MOBILE TRADING & INVESTMENT P.LTD, MUMBAI V. ACIT, CPC-TDS, Ghaziabad

ITA 5895/MUM/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9619 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 15-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DINKLE HARIA LD
• Keywords: Principle of natural justice; TDS
• Section: 200A; 201; 139

Judgement Text

ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1 . ./ I.T.A. NO. 5895 /MUM/ 2017 ( / ASSESSMENT YEAR: 2008 - 09 ) MOBILE TRADING & INVESTMENT PVT. LTD. 141, MITTAL TOWER, C - WING NARIMAN POINT, MUMBAI - 400 021 / VS. A CIT CPC - TD S AAY KAR BHAVAN, SECTOR - 3, VAISHALI, GHAZIABAD (UP) PIN 201010 ./ ./ PAN/ TAN A A CCM - 1419 - N / MUMM - 27615 - A ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : MS. DINKLE HARIA, LD. AR REVENUE BY : SHRI BHARAT ANDHALE , LD. SR . DR / DATE OF HEARING : 01/06 /2021 / DATE OF PRONOUNCEMENT : 26 / 07 / 2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR (AY) 2008 - 09 ARISES OUT OF THE ORDER OF LEAR NED COMMISSIONER OF INCOME - TAX (APPEALS) - 59 , MUMBAI [CIT(A)], APPEAL NO. CIT(A)59/IT - 133/ITO(TDS) - 1(3)(4)/2015 - 16 DATED 30 /06 /20 17 ON FOLLOWING GROUNDS OF APPEAL: - 1. NATURAL JUSTICE: 1.1 IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN L AW, COMMISSIONER OF INCOME - TAX APPEALS - 59, MUMBAI, ['THE CIT(A)'] BE HELD AS HELD AS BAD AND ILLEGAL, AS THE SAME IS FRAMED IN BREACH OF THE PRINCIPALS OF NATURAL JUSTICE. ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 2 2. WITHOUT PREJUDICE TO THE ABOVE: 2.1 THE COMMISSIONER OF INCOME - TAX (AP PEALS) - 59, MUMBAI ['ID. C IT (A)'] ERRED IN CONFIRMING, ACTION OF THE A.O. IN MAKING ADDITION ON ACCOUNT OF SHORT DEDUCTION OF TDS AMOUNTING TO RS. 91,770/ - AT SERIAL NO. (2) OF THE INTIMATION U/S. 200A DATED 07.10.2015. 2.2 IT IS SUBMITTED THAT, IN T HE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 2.3 WITHOUT PREJUDICE TO THE ABOVE, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE COMPUTATION OF THE SAME IS NOT IN ACCORDANCE WITH THE LAW, I S ARBITRARY AND EXCESSIVE. 3.1 THE LD. CIT (A) ERRED IN CONFIRMING, ACTION OF THE A.O. IN LEVYING INTEREST U/S. 201(1A) OF THE ACT, 1961 FOR LATE PAYMENT OF TAX DEDUCTED AT SOURCE AMOUNTING TO RS. 1,18,754/ - AT SERIAL NO. 3(B) OF THE INTIMATION AS STATE D ABOVE. 3.2 IT IS SUBMITTED THAT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH CONFIRMATION WAS CALLED FOR. 3.3 WITHOUT PREJUDICE TO THE ABOVE, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CALCULATION OF T HE INTEREST IS NOT IN ACCORDANCE WITH THE LAW, IS ARBITRARY AND EXCESSIVE. 4.1 THE LD. CIT (A) ERRED IN SETTING ASIDE TO THE A.O., THE ISSUE OF LEVYING INTEREST U/S. 2 0 1(1A) OF THE ACT, 1961 FOR SHORT DEDUCTION OF TAX AT SOURCE AMOUNTING TO RS.93,432/ - AT SERIAL NO. 4(A) OF THE INTIMATION AS STATED ABOVE. 