (1) READ WITH SECTION 201 ( 1 A) OF THE ACT. HE WAS, HOWEVER, JUSTIFIED IN DECIDING THE ISSUE OF DELAY IN PAYMENT OF TDS IN FAVOUR OF THE ASSESSEE QUESTIONED BY THE REVENUE IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. OGALE GLASS WORKS LTD. (1954) 25 ITR 529 (SC). THE FA CTS OF THE PRESENT CASE AS DISCUSSED ABOVE NEVERTHELESS DIFFERENT AS IN THE PRESENT CASE THE AMOUNT OF TDS WAS DEBITED FROM THE BANK ACCOUNT OF THE ASSESSEE ON THE DUE DATE INSTEAD OF PAYMENT BY CHEQUE. WE HOLD ACCORDINGLY. IN RESULT, GROUNDS OF THE APPEA L PREFERRED BY THE REVENUE ARE DISMISSED AND THOSE PREFERRED BY THE ASSESSEE ARE ALLOWED. 3.2. IN OUR CONSIDERED OPINION, THE ISSUE BEFORE US IS SQUARELY COVERED BY THE ABOVE STATED DECISION IN THE CASE OF ACIT V S. ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 7 OF 9 S IEMENS N ETWORK PVT. LTD. (SUPRA). RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE CLAIM OF ASSESSEE. ACCORDINGLY GROUND S RAISED BY ASSESSEE STAND ALLOWED. 4. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 2 T H JANUARY, 2018. S D / - S D / - (N.K.SAINI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 2 T H JANUARY, 2018 *MV ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 8 OF 9 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI ITA NO. 5789/DEL/2015 A.Y. 2013 - 14 (FY 2012 - 13) VS. DCIT INTERGLOBE AVIATION LTD. PAGE 9 OF 9 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON .01.18 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR .01.18 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER