Fortis Hospitals Ltd., Noida V. ACIT (TDS), Noida

ITA 6256/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2780 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; TDS
• Section: 133A; 201; 251; 194J

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.6256/DEL/2016 ASSESSMENT YEAR : 2015-16 FORTIS HOSPITALS LTD., B-22, SECTOR-62, NOIDA. VS. ACIT (TDS), NOIDA. PAN : AABCF3718N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. M. MEHTA, CA DEPARTMENT BY : SHRI ATIQ AHMAD, SR.DR DATE OF HEARING : 28-12-2017 DATE OF PRONOUNCEMENT : 28-12-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.09.2016 OF THE CIT(A)-I, NOIDA RELATING TO ASSES SMENT YEAR 2015-16. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING HEALTHCARE SERVICES AND RUNNI NG A MULTI-SPECIALITY HOSPITAL. A SURVEY U/S 133A WAS CONDUCTED IN THE B USINESS PREMISES OF THE ASSESSEE ON 18.11.2015. DURING THE SAID SURVEY, IT WAS FOUND THAT THE ASSESSEE HAS MADE PAYMENTS TO THE TUNE OF RS.22,03,75,847/- AS BT FEES TOWARDS THE SERVICE FEE OF Q-4 OF FINANCIAL YEAR 2013-14 AND AD VANCE BASE FEE FOR Q-1 OF FINANCIAL YEAR 2014-15 AND EXAMINATION OF THESE EXP ENSES REVEALED THAT THE 2 ITA NO.6256/DEL/2016 SAME ARE IN THE NATURE OF TECHNICAL CONSULTANCY FEE PAID TO M/S INTERNATIONAL HOSPITAL LTD. AND ARE COVERED U/S 194J OF THE I.T. ACT. HOWEVER, THERE WAS NO DEDUCTION OF TAX FROM THE SAID PAYMENTS AS REQUIRED U/S 194J. THE ASSESSING OFFICER, THEREFORE, CONFRONTED THE SAME TO THE ASSE SSEE. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING O FFICER HELD THE ASSESSEE AS ASSESSEE IN DEFAULT U/S 201(1)/201(1A) AND DETERMIN ED THE LIABILITY AT RS.1,04,57,880/- TOWARDS SHORT DEDUCTION OF TAX AND INTEREST PAYABLE. 3. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT THE PAYMENTS WERE MADE BY THE ASSESSEE TO THE SISTER CONCERN AND THE SISTER C ONCERN HAS FILED ITS RETURN OF INCOME AND HAS PAID TAX ON THE PROFESSIONAL FEE REC EIVED FROM THE ASSESSEE COMPANY. IT WAS ACCORDINGLY ARGUED THAT THE CASE O F THE ASSESSEE IS COVERED UNDER THE PROVISO TO SECTION 201 OF THE I.T. ACT. 3.1 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE , LD. CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF PROVISO TO SECTION 201 AND ACCORDINGLY DIRECTED THE ASSESSEE TO APPROACH THE ASSESSING OFF ICER FOR DOING THE NEEDFUL. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THAT THE IMPUGNED ORDER DATED 25.01.2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - I - NOIDA IS BAD IN LAW AND WRONG ON FACTS. 2. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITIO N OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - I - NOIDA HAS ERRED IN LAW IN UPHOLDING THE FINDING OF THE AO THA T NO TDS WAS DEDUCTED ON AN AMOUNT OF RS.8,71,49,007/- WITHOUT E XAMINING PROPERLY THE ACCOUNTING ENTRIES APPEARING IN THE LE DGER ACCOUNT DULY PLACED BEFORE HIM. 3 ITA NO.6256/DEL/2016 3. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITIO N OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX' (APPEALS) - I - NOIDA HAS ERRED IN UPHOLDING THAT THE APPELLANT COMPANY HAD N OT DEDUCTED TAX FROM PAYMENT MADE TO INTERNATIONAL HOSPITAL LIM ITED, WHEREAS ON FACTS AND CIRCUMSTANCES OF THE CASE AND BASED ON EVIDENCE PRODUCED BEFORE HIM, IT WAS CLEAR THAT THE APPELLAN T COMPANY HAD DEDUCTED TAX FROM THE ALLEGED AMOUNT. 4. THE APPELLANT RESERVES TO ITSELF, THE RIGHT TO ADD , ALTER, AMEND, SUBSTITUTE, WITHDRAW AND/ OR ANY GROUND(S) OF APPEA L AT OR BEFORE THE DATE OF HEARING. 5. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED A COPY OF THE ORDER PASSED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) WHEREIN HE HAS DELETED THE TAX PORTION BUT HAS LEVIED INTEREST OF RS.16,55,831/- U/S 201(1A) OF THE I.T. ACT. REFERRING TO PAGE 3 OF THE PAPER BOOK, HE SUBMITTED THAT AN AMOUNT OF RS.8,80,06,659/- BEING THE PAYMENT TOWAR DS Q-1 OF FINANCIAL YEAR 2014-15 HAS BEEN PAID ON 26.05.2014 AND TDS OF RS.9 9,61,851/- HAD BEEN DEDUCTED FROM THE SAME. REFERRING TO PAGE 4-5 OF T HE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE CHALLAN EVIDENCING TH E PAYMENT OF THE SAME. HE SUBMITTED THAT SINCE THE PAYMENT HAS ALREADY BEEN M ADE BEFORE THE DUE DATE, THEREFORE, THE INTEREST LEVIED BY THE ASSESSING OFF ICER U/S 201(1A) HAS TO BE DELETED. 6. LD. DR ON THE OTHER HAND WHILE SUPPORTING THE OR DER OF THE LD. CIT(A) SUBMITTED THAT THIS MATTER SHOULD BE RESTORED TO TH E FILE OF THE ASSESSING OFFICER FOR VERIFICATION. 7. AFTER HEARING BOTH THE SIDES, WE FIND OUT OF THE TOTAL DEMAND OF RS.1,04,57,880/-, THE ASSESSING OFFICER IN THE ORDE R PASSED U/S 251 HAS ALREADY 4 ITA NO.6256/DEL/2016 DELETED THE TAX PORTION AMOUNTING TO RS.87,14,900/- LEVIED U/S 201(1). THEREFORE, WHAT SURVIVES IS THE INTEREST U/S 201(1A ) AMOUNTING TO RS.16,55,831/-. IT IS THE SUBMISSION OF THE LD. CO UNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAD MADE PAYMENT OF RS.8,80,06,659/- ON 26 .05.2014 ON WHICH TDS OF RS.99,61,851/- IS PAYABLE AND THE SAME HAS BEEN PAID ON 06 TH JUNE, 2014 AND HAS IN-FACT EXCESS PAYMENT OF RS.1,83,333/- HAS BEE N MADE AND, THEREFORE, THERE IS NO QUESTION OF ANY LIABILITY U/S 201(1A) OF THE I.T. ACT. HOWEVER, IN OUR OPINION, THE SAME NEEDS VERIFICATION AT THE LEVEL O F THE ASSESSING OFFICER. WE THEREFORE DEEM IT PROPER TO RESTORE THE ISSUE TO TH E FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO GRANT AN OPPORTUNITY TO THE A SSESSEE TO FILE NECESSARY DETAILS BEFORE HIM. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME HEA RING ITSELF I.E. ON THIS 28 TH DAY OF DECEMBER, 2017. SD/- SD/- (SUCHITRA KAMBLE) (R. K. P ANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28-12-2017. SUJEET 5 ITA NO.6256/DEL/2016 COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI