Dy.Commissioner of Income Tax (TDS), Kanpur V. Dy. Teneral Manager (Finance), Kanpur

ITA 598/LKW/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83444 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SACHAN
• Keywords: Retrospective amendment; Reasonable cause; Tax effect

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.598 & 599/LKW/2014 A . YRS:2005 - 06 & 2006 - 07 DY. GENERAL MANAGER (FINANCE) TELECOM DISTRICT, BHARAT SANCHAR NIGAM LTD. THE MALL, KANPUR. TAN:KNPB00309B VS DY.C.I.T. (TDS), KANPUR. (RESPONDENT) (APPELLANT) SHRI O. N. PATHAK, D. R. APPELLANT BY SHRI SHAILENDRA SACHAN, ADVOCATE RESPONDENT BY 16/10/2014 DATE OF HEARING 10 /12/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE REVENUE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LEARNED CIT(A) - II, KANPUR BOTH DATED 31/03/2014 FOR THE ASSESSMENT YEAR 2005 - 06 AND 2006 - 07. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE VERY OUTSET , IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE APPEAL OF THE REVENUE FOR ASSES SMENT YEAR 2006 - 07 I.E. I.T.A. NO.599/LKW/ 2014 IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT. HE POINTED OUT THAT AS PER GROUNDS OF APPEAL, IT IS SEEN THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.3,08,420/ - . HE SUBM ITTED THAT NOW , NO APPEAL OF THE REVENUE IS MAINTAINABLE BEFORE THE TRIBUNAL WHERE TAX EFFECT IS BELOW RS.4 LAC. 2 3. REGARDING THE SECOND APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2005 - 06 I.E. I.T.A. NO.598/LKW/2014, HE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF INDORE BENCH OF THE TRIBUNAL IN I.T.A. NO.260 TO 266/IND/2010 DATED 30/05/2011. HE SUBMITTED A COPY OF THE TRIBUNAL DECISION WHICH IS AVAILABLE ON PAGE NO. 3 TO 29 OF THE PAPER BOOK. IN PARTICULAR OUR ATTENTION WAS DRAWN TO PAGE NO. 8 & 9. HE ALSO SUBMITTED THAT THE FACTS ARE SIMILAR AND THEREFORE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION. 4. ON THE OTHER HAND, LEARN ED D.R. OF THE REVENUE SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE DEMAND IN QUESTION WAS RAISED BY THE ASSESSING OFFICER ON THE BASIS OF AMENDMENT TO SECTION 17(2) BY THE FINANCE AC T, 2007 WITH RETROSPECTIVE EFFECT FROM 01/04/2002 AS PER WHICH , THE ASSESSEE WAS MADE LIABLE TO DEDUCT AND PAY HIGHER TAX ON THE PERQUISITES PROVIDED IN THE FORM OF RESIDENTIAL ACCOMMODATION TO ITS EMPLOYEES. AS PER THE TRIBUNAL ORDER CITED BY LEARNED A.R . OF THE ASSESSEE ALSO, THE DEMAND WAS RAISED BY THE ASSESSING OFFICER IN THAT CASE ALSO ON THE BASIS OF SAME AMENDMENT AS PER FINANCE ACT, 2007 AND UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL IN THAT CASE THAT THERE WAS REASONABLE CAUSE FOR NOT DEDUCTI NG TAX AT SOURCE AT THE PARTICULAR POINT OF TIME. THE TRIBUNAL FOLLOWED ANOTHER TRIBUNAL DECISION RENDERED BY NAGPUR BENCH IN THE CASE OF CANARA BANK AND WESTERN COAL FIELD LIMITED REPORTED AT 319 ITR (AT) 63. THE TRIBUNAL HELD THAT THE LIABILITY U/S 201 (1A) WAS FASTENED ON THE ASSESSEE NOT DUE TO ANY FAULT ON THE PART OF THE ASSESSEE BUT BECAUSE OF THE RETROSPECTIVE AMENDMENT IN THE PROVISIONS OF THE ACT AND ON THIS BASIS, IT WAS HELD THAT THE ACTION OF THE LOWER AUTHORITIES FOR TREATING THE 3 ASSESSEE IN DEFAULT U/S 201(1A) IS NOT JUSTIFIED. RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION, WE HOLD THAT IN THE PRESENT CASE ALSO, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE ASSESSEE IN DEFAULT U/S 201(1A) OF THE ACT AND THEREFORE, WE DECLINE TO INT ERFERE IN THE ORDER OF CIT(A). SINCE THE FACTS IN BOTH YEARS ARE IDENTICAL, WE DECIDE BOTH APPEALS ON MERIT INSTEAD OF DISMISSING ONE APPEAL ON THE BASIS OF LOW TAX EFFECT. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE STAND DISMISSED. (ORDER WAS PR ONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 / 12/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1 . THE APPELLANT 2 . THE RESPONDENT. 3 . CONCERNED CIT 4 . THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR