The ACIT, TDS Circle, RAJKOT-GUJARAT V. M/s. Indian Farmers Fertilizer Co. Operative Ltd., Kandla

ITA 610/RJT/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0483 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201(1)

Judgement Text

I.T.A. NO. 6 10 /RJT/201 2 ASSESSMENT YEAR: 200 8 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM ] I.T.A. NO. 6 10 /RJT/201 2 ASSESSMENT YEAR: 200 8 - 09 ASSISTANT COMMISSIONER OF INCOME TAX, TDS CIRCLE, RAJKOT . .APPELLANT VS. INDIAN FA RMERS FERTILIZER CO - OPERATIVE LTD. .. . RESPONDENT KANDLA UNIT, KANDLA, KUTCH. [PAN AAAAI 0050 M] APPEARANCES BY: PRASOON KABRA FOR THE APPELLANT KALPESH DOSHI FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : OCTOBER 5 , 2015 DATE OF PRONOU NCING THE ORDER : OCTOBER 27 , 2015 O R D E R PER PRAMOD KUMAR : 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICATE IN THIS APPEAL IS WHETHER OR NOT THE LEARNED CIT(A), VIDE HIS IMPUGNED ORDER DATED 6 TH AUGUST 2012, WAS JUSTIFIED IN DELETING THE DEMANDS RAISED ON THE ASSESSEE UNDER SECTION 201(1) AND 201(1A) R.W.S 194 J OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2008 - 09. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE HAD MADE CERTAIN PAYMENTS, O N ACCOUNT OF VARIOUS SERVICES IN THE NATURE OF COMPOSITE INFRASTRUCTURE OF THE PORT WHICH INCLUDES BERTHING, WHARFAGE, MOORING FEE AND STORAGE CHARGES ETC, TO KANDALA PORT TRUST, KANDALA. WHILE THE I.T.A. NO. 6 10 /RJT/201 2 ASSESSMENT YEAR: 200 8 - 09 PAGE 2 OF 3 ASSESSEE DEDUCTED TAX AT SOURCE UNDER SECTION 194 C FROM T HESE PAYMENTS, THE ASSESSING OFFICER WAS OF THE VIEW THAT TAXES SHOULD HAVE BEEN DEDUCTED AT SOURCE UNDER SECTION 194I. IT WAS IN THIS BACKDROP THE ASSESSING OFFICER CONCLUDED THAT THERE WAS A SHORT DEDUCTION OF TAX AT SOURCE. WHILE THE ASSESSING OFFICER A GREED THAT THE DEMAND UNDER SECTION 201(1) COULD NOT BE RAISED AS NO TAXES REMAINED UNPAID BY THE RECIPIENT OF INCOME, DEMANDS UNDER SECTION 201(1A) WERE RAISED IN RESPECT OF DELAYED REALIZATION OF THESE DEMANDS. WHEN THE MATTER FINALLY TRAVELLED IN APPEAL BEFORE THE CIT(A), THE DEMANDS SO RAISED WERE DELETED ON THE SHORT GROUND THE ASSESSEE HAD INFACT CLAIMED REFUND BY FILING RETURN OF INCOME, THERE WAS NO LOSS TO THE REVENUE, AND, ACCORDINGLY, DEMANDS UNDER SECTION 201(1) AND 201(1A) COULD NOT BE LEGALLY RAISED ON THE ASSESSEE. IN COMING TO THIS CONCLUSION, LEARNED CIT(A) PLACED RELIANCE ON HON BLE SUPREME COURT S DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LIMITED VS CIT (293 ITR 266). HOWEVER, THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF S O GRANTED BY THE CIT(A) AND IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 4. WE FIND THAT IT IS NOT IN DISPUTE THAT THER E WAS NO LOSS TO THE REVENUE INASMUCH AS THE RECIPIENT OF INCOME WAS TAX EXEMPT, AND, THE RECIPIENT HAD TO INFACT CLAIM REFUND OF THE TAXES DEDUCTED AT SOURCE, RATHER THAN PAY ANY TAXES, AT THE TIME OF FILING THE INCOME TAX RETURN FOR THE RELEVANT PERIOD. UNDOUBTEDLY, THE LEVY OF SECTION 201(1A) DOES COME INTO PLAY, WHETHER RECIPIENT OF INCOME TAX PAID THE DUE TAXES OR NOT, WHEN THERE IS A DELAY IN REALIZATION OF TAXES. FOR EXAMPLE, WHEN TAXES ARE PAID AT THE POINT OF TIME WHEN INCOME TAX RETURN IS FILED, T HERE IS A DELAY IN I.T.A. NO. 6 10 /RJT/201 2 ASSESSMENT YEAR: 200 8 - 09 PAGE 3 OF 3 REALIZATION OF TAXES FOR THE PERIOD OF TIME BETWEEN THE DATE WHEN THE TAX WAS DEDUCTIBLE TILL THE TIME THE TAXES WERE PAID BY THE RECIPIENT. HOWEVER, WHEN THE ASSESSEE CLAIMS REFUND AT THE TIME OF FILING RETURN, THERE IS NO DELAY IN REAL IZATION OF TAXES INASMUCH AS THESE HAVE BEEN REALIZED BEFORE THE DATE OF FILING THE INCOME TAX RETURN. IN ANY CASE, IN SUCH A SITUATION, IT IS NOT POSSIBLE TO COMPUTE THE PERIOD OF DELAY ON WHICH INTEREST UNDER SECTION 201(1A) CAN BE LEVIED . SUCH BEING TH E ADMITTED FACTS, THERE WAS OBVIOUSLY NO DELAY IN REALIZATION OF THE TAXES, AND, ACCORDINGLY, DEMANDS UNDER SECTION 201(1A) COULD NOT HAVE BEEN RAISED. WE APPROVE THE CONCLUSION ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. IN THIS SCE NARIO, THERE IS NO NEED TO ADDRESS OURSELVES TO THE QUESTION WHETHER THE TAX WAS DEDUCTIBLE UNDER SECTION 194 C OR 194 I. THAT ASPECT OF THE MATTER IS ACADEMIC IN THE PRESENT CONTEXT. 5. IN THE RESULT, THE APPEAL IS DISMISSED. PR ONOUNCED TODAY ON 27 TH D AY OF OCTOBER, 2015 . SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 27 TH DAY OF OCTOBER 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONE R (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT