M/s. State Bank of India SIB Branch, Ghaziabad V. DCIT CPC (TDS), Ghaziabad

ITA 6118/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2771 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 16-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVRAJ SINGH
• Assessee Lawyers: NEERAJ KUMAR SINGH
• Keywords: Non-deduction of tax
• Section: 143(3); 201(1)

Judgement Text

1 ITA NO. 6118/DEL/2015 IN THE INCOME TAX APPELLA TE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 6118/DEL/2 015 (A.Y 2009-10) STATE BANK OF INDIA SIB BRANCH NAVYUG MARKET GHAZIABAD AAACS8577K (APPELLANT) VS DCIT CPC (TDS) CIRCLE-1 FARIDABAD (RESPONDENT) APPELLANT BY SH. NEERAJ KUMAR SINGH, CA RESPONDENT BY SH. SHIV RAJ SINGH, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 19/8/2015 PASSED BY CIT(A)-GHAZIABAD FOR ASSESSMEN T YEAR 2009-10. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- THAT ON THE FACT AND IN THE CIRCUMSTANCES OF THE PE TITIONER BANK'S BRANCH CASE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PASS ORDER U/S 250 OF INCOME TAX ACT, 1961 BEFORE R ECTIFYING THE INTEREST DEMAND OF RS. 1763976/- ON PRINCIPLE AMOUN T,( PRINCIPLE AMOUNT IS ALREADY DELETED BY COMMISSIONER OF INCOME TAX APPEALS IS HIS ORDER). THAT ON THE FACT AND IN THE CIRCUMSTANCES OF THE P ETITIONER BANKS DATE OF HEARING 20.11.2017 DATE OF PRONOUNCEMENT 28.12.2017 2 ITA NO. 6118/DEL/2015 BRANCH CASE. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS WRONG IN CHARGING INTEREST ON SHORT DEDUCTION O F TDS AMOUNTING RS. 1763976/-. (PRINCIPLE AMOUNT IS ALREA DY DELETED BY COMMISSIONER OF INCOME TAX APPEALS IS HIS ORDER). THE ORDER MADE UNDER SECTION 250 IS REQUIRED RECTI FICATION IN RESPECT OF INTEREST AMOUNT RS. 1763976/- 3. DEMAND OF RS. 43,96,900/- WAS RAISED AGAINST THE ASSESSEE BY CPC DUE TO SHORT DEDUCTION OF TDS. SINCE THE DEM AND WAS RAISED BY CPC, NO SEPARATE ORDER U/S 201(1) WAS PAS SED BY THE A.O. THE ASSESSEE CLAIMED BEFORE THE A.O. THAT DUE TO TECHNICAL ERROR, TDS HAD BEEN MADE 10% INSTEAD OF 20% AS REQU IRED BY LAW. THE ASSESSEE'S CONTENTION WAS THAT DEDUCTEE HAD MAD E PAYMENT OF TAXES ON ALL INCOME EARNED BY THEM AND THEREFORE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HI NDUSTAN COCA COLA BEVERAGES PVT. LTD. VS CIT, 293 ITR 226(SC), A ND THEREFORE, THE ASSESSEE COULD NOT BE TREATED AS ASSESSEE IN DE FAULT. OPPORTUNITY WAS PROVIDED TO THE ASSESSEE VIDE LETTE R DATED 27.07.2015 TO FURNISH THE DOCUMENTS BY THE A.O. IN RESPONSE, THE ASSESSEE FILED THE FOLLOWING DOCUMENTS 1. FORM NO. 26Q FOR THE F. Y 2008-09 2. DETAILS OF CHALLANS 3. ITR FILED BY UTTAM SUCROTECH INTERNATIONAL PVT. LTD. 4. ASSESSMENT ORDER PASSED U/S 153(A)/ 143(3) DATED 31.03.2013 FOR THE A.Y 2009-10 OF UTTAM SUCROTECH INTERNATIONA L PVT. LTD. 5. P&L ACCOUNT OF UTTAM SUCROTECH IN TERNATIONAL PVT. LTD. THE ASSESSING OFFICER PASSED ASSESSMENT ORDER ACCOR DINGLY ON 13.09.2014. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) CONSIDERED THE DOCUME NTARY EVIDENCE FILED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) . BUT THE CIT(A) PARTLY 3 ITA NO. 6118/DEL/2015 ALLOWED THE APPEAL OF THE ASSESSEE BY STATING THAT THE LIABILITY OF INTEREST CANNOT BE ABSORBED AND DELETED THE TAX LIABILITY. 5. THE LD. AR FURTHER SUBMITS THAT THE INTEREST LIA BILITY CANNOT ARISE ONCE THE TAX LIABILITY HAS BEEN DECLARED AS NIL LIABILIT Y. THE DECISION OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. VS. CIT(A) 293 ITR 2 26 HON'BLE SUPREME COURT WAS NOT CONSIDERED INTO PROPER CONTEXT BY THE CIT(A ) AS PER THE SUBMISSIONS MADE BY THE LD. AR. THE LD. AR FURTHER SUBMITS THA T THE CIT(A) IN THE ASSESSEES OWN CASE VIDE ORDER DATED 20/1/2015 ALLO WED THE APPEAL OF THE ASSESSEE ON THE SAME GROUND AFTER CONSIDERING HINDU STAN COCA COLA BEVERAGES PVT. LTD. 6. THE LD. DR RELIED UPON THE ORDERS OF THE ASSESSI NG OFFICER AND THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE HONBLE APEX COURT IN CASE OF HINDUSTA N COCA COLA BEVERAGES P. LTD. V. CIT, 293 ITR 226 (SC) HELD THAT THE PAYER I S NOT LIABLE TO PAY THE AMOUNT OF SHORT/NON-DEDUCTION OF TAX U/S.201(L) IN CASES WHERE THE PAYEE HAS ALREADY INCLUDED THE RELEVANT INCOME IN HIS TOTAL I NCOME AND PAID THE TAX. IN SUCH CASES, THE LIABILITY TO PAY INTEREST U/S.201(L A) OF THE ASSESSEE REMAINS AND IT SEEMS THAT SUCH INTEREST IS PAYABLE UP TO THE DA TE ON WHICH THE PAYEE HAS PAID THE RELEVANT AMOUNT OF TAX. IN VIEW OF THE ABO VE SETTLED POSITION WITH REGARD TO THE LIABILITY TO PAY THE AMOUNT OF SHORT/ NON DEDUCTION BY THE PAYER, A SITUATION MAY ARISE IN CASES WHERE THE PAYEE HAS INCLUDED THE RELEVANT AMOUNT OF HIS INCOME IN HIS TOTAL INCOME, BUT THE P AYEE IS NOT LIABLE TO PAY TAX (MAY BE ON ACCOUNT OF LOSSES OR FOR OTHER VALID REA SONS). WHETHER, IN SUCH CASES, PAYER STILL WILL NOT BE LIABLE TO PAY THE AM OUNT OF SHORT/NON-DEDUCTION OF TAX. SUCH LIABILITY SHOULD NOT BE ENFORCED ON THE P AYER IF HE SATISFIES THE AUTHORITY THAT TAXES DUE HAVE BEEN PAID BY THE PAYE E. IF IN SUCH A CASE, THE PAYER IS HELD NOT LIABLE TO PAY THE AMOUNT OF SHORT /NON-DEDUCTION, A FURTHER ISSUE ARISES AS TO WHETHER THE PAYER WILL AT ALL BE LIABLE TO PAY THE INTEREST 4 ITA NO. 6118/DEL/2015 U/S.201(L A), AS THE SAME IS COMPENSATORY IN NATURE AND THERE IS NO LOSS TO THE REVENUE. IN FACT IN ASSESSEES OWN CASE THE CIT(A) VIDE ORDER DATED 20/1/2015 ALLOWED THE APPEAL OF THE ASSESSEE ON THE SAME GROU ND AFTER CONSIDERING HINDUSTAN COCA COLA BEVERAGES PVT. LTD. HOWEVER, IN THE SAID ORDER THE ISSUE RELATING TO THE INTEREST U/S 201(1)/201(A) WAS SET ASIDE TO THE A.O FOR RECALCULATION, THE LD.CIT(A) HELD THAT THE PAYER IS LIABLE TO PAY THE INTEREST ONLY UPTO THE DATE THE PAYEE HAS NOT PAID THE TAX ON THE RELEVANT AMOUNT. THEREFORE, THE ORDER OF THE CIT(A) IS SET ASIDE ON THIS ISSUE AND MATTER IS RESTORED TO THE A.O FOR THIS LIMITED PURPOSE I.E TO WORK OUT THAT THE CALCULATION OF INTEREST IF ANY, IN ACCORDANCE WITH THE RATIO LA ID DOWN IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD VS. CIT(SUPR A). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DECEM BER, 2017 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: /12/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 6118/DEL/2015 DATE 1. DRAFT DICTATED ON 20/11/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 21/11/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29.12.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 9 .12.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.