4.2 WHILE DOING SO THE CIT(A) ERRED IN OBSERVING THAT, 'INTEREST U/S. 201(1A) OF THE ACT, 1961 IS TO BE RECOMPUTED, THE PERIOD FOR WHICH WILL COMMENCE FROM THE DATE ON WHICH TAX WAS FIRST DEDUCTIBLE B Y THE APPELLANT DEDUCTOR AND CONCLUDE ON THE DATE OF FILING OF THE RELEVANT RETURN OF INCOME BY THE RECIPIENT DEDUCTEES'. 4.3 IT IS SUBMITTED THAT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ACTION WAS CALLED FOR. 4.4 WIT H OUT PREJUDICE TO THE ABOVE, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CALCULATION OF THE INTEREST IS NOT IN ACCORDANCE WITH THE LAW, IS ARBITRARY AND EXCESSIVE. 5.1 THE LD. CIT (A) ERRED IN SETTING ASIDE TO THE A.O., THE ISSUE OF LEVYING INTEREST U/S. 201(1A) OF THE ACT, 1961 ON LATE DEDUCTI ON/ COLLECTION AMOUNTING TO RS. 1,18,754/ - AT SERIAL NO. 4(B) OF THE INTIMATION AS STATED ABOVE. 5.2 WHILE DOING SO THE CIT(A) ERRED IN OBSERVING THAT, 'INTEREST U/S. 201(1A) OF THE ACT, 19 6 1 IS TO BE RECOMPUTED, THE PERIOD FOR WHICH WILL COMMENCE FROM THE DATE ON WHICH TAX WAS FIRST DEDUCTIBLE BY THE APPE LLANT DEDUCTOR AND CONCLUDE ON THE DATE OF FILING OF THE RELEVANT RETURN OF INC OME BY THE RECIPIENT DEDUCTEES. 5.3 IT IS SUBMITTED TH A T, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ACTION WAS CALLED FOR. 5.4 WITHOUT PREJUDICE TO THE ABOVE, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CALCULATION OF INTEREST IS NOT IN ACCORDANCE WITH THE LA W, IS ARBITRARY AND EXCESSIVE. 1.2 THE REGISTRY HAS NOTED A DELAY OF 3 DAY IN THE APPEAL WHICH WE ARE INCLINED TO CONDONE KEEPING IN VIEW THE LENGTH OF DELAY. ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 3 1.3 HAVING HEARD RIVAL SUBMISSIONS AND AFTER DUE CONSIDERATION OF MATERIAL ON RECORD, OUR ADJUDIC ATION TO THE APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 1.4 THE RELEVANT FACTS ARE THAT THE ASSESSEE RECEIVED AN INTIMATION U/S 200A DATED 07/10 / 2015 FROM TDS, CPC, GHAZIABAD IN RESPECT OF QUARTERLY TD S RETURN IN FORM NO.26Q AS FILED BY THE ASSESSE E FOR Q - 1 O F AY 2008 - 09. AN AGGREGATE DEMAND OF RS.4,22,710/ - WAS RAISED IN THE INTIMATION WHICH INCLUDE FOLLOWING C OMPONENTS: - NO. NA TURE SERIAL NO. AMOUNT (RS.) 1. SHORT DEDUCTION OF T AX 2 RS. 91,770/ - 2. INTEREST ON LATE PAYMENT 3(B) RS.1,18,754/ - 3 . INTEREST ON SHORT DED UCTION / COLLECTION 4(A) RS.93,432/ - 4. INTEREST ON LATE DEDUCTION /COLLECTION 4(B) RS.1,18,754/ - TOTAL 4,22,710/ - THE DEFAULT OF SHORT DEDUC TION ARISES FROM THE FACT THAT THE ASSESSEE PAID CERTAIN SUM TO TWO ENTITIES AND DEDUC TED TAX AT SOURCE @5.61% AS AGAINST CORRECT RATE OF 5.665%. THE IN TEREST COMPONENT IS CONSEQUENTIAL IN NATURE . 1.5 THE ASSESSEE ASSAILED THE INTEREST DEMAND LISTED AT SERIAL NOS. 4(A) & 4(B ) BE FO R E LD. CIT(A) WHEREIN THE ASSESSEE, I NTER - ALIA, RELIED ON THE DECISION OF HONBLE APEX COURT IN HINDUS TAN COCA COLA BEVERAGES PVT. LTD. (293 ITR 226) FOR THE SUBMISSION THAT SINCE THE RECIPIENTS PAID FULL TAX ES BY WAY OF ADVANCE TAX OR SELF - ASSESSMENT TAX , DEPARTMENT COULD NOT RECOVER THE SAME FROM DEDUCTOR ON SAME INCOME BY TREATING THE ASSESSEE AS ASSESSEE - IN - D EFAULT. THE ASSESSEE SUBMITTED THAT THE TWO P AYEE S PAID ADVANCE TAXES BY MARCH, 2008 AND THE TAX WAS FULLY ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 4 PAID BY SEPTEMBER, 2008. IN THE SAID BACKG ROUND, THE ASSESSEE ASSERTED THAT NO INTEREST WAS TO BE CHA RGED U /S 201(1A) OF THE ACT OR AL TERNATIVELY, THE INTEREST SHO ULD BE CHARGE D TILL THE DATE O F PAYMENT OF TAXES BY THE RECIPIENTS IN THE YEAR 2008 . 1.6 THE LD. CIT(A) CONCURRED THAT BEN EFIT WOULD BE AVAILABLE TO THE ASSES SEE . THE CITED DECISION HELD THAT IN TEREST U /S 201(1A) SHALL CONTINUE TILL THE DATE OF TAX PAYMENT BY THE PAYEES. HOWEVER, THE PERIOD SHALL COMMENCE FROM THE DATE ON WHICH THE TAX WAS FIRST DEDUCTIBLE A N D CONCLUDE ON T HE DA TE OF FILING OF RETURN OF INCOME BY THE TWO PAYEES . IN OTHER WORDS, T HE TER MINATING DATE SHALL NOT BE THE DATE OF PAYMENT OF AD VANCE TAX OR SELF - ASSESSMENT TAX AS C ANVASSED BY THE ASSESSEE, THE PANAJ I TRIBUNAL IN STATE BANK OF MYS ORE V. /S ITO (ITA NOS.207 - 210/P AN/2016 DATED 13/02/2017) , HELD THAT INTEREST U/S 201(1A) WAS TO BE CO MPUTED F OR THE P ERIOD FROM THE DATE FROM WHICH TAX WAS DEDUCTIBLE TO THAT DATE OF FILING OF RETURN OF INCOME BY THE DEDUCTEE . THIS IS BECAUSE ONCE ANY AMOUNT IS LIABLE FOR TDS THEN NO INTEREST IS CHARGED FROM DEDUCTEE IN RESPECT OF SUCH INCOME . THERE FORE , TILL SUCH INCOME IS DISCLOSED BY TH E DEDUCTEE IN ITS RETURN, THE LIABILITY OF TAX RESTS ON THE DEDUCTOR . ONCE THE DEDUCTEE FILES TH E RETURN OF INCOME BY INCLUDING SUCH INCOME , TAXES ON THE BASIS OF SUCH RETURN HAS T O BE PAID AND THE CREDIT OF TAXE S G OES TO THE PAYEE. SIMI LAR WAS THE DECISION OF MUMBAI TRIBUNAL IN MAHARASHTRA POLLUTION CONTROL BOARD V/S ITO (ITA NO.902/MUM/20 14 DATED 25/08/2016 ). EVEN OTHERWISE, THE SAID VIEW WAS IN ACCORDANCE WITH THE STATUTORY PROVISIONS OF SEC 201(1A) OF THE A CT. FI NALLY, TDS OFFICER AND THE AS SESSEE WAS DIRECTED TO FOLLOW THE PROCEDURE / DOCU MENTS AS P RESCRIBED AND PROVIDE D IN THE FIRST PROVIS O TO SECTION ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 5 201 (1 ) & 201(1 A) READ WITH RULE 31ACB ALONG WITH NOTIFICATION NO.11/2016 DATED 02/12/2016 OF THE CBDT. THE ASSES SE E WAS DIRECTED TO FILE AFRESH THE REQ UISITE DETAILS / DOC UMENTS TO SHOW THE FULFILMENT OF REQUIREMENT S OF PROVISO TO SEC.201 (1) AND ALLOW RELIEF ONLY WITH RESPECT TO IMPUGNED INTEREST PAYABLE U/S 201 (1A) OF THE ACT. AGGRIE VED, THE ASSESSE E IS IN FURTHER AP PEAL BE FORE US. 2. WE FIND THAT A S PE R THE PROVISIONS OF SEC.201(1) , WHE RE THE ASSESSEE , INTER - ALIA, FAILS TO DED UCT WHOLE OR ANY PART OF THE TAX THEN SUCH PERSONS SHALL BE DEEM E D TO BE AN ASSESSEE - IN - DEFAULT . HOWEVER , AS PER THE FIRST PROVISO , THE ASSES SE E SHALL NOT BE DEEMED TO BE ASSESSEE - IN - DEFAULT IN RESPECT OF SUCH TAX IF THE PAYEE HAS FURNISHED HIS RETURN OF INCOME U/S 139 AND HAS TAKEN INTO ACCOUNT SUCH PAYMENT FOR COMPUTING INCOM E AND HAS PAID TAX DUE ON INCOME DECLARED BY HIM IN SUCH RETURN OF I NC OME . F O R THE SAME, THE PAYEE IS REQUIRED TO FURNISH A PRESCRIBED CERTIFICATE TO THAT EFFECT. THUS, IF THE ASSESSEE COULD DEMONSTRATE THE FULFILMENT OF ALL THE SE REQUIREMENTS, HE COULD NOT BE TREAT ED AS ASSESSE E - I N - DEFA ULT. TO GET THE BENE F IT OF THE PROVI SO , THE ASSESSEE IS DIRECTED TO DEMONSTRATE THE FULFILLMENT OF TH ESE REQUIREMENTS BEFORE LD. TDS OFFICER WH O SHALL CONSIDE R THE SAME. IF THE SAME ARE FOUND IN ORDER , THE ASSESSEE COU LD NOT BE TREATED AS ASSESSEE - IN - DEFAU L T AND THE DEMAND R AISED F OR SHORT D ED UCTION OF TDS SHALL STAND DELET ED . WE ORDER SO. TH E G ROUND THUS RAISED STAND S ALLOWED FOR STAT ISTICAL PURPOSES. 3. THE COMPUTATION OF INTEREST IS GOVERNED BY T HE P ROVISIONS OF SEC.201 (1A) . AS P ER CLAUSE ( I), THE ASSESSEE IS LIABLE TO PAY SIMPLE INTEREST O N SHORT PAYMENT OF T AX FROM THE DATE ON WHICH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH TAX WAS DEDUCTED. CLAUSE (II) PROVID ES ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 6 FOR INTEREST ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH TH E TAX WAS DEDUCTED TO THE DATE ON WHICH THE TAX WAS ACTUALLY PAID . HOWE VER, IT HAS BEEN P ROVIDED TH AT IN CASE THE ASSESSEE IS NOT TREATED AS ASSESSEE - IN - DEF AULT IN TERMS OF FIRST PROVISO TO SUB - SECTIO N (1) THEN INTEREST UNDER C LAUSE ( I ) SHALL BE PAYABLE FROM THE DA TE ON WHICH TAX WAS DEDUCTIBLE TO THE DATE OF FURNISHIN G OF RETU RN OF INCOM E BY THE P AYEE . THE REF ORE, THE STATUTO RY PROVISIONS ARE QUITE CLEAR. THE PAYMENT O F INTEREST SHALL BE MANDATORY AND THE PERIOD SHALL RUN FROM THE DATE ON WHICH TAX WAS PAYABLE TO THE DATE OF F URNISHING OF RE TURN O F INCOME BY THE PAYEE. W E ORDER SO. TO SUMMARIZE, PAYMENT OF INTEREST IS MANDATORY BUT THE SAME MAY BE RE - COMPUTED AT CORRECT RATES AFTER ASCERTAINING THE FACT THAT WHETHER THE ASSESSEE COULD BE TREATED AS ASSESSEE - IN - DE FAULT OR NOT. THE GROUN DS, THUS RAISED, STAND PARTLY ALLO WE D FOR STATISTICAL PURPOSES. 4. THE APPEAL STAND S PARTLY ALLOWED FOR STATISTICAL PURPOSES . O RDER PR ONOUNCED ON 26 TH JULY 2021. SD/ - SD/ - ( MAHAVIR SINGH ) ( MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 26.07.2021 PS, DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE ITA NO. 5895 /MUM/201 7 M/S MOBILE TRADING & INVESTMENT PVT. LTD. ASSESSMENT YEAR: 2008 - 09 7 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MU MBAI .