TIRHUT DUGDH UTPADAK SAHKARI SANGH LTD, MUZAFFARPUR V. ITO, TDS, MUZAFFARPUR

ITA 6/PAT/2021

AI Insights

The case involves Tirhut Dugdh Utpadak Sahkari Sangh Ltd., which appealed against the orders of the CIT(A), Jamshedpur, concerning the demand of TDS and interest for the assessment years 2012-13 to 2014-15. The primary legal issue was whether TDS was deductible on payments made to transporters who provided their PAN details, under section 194C(6) of the Income Tax Act, 1961. The assessee argued that TDS was not applicable as per the provisions and a relevant CBDT circular. However, the Assessing Officer and the CIT(A) rejected these submissions without detailed consideration. The Tribunal found merit in the assessee's arguments and allowed the appeals, deleting the TDS demand.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 137005 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-11-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 19-01-2021
• Other Referred Cases: Suo moto Writ Petition (C) No. 3 of 2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA (VIRTUAL HEARING AT KOLKATA) [Before Shri Sanjay Garg, Judicial Member & Shri Rajesh Kumar, Accountant Member] I.T.A. Nos. 06 to 08/Pat/2021 Assessment Years : 2012-13 to 2014-15 Tirhut Dugdh Utpadak Sahkari Sangh Ltd., P.O. Kolhua, Patgamberpur via Kalwari, Muzaffarpur-843108 (PAN: AAAAT0716B) Vs. Income Tax Officer, TDS, Muzaffarpur. Appellant Respondent Date of Hearing 22.11.2022 Date of Pronouncement 23.11.2022 For the Appellant Shri D. V. Pathy, Advocate For the Respondent Shri Rupesh Agrawal, Sr. DR ORDER Per Sanjay Garg, Judicial Member: Captioned appeals have been preferred by the assessee against the separate orders of Ld. CIT(A), Jamshedpur all dated 25.02.2019. 2. At the outset, we note that there is a delay of one year 248 days in filing the present appeals for which application for condonation of delay is placed on record. The impugned orders of Ld. CIT(A) are dated 25.02.2019 the date of service of the order is 17.03.2019 and accordingly the limitation expired on 18.05.2019. The present appeal has been filed on 20.01.2021. It is noted that the period of delay falls during the time of Pandemic of Covid-19 which has been excluded by the Hon’ble Supreme Court in the case of Suo moto Writ Petition (C) No. 3 of 2020 dated 10.01.2022 by which the period from 15.03.2020 to 28.02.2022 has been directed to be excluded for the purpose of limitation. Vide this order a further period of 90 days 2 ITA Nos.06 to 08/Pat/2021 AYs: 2012-13 to 2014-15 Tirhut Dugdh Utpadak Sahkari Sangh Ltd. has been granted for providing the limitation from 01.03.2022. Accordingly, we condone the delay and proceed to adjudicate upon the matter. 3. The common issue involved in all the three appeals is relating to the demand of TDS and interest thereupon u/s. 201(1)/201(1A) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by the AO and further confirmed by the Ld. CIT(A) on account of non-deduction of TDS on the payments made to the transporters. The assessee in this respect relied on the provisions of section 194C(6) of the Act as applicable for the assessment year under consideration which prescribed that no deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum. The assessee also relied on the circular of the CBDT No. 05/2010 dated 3 rd June, 2020 whereby the explanatory notes were issued to the provisions of Finance No. 2 Act, 2009 whereby the Board explained that the Act has been amended to exempt payments to transport operators from the purview of TDS where, the operator furnishes is PAN to the deductor. The assessee, therefore, finally submitted to the AO that the assessee has not deducted TDS for the payments made to the transport contractors who have provided PAN details as the TDS was not deductible on such payments as per the provisions of section 194C(6) of the Act. However, the Ld. AO did not consider the above submissions of the assessee and made the impugned additions by simply holding that the nature of the business of the assessee was to procure milk from different DCS and that the assessee had not deducted the TDS on the payments made to transporters. The Ld. Counsel has also invited our attention to the impugned orders of the Ld. CIT(A) wherein the assessee duly reiterated the above submissions which have also been reproduced in the order of the Ld. CIT(A). However, the Ld. CIT(A) decided the appeal of the assessee with two lines order that he did not find any merit in the grounds of the appeal of the assessee/appellant. We find that both the lower authorities did not apply their mind to the submissions of the 3 ITA Nos.06 to 08/Pat/2021 AYs: 2012-13 to 2014-15 Tirhut Dugdh Utpadak Sahkari Sangh Ltd. assessee and summarily rejected the contentions raised by the assessee without any discussion thereupon. A perusal of the provision of section 194C(6) of the Act as applicable during the assessment year under consideration i.e. AY 2012-13, the assessee was not supposed to deduct TDS for payment made to the transporters on furnishing by them of their PAN details. In view of this, the addition made by the lower authorities is not sustainable in the eyes of law. Therefore, the addition is deleted for all the three assessment years. 4. In the result, all the appeals of the assessee are allowed. Order is pronounced in the open court on 23 rd November, 2022. Sd/- Sd/- (Rajesh Kumar) (Sanjay Garg) Accountant Member Judicial Member Dated: 23 rd November, 2022 JD, Sr. PS Copy of the order forwarded to: 1. Appellant- 2. Respondent – 3. The CIT(A), Jamshedpur 4. CIT 5. DR, Patna Benches, Patna True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata