M/s MEIL-MAYTAS-WPIL(JV), Hyderabad V. ITO, Ward (14) (3), Hyderabad

ITA 66/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61892 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 20-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: K C DEVADAS
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. ASSESSMENT YEAR APPELLANT RESPODNENT 63/HYD/2012 2010-11 M/S. MEIL-SEW-MAYTAS- BHEL(JV), HYDERABAD (PAN AABAM 1587 G) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 64/HYD/2012 2010-11 M/S.HCC- MEIL-NCC- WPIL(JV), HYDERABAD (PAN AAAAH 3848 N) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 65/HYD/2012 2010-11 M/S. KCEL-MEIL(JV) HYDERABAD (PAN AABAC 7129 H) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 66/HYD/2012 2010-11 M/S. MEIL-MAYTAS- WPIL(JV) HYDERABAD (PAN AABAM 1254 A) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 67/HYD/2012 2010-11 M/S. MEIL-KCCPL- FLOWMORE (JV) HYDERABAD (PAN AABAM 1253 H) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 68/HYD/2012 2010-11 M/S. MEIL-IVRCL-HCC- WPIL (JV) HYDERABAD (PAN AABAM 1586 H) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 69/HYD/2012 2010-11 M/S. MEIL-KBL-WEG-(JV) HYDERABAD (PAN AABAM 3374 P) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 70/HYD/2012 2010-11 M/S. MEIL-MAYTAS- KBL(JV) HYDERABAD (PAN AABAM 1251 F) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 2 71/HYD/2012 2010-11 M/S. MEIL-SEW-ABB-AAG (JV), HYDERABAD (PAN AABAM 1586 E) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 72/HYD/2012 2010-11 M/S. MEIL-GAYATRI-ZVS- ITT (JV), HYDERABAD (PAN AABAM 3375 N) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 73/HYD/2012 2010-11 M/S. MEIL-RATNA- KBL(JV), HYDERABAD (PAN AABAM 1252 G) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 74/HYD/2012 2010-11 M/S. MEIL-MAYTAS-ABB- AAG(JV), HYDERABAD (PAN AABAM 1584 F) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 75/HYD/2012 2010-11 M/S. HCC-MEIL-CBE (JV) HYDERABAD (PAN AAAAH 3287 R) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD 76/HYD/2012 2010-11 M/S. MEIL-ZVS-PVSRSN- ITT(JV), HYDERABAD (PAN AABAM 3376 R) INCOME-TAX OFFICER, WARD 14(3), HYDERABAD APPELLANTS BY : SHRI K.C.DEVADAS CA RESPONDENT BY : SHRI V.SRINIVAS, CIT-DR DATE OF HEARING 17.5.2012 DATE OF PRONOUNCEMENT 30.5.2012 O R D E R PER D.KARUNAKARA RAO, ACCOUNTANT MEMBER: THERE ARE FOURTEEN APPEALS IN ALL IN THIS BUNCH. THEY ARE ALL FILED BY THE ASSESSEES AGAINST SEPARATE ORDERS OF T HE COMMISSIONER OF INCOME-TAX(APPEALS)-I, HYDERABAD, IN MOST OF THE CA SES DATED 23.11.2011 AND IN OTHERS DATED 24,11.2011 AND 14.11 .2011 CONFIRMING THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER S. 201(1) AND S.201(1A) ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 3 OF THE ACT, FOR FAILURE ON THE PART OF THE ASSESSEE S TO COMPLY WITH THE PROVISIONS OF S.194C OF THE ACT. SINCE COMMON ISS UES ARE INVOLVED, THESE APPEALS ARE BEING DISPOSED OFF WITH THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE AS TAKEN FROM THE APPEA L ITA NO.63/HYD/2012 CONCERNING M/S. MEIL-SEW-MAYTAS-BHEL (JV), ARE THAT THE ASSESSEE IS A CONSORTIUM HAVING ITS PARTNERS NA MELY, MEGA ENGINEERING AND INFRASTRUCTURES LIMITED, SEW INFRAS TRUCTURE LTD., MAYTAS INFRA LTD & BHEL. THE GOVERNMENT OF ANDHRA PRADESH HAD AWARDED CONTRACT : PRANAHITA CHEVELLA LIFT IRRIGAT ION SCHEME- LINK II-PACKAGE 8 DETAILED INVESTIGATIONS, DESIGN AND EXECUTION OF LIFT IRRIGATION SCHEMES FOR DRAWL AND LIFTING OF 136.24 TMC OF WATER FROM RAGAMPET (V), KARIMNAGAR (D) TO MOTEVAGU RESERVOIR. DURING THE COURSE OF SURVEY CONDUCTED IN THIS CASE ON 13.11.2009, IT WAS FOUND THAT THE ASSESSEE CONSORTIUM HAD RECEIVED AN AMOUNT OF RS.45 .65 CRORES FROM THE GOVERNMENT OF ANDHRA PRADESH FOR THE PERIOD FRO M 1.4.2009 TO13.11.2009. HOWEVER, WHILE REMITTING THE SAID AM OUNT TO THE RESPECTIVE PARTNERS, NO TAX WAS DEDUCTED AT SOURCE. THEREFORE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ABOVE CONSORTIUM ON 1.12.2009 TO SHOW CAUSE WHY THE ASSESSEE SHOULD NOT BE TREATED A S ASSESSEE IN DEFAULT AND THE ASSESSEE WAS ASKED TO FILE REPLY ON OR BEFORE 9.12.2009. SINCE THE ASSESSEE DID NOT FILE ANY REPLY, THE ASSE SSING OFFICER TREATED THE ASSESSEE AS IN DEFAULT AND LEVIED TAX UNDER S.201(1 ) OF THE ACT OF RS.84,43,957 AND CHARGED INTEREST UNDER S.201(1A) O F THE ACT OF RS.6,26,412, VIDE ORDER OF THE ASSESSING OFFICER DA TED 29.1.2010 PASSED UNDER S.201(1) READ WITH S.201(1A) OF THE ACT. 3. ON APPEAL BEFORE THE CIT(A), ASSESSEE RAISED IS SUES OF NON- APPLICABILITY OF TDS PROVISIONS IN THE INSTANT CASE , AND CONSEQUENTLY CONTESTED THE CHARGING OF INTEREST UNDER S.201(1A) OF THE ACT. HOWEVER, ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 4 THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THA T THE ASSESSEE HAD PAID ALL THE TAXES LEVIED UNDER S.201(1) AND HAS S TARTED DEDUCTING TAXES FROM THE PAYMENTS MADE TO JV PARTNERS AND THE JV PA RTNERS HAVE BEEN CLAIMING CREDIT FOR THE TDS MADE EVER SINCE THE SUR VEY UNDER S.133A TOOK PLACE AT ITS PREMISES. IT WAS THEREFORE PLEA DED THAT THE INTEREST UNDER S.201(1A) BE DELETED. THE CIT(A) DID NOT FIN D MERIT IN THE CONTENTIONS OF THE ASSESSEE. HE OBSERVED THAT THE F ACT THAT THE ASSESSEE HAS BEEN DEDUCTING THE TAXES REGULARLY AND THE JV P ARTNERS HAVE BEEN CLAIMING CREDIT FOR THE TDS MADE, SHOWS THAT THE AS SESSEE HAS ADMITTED ITS LIABILITY TO DEDUCT TAX AND ONCE THERE IS LIABI LITY TO DEDUCT TAX, FAILURE TO DO SO WOULD ATTRACT UNDER S.201(1A) OF THE ACT. FU RTHER OBSERVING THAT CHARGING OF INTEREST UNDER S.201(1A) OF THE ACT IS MANDATORY, RELYING ON THE CIRCULAR OF THE CBDT BEING CIRCULAR NO.8 OF 200 9 DATED 24TH NOVEMEBR,2009 (2009)319 ITR(ST) 0022), WHICH ACCORD ING TO HIM IS IN LINE WITH THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES P. LTD. V/S. CIT(2007 ) 293 ITR 0226, CONFIRMED THE INTEREST CHARGED BY THE ASSESSING OFF ICER UNDER S.201(1A) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE US. 5. IN ALL THE REMAINING THIRTEEN CASES IN THUS BUN CH, THOUGH THE ASSESSEES ARE DIFFERENT AND REPRESENT DIFFERENT CON SORTIUM, BUT FOR THE AMOUNTS INVOLVED AND THE WORKS EXECUTED FOR THE GOV ERNMENT, EXCEPT IN ONE CASE IN WHICH WORK WAS EXECUTED FOR ONGC, FACTS ARE SIMILAR AND THE ISSUE INVOLVED IS THE SAME, VIZ. ORDERS PASSED UNDE R S.201(1) AND S.201(1A) OF THE ACT, IN RELATION TO THE PAYMENTS M ADE TO THE ASSESSEES, TO THEIR CONSORTIUM PARTNERS, FROM OUT OF THE AMOUN TS RECEIVED BY THEM FROM THE GOVERNMENT IN CONSIDERATION OF CONTRACT WO RKS EXECUTED BY THEM FOR THE GOVERNMENT, AND IT IS FOR THIS REASON THAT COMMON ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 5 ARGUMENTS HAVE BEEN ADVANCED BY THE LEARNED REPRESE NTATIVES FOR THE PARTIES IN RESPECT OF ALL THESE PARTIES. AS SUCH IT IS NOT NECESSARY FOR US TO BURDEN THIS ORDER WITH DETAILED FACTS IN RELATIO N TO EACH OF THESE APPEALS. 6. EFFECTIVE GROUNDS OF THE ASSESSEES IN ALL THESE APPEALS ARE IDENTICAL EXCEPT OF THE AMOUNT INVOLVED, AND THE SA ME, AS TAKEN FROM ITA NO.63/HYD/2011, READ AS FOLLOWS- 1. THE LEARNED CIT(A) ERRED IN APPRECIATING THE GR OUNDS RAISED BY THE APPELLANT WHERE IT HAS CHALLENGED ITS LIABIL ITY TO DEDUCT TAX AT SOURCE UNDER SECTION 194C AND CONSEQU ENT LEVY OF INTEREST UNDER SECTION 201 AND 201(1A). 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE LEGAL POSITION THAT THE LEVY OF INTEREST UNDER SECTION 20 1(1A) IS LINKED WITH LEVY OF BASIC LIABