M/s. Vitt Evam Lekha Adhikari, Muzaffarnagar V. ITO (TDS), Muzaffarnagar

ITA 627/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3655 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 05-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S R SA INAPATI
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 626/DEL /2016 ASSESSMENT YEAR: 2006-07 ITA NO. 627/DEL /2016 ASSESSMENT YEAR: 2007-08 ITA NO. 628/DEL /2016 ASSESSMENT YEAR: 2008-09 ITA NO. 629/DEL /2016 ASSESSMENT YEAR: 2009-10 VITT EVAM LEKHA ADHIKARI, BASIC SHIKSHA PARISHAD, CHAKROTA ROAD, MUZAFFARNAGAR. (PAN: MRTV00574A) VS ITO (TDS), INCOME TAX OFFICE, MUZAFFARNAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI S.R. SA INAPATI, SR. DR DATE OF HEARING: 29.01.2018 DATE OF PRONOUNCEMENT : 31.01.2018 ORDER PER BENCH ALL THESE FOUR APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AND CHALLENGE THE DISMISSAL OF ASSESSEES APPEALS BY THE LD. COMMISSIONER OF INCOME TAX (A), ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 2 MUZAFFARNAGAR. ALL THE FOUR APPEALS ARE IDENTICAL AND HAVE BEEN FILED TAKING A COMMON GROUND THAT THE LD. COMMISSIONER OF INCOME TAX(A) HAD ERRED IN HOLDING THAT THE APPEAL AGAINST THE APPEAL EFFECT ORDER PASSED SUBSEQUENTLY BY THE ASSESSING OFFICER WAS NOT APPEA LABLE U/S 246A OF THE INCOME TAX ACT, 1961 (HEREINAFTER C ALLED 'THE ACT'). 2. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE WHEN THE APPEALS WERE CALLED OUT FOR HEARING. HOWEVER, LOOKI NG INTO THE FACTS OF THE CASE, WE DEEM IT FIT TO HEAR OUT THE APPEALS EX PARTE QUA THE ASSESSEE. 3. BRIEF FACTS OF THE CASES ARE THAT ORDERS U/S 201(1)/201(1A) OF THE ACT WERE PASSED BY THE ASSESS ING OFFICER ON 25.03.2011 FOR ASSESSMENT YEARS 2005-06 TO 2009-10 HOLDING THE ASSESSEE IN DEFAULT FOR FAILURE TO DEDUCT TAX AT SOURCE IN RESPECT OF PAYMENTS MADE FO R SUPPLY OF MID DAY MEAL ETC. TO VARIOUS NGOS AND DIFFERENT AUTHORITIES. THE ASSESSING OFFICER (TDS) PROCEEDED TO HOLD THAT THE ASSESSEE HAD MADE A SHOR T DEDUCTION OF TDS AMOUNTING TO RS. 18.179 CRORES. T HE ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 3 ASSESSEE APPROACHED THE LD. COMMISSIONER OF INCOME TAX (A) WHO, VIDE A CONSOLIDATED ORDER DATED 22.12. 2011, PARTLY ALLOWED THE APPEALS OF THE ASSESSEE AND HELD THAT THE PAYMENTS MADE TO VARIOUS AUTHORITIES SUCH AS GRAM PRADHAN , SABHASAD & TEACHING STAFF DID NOT COME WITHIN THE PURVIEW OF SECTION 194C OF THE ACT AND THAT ONL Y PAYMENTS MADE TO THE VARIOUS NGOS FELL U/S 194C. FURTHER, THE LD. COMMISSIONER OF INCOME TAX (A) ALS O ACCEPTED THE ASSESSEES CONTENTION THAT THE FIGURES OF PAYMENTS IN RESPECT OF THE NGOS, TAKEN BY THE ASSES SING OFFICER IN CRORES, WERE TO BE TAKEN IN LAKHS. SUBSEQUENTLY, THE ASSESSING OFFICER, ON THE DIRECTI ONS OF THE LD. COMMISSIONER OF INCOME TAX(A), COMPUTED THE TOTAL SHORT CHARGE OF TDS FOR THE RELEVANT YEARS AT RS. 3,38,627/- AND PASSED THE CONSEQUENTIAL ORDER. AGA INST THIS CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OF FICER, THE ASSESSEE AGAIN APPROACHED THE LD. COMMISSIONER OF INCOME TAX (A) BY RAISING THE GROUND THAT THE NGOS AGAINST WHOM THERE WAS A SHORT DEDUCTION OF TAX AT SOURCE HAD ALSO FILED THEIR RETURNS OF INCOME AND T HAT FURTHER THEY WERE NOT LIABLE FOR DEDUCTION OF TDS A S THEY ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 4 WERE REGISTERED SOCIETIES/TRUSTS AND NON-PROFIT MAK ING ORGANISATIONS. IT WAS ALSO SUBMITTED BEFORE THE LD . CIT (A) THAT AS PER CBDT CIRCULAR NO. 502 DATED 27.01.1 988, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON EXPE NSES TOWARDS MID DAY MEAL PROGRAMME AS THERE WERE NO CONTRACTORS FOR THE EXECUTION OF WORK UNDERTAKEN UN DER THESE SCHEMES. HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (A) DISMISSED ALL THE FOUR APPEALS OF TH E ASSESSEE WITHOUT ENTERING INTO THE MERITS OF THE AP PEALS BY HOLDING THAT THE APPEALS WERE AGAINST THE APPEAL EFFECT ORDER OF THE ASSESSING OFFICER WHICH WAS NOT APPEALABLE U/S 246A OF THE ACT. NOW, THE ASSESSEE HAS APPROACHED THE ITAT AND HAS CHALLENGED THIS DISMISS AL BY THE LD. COMMISSIONER OF INCOME TAX (A). 4. THE LD. SR. DR SUPPORTED THE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (A) AND SUBMITTED THAT T HE APPEALS HAD BEEN RIGHTLY DISMISSED. 5. WE HAVE HEARD THE LD. SR. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. PARA 4 OF THE ORDER O F THE ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 5 LD. CIT (A) IS IDENTICAL IN ALL THE FOUR APPEALS AN D IT READS AS UNDER:- 4. THE FACTS OF CASE AS WELL AS SUBMISSION MADE BY THE APPELLANT HAVE BEEN CONSIDERED. IT IS OBSERVED THAT IN THIS CASE, THE APPELLANT HAS FILED PRESENT APPEAL AGAINST THE ORDER U/S 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 BY THE A.O. (ITO(TDS), MUZAFFANAGAR WHERE DEMAND OF RS.3,38,627/- WAS CREATED. ON GOING THROUGH THE SEQUENCE OF EVENTS, IT IS NOTED THAT ORIGINAL ORDER U/S 201/201(1 A) OF THE I.T.ACT WAS PASSED BY THE A.O. ON 25.3.2012 FOR THE FINANCIAL YEARS 2005-06 TO 2009-2010 IN RESPECT OF PAYMENTS MADE FOR SUPPLY OF MID DAY MEAL ETC. TO VARIOUS NGOS AND DIFFERENT AUTHORITIES. AGAINST THE SAID ORDER OF THE A.O. THE APPELLANT FILED AN APPEAL BEFORE THE LD, PREDECESSOR WHO VIDE ORDER DATED 22.12.2011 PARTLY ALLOWED APPEAL OF THE APPELLANT BY HOLDING THAT THE PAYMENTS MADE TO VARIOUS AUTHORITIES ARE NOT COVERED U/S 194-C OF THE INCOME TAX ACT WHEREAS PAYMENTS MADE TO VARIOUS NGOS ARE WITHIN DOMAIN U/S 194-C OF THE I.T.ACT. THE A.O. VIDE ORDER DATED 19.3.2004 U/S 251/201/201(1A) OF THE I.T.ACT MADE THE COMPUTATION FOR SHORT DEDUCTION OF TDS ALONG WITH CONSEQUENT INTEREST BY CREATING TOTAL DEMAND PAYABLE BY RS.3,38,627/- AFTER GIVING EFFECT TO THE ORDER OF THE CIT(APPEALS), MUZAFFANAGAR. THEREFORE, THE PRESENT APPEAL IS AGAINST THE APPEAL EFFECT ORDER OF THE A.O. WHICH IS NOT APPEALABLE U/S 246-A OF THE I.T.ACT. ON THE BASIS OF THESE FACTS, THE APPEAL FILED BY THE APPELLANT FOR THE F.YS. 2005-06 TO 2009-2010 IS HELD NOT SUSTAINABLE AND THEREFORE, DISMISSED. 5.1 FROM THE ABOVE, IT IS VERY MUCH OBVIOUS THAT TH E LD. COMMISSIONER OF INCOME TAX (A) HAS DISMISSED THE ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 6 ASSESSEES APPEALS WITHOUT EVEN CONSIDERING THE GRO UNDS RAISED BY THE ASSESSEE. THEREFORE, WITHOUT GOING I NTO THE MERITS OF THE CONTENTIONS RAISED BY THE ASSESSEE, W E ARE OF THE CONSIDERED OPINION THAT THE LD. COMMISSIONER OF INCOME TAX (A) SHOULD HAVE PASSED A SPEAKING ORDER ON THE GROUNDS RAISED BY THE ASSESSEE. ACCORDINGLY, I N THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTORE ALL THE FOUR APPEALS TO THE FILE OF THE LD. COMMISSIONER OF INCO ME TAX (A) WITH THE DIRECTION TO ADJUDICATE THE APPEALS ON MERITS BY PASSING A SPEAKING ORDER. 6. IN THE FINAL RESULT, ALL FOUR APPEALS OF THE ASS ESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2018. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DT. 31 ST JANUARY 2018 GS ITA 626 TO 629/D/2016 AY 2006-07 TO 2009-10 7 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR