DCIT, Jaipur V. RAJASTHAN POLLUTION CONTROL BOARD, Jaipur

ITA 653/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99524 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: P C PARWAL CA DHK
• Section: 194C; 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 653/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2008-09 . DEPUTY COMMISSIONER OF INCOME-TAX, (TDS), JAIPUR. CUKE VS. M/S. RAJASTHAN POLLUTION CONTROL BOARD, INSTITUTIONAL AREA, JHALANA DUNGARI, JAIPUR. L LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR /TAN NO. JPRRO 2749 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19.11.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/11/2015. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. CIT (A)-III, JAIPUR DATED 25.04.2013. THE GROUNDS RAISED IN THE APPEAL ARE AS UNDER :- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN ACCEPTING NEW EVIDENCES WITHOUT ASKING FOR ANY REMAND REPORT FROM THE AO. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO COMPUTE TDS LIABILITY U/S 194J OF THE ACT ON 44.33% OF THE PAYMENT MADE (RS. 39,79,363/-) INSTEAD OF ON FULL PAYMENT. 2 ITA NO. 653/JP/2013 A.Y. 2008-09. DCIT (TDS) VS. RAJASTHAN POLLUTION CONTROL BOARD. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A STATE GOVERNMENT BODY CONSTITUTED UNDER SUB-SECTION 1 OF SECTION 4 OF THE WATER PREVENTION AND CONTROL ACT, 1974. ASSESSEE WORKS HAND IN HAND WITH CENTRAL POLL UTION BOARD CONSTITUTED UNDER SECTION 3 OF THE SAME ACT. THE ASSESSEES PRIMARY F UNCTION IS CHECKING THE POLLUTION ACTIVITIES OF THE INDUSTRIES AND TO REGULATE AND CO NTROL THE POLLUTION LEVELS IN THE ENVIRONMENT BY CONDUCTING SEVERAL TESTS AND EXPERIM ENTS. THE ASSESSEE USED TO CARRY OUT VARIOUS PROJECTS FOR CONSERVATION OF NATURAL AN D WATER RESOURCES. APART FROM CHECK THE AIR POLLUTION, THE ASSESSEE BOARD IS ALSO ENGAG ED IN COLLECTION OF WATER CESS FROM INDUSTRIAL AS WELL AS DOMESTIC. THERE WAS A SURVEY CARRIED OUT ON 24.11.2009 FOR THE PURPOSE OF TDS VERIFICATION. DURING THE COURSE OF V ERIFICATION, CERTAIN ANOMALIES WERE NOTED BY THE SURVEY PARTY. ACCORDINGLY, THE PROCEED INGS U/S 201(1)/201(1A) OF THE ACT WERE INITIATED. IT WAS FOUND DURING THE COURSE OF S URVEY THAT THE ASSESSEE BOARD HAS ENTERED INTO A MOU WITH NATIONAL INFORMATIC CENTRE (IN SHORT NIC) AND NATIONAL INFORMATIC CENTRE SERVICES INCORPORATED (IN SHORT N ICSI). AS PER MOU, THE NIC AND NICSI WAS TO PROCURE SOME EQUIPMENTS ON BEHALF OF T HE ASSESSEE BOARD AS PER ITS REQUIREMENTS AND TO OFFER ITS TECHNICAL SUPPORT SER VICES. IN PURSUANT TO THE MOU, THE ASSESSEE BOARD MADE CERTAIN PAYMENTS TO NICSI FROM TIME TO TIME. ON THESE PAYMENTS, THE ASSESSEE BOARD DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT. HOWEVER, THE AO WAS OF THE VIEW THAT TAX IS DEDUCTIBLE U/S 194J OF THE ACT. ACCORDINGLY WHILE PASSING THE ORDER U/S 201(1) AND 201(1A), THE AO RAISED DEMAND OF TAX. 3 ITA NO. 653/JP/2013 A.Y. 2008-09. DCIT (TDS) VS. RAJASTHAN POLLUTION CONTROL BOARD. 3. ON APPEAL, THE LD. CIT (A) BY REFERRING TO HIS O RDER PASSED FOR A.Y. 2007-08 IN ITA NO. 167/JP/11-12 DATED 17.10.2012 HELD THAT THE CONTRACT WITH NIC WAS A COMPOSITE CONTRACT IN WHICH 44.33% WAS MADE FOR PRO VIDING TECHNICAL SERVICES LIABLE TO TDS UNDER SECTION 194J. THE APPELLANT MADE TOTAL P AYMENT OF RS. 1,39,79,363/- OUT OF WHICH RS. 1,00,00,000/- WAS MADE IN A.Y. 2007-08 AN D BALANCE OF RS. 39,79,363/- WAS MADE IN A.Y. 2008-09. THE ITO TDS WAS DIRECTED TO C OMPUTE TDS LIABILITY UNDER SECT. 194J ON 44.33% OF RS. 39,79,363/-, AS DIRECTED BY L D. CIT (A) IN EARLIER YEAR. HE WAS ALSO DIRECTED 11) SINCE THE NIC HAS FILED ITS RETUR N OF INCOME AND PAID THE TAXES ON THE PAYMENT RECEIVED FROM THE APPELLANT. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. 4.1. THE LD. D/R CONTENDED THAT THE ORDER OF LD. CI T (A) FOR A.Y. 2007-08 WAS CHALLENGED BEFORE THE TRIBUNAL WHO IN ITS ORDER IN ITA NOS. 1 TO 3/JP/2013 FOR A.Y. 2007-08, 09-10 AND 10-11 DATED 23/05/2013 HAS SET A SIDE THE ISSUE FOR LIMITED PURPOSE OF VERIFICATION AND EXAMINATION OF THE BILLS ON THE BASIS OF WHICH THE PAYMENT HAS BEEN BIFURCATED FOR THE PURPOSE OF DEDUCTION OF TAX AS P ER PROVISIONS OF SECTION 194C AND 194J OF THE ACT RESPECTIVELY. THE LD. D/R THEREFOR E, CONTENDED THAT THE ISSUE BE AGAIN SENT BACK TO THE AO TO EXAMINE THE BIFURCATION AND TO VERIFY THAT 44.33% PAYMENT WAS MADE FOR PROVIDING TECHNICAL SERVICES LIABLE FOR TD S U/S 194J. 4.2. THE LD. A/R FOR THE ASSESSEE CONTENDED THAT TH E MOU WITH NIC WAS FOUND IN SURVEY. AS PER THAT MOU WHICH IS AVAILABLE AT PAGES 5-11 OF THE PAPER BOOK, THE TOTAL COST IS STATED AT RS. 1,39,79,363/- AS PER THE DETA ILS GIVEN AT PAGE 11 OF THE PAPER 4 ITA NO. 653/JP/2013 A.Y. 2008-09. DCIT (TDS) VS. RAJASTHAN POLLUTION CONTROL BOARD. BOOK. THE BIFURCATION OF THIS AMOUNT IS GIVEN BY LD . CIT (A) IN HIS ORDER DATED 17.10.2012 FOR A.Y. 2007-08 WHERE RS. 61,96,702/- I S ATTRIBUTED TOWARDS TECHNICAL SERVICES AND THE REMAINING AMOUNT WAS TOWARDS SUPPL Y OF HARDWARE AND SOFTWARE. THE AMOUNT OF RS. 61,96,702/- CONSTITUTED 44.33% OF THE TOTAL COST OF RS. 1,39,79,363/-. THEREFORE, LD. CIT (A) HAS RIGHTLY HELD THAT 44.33% OF THE BALANCE OF RS. 39,79,363/- SHOULD BE MADE LIABLE FOR TDS UNDER SECTION 194J. HE SUBMITTED THAT WHEN ALL THE FACTS ARE AVAILABLE ON RECORD, NO PURPOSE WOULD BE SERVED FOR SENDING THE MATTER AGAIN TO THE AO FOR VERIFICATION. THE LD. A/R REQUESTED TO U PHOLD THE ORDER OF LD. CIT (A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT AS PER THE MOU WITH NIC, THE T OTAL COST FOR SUPPLY OF HARDWARE AND SOFTWARE AND FOR MANAGEMENT TRAINING, WORKSHOP, SYS TEM MODIFICATION IS RS. 1,39,79,363/- AS PER THE DETAILS AVAILABLE AT PAGE 11 OF THE PAPER BOOK. OUT OF IT, RS. 61,96,702/- (RS. 30,00,000 + RS. 5,00,000 + 26,96,7 02/-) IS FOR SYSTEM MODIFICATION, UP-GRADATION, CODING AND IMPLEMENTATION, TRAINING A ND WORKSHOP AND FOR PROJECT MANAGEMENT. THIS CONSTITUTES 44.33% OF THE TOTAL CO ST. THIS AMOUNT HAS BEEN HELD TO BE LIABLE FOR DEDUCTION OF TAX UNDER SECTION 194J A ND THE BALANCE UNDER SECTION 194C. DURING THE YEAR THE APPELLANT HAS MADE PAYMENT OF R S. 39,79,363/-. THEREFORE, THE LD. CIT (A) HAS RIGHTLY HELD THAT 44.33% OF RS. 39,79,3 63/- SHOULD BE LIABLE FOR DEDUCTION OF TAX UNDER SECTION 194J. ALL THESE FACTS ARE ON R ECORD. THE LD. D/R HAS NOT POINTED OUT ANY MISTAKE IN SUCH BIFURCATION. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A) WHICH IS HEREBY CONFIRMED. 5 ITA NO. 653/JP/2013 A.Y. 2008-09. DCIT (TDS) VS. RAJASTHAN POLLUTION CONTROL BOARD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2015. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/11/2015 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE DCIT (TDS), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S. RAJASTHAN POLLUTION CONTROL BO ARD, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 653/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 6 ITA NO. 653/JP/2013 A.Y. 2008-09. DCIT (TDS) VS. RAJASTHAN POLLUTION CONTROL BOARD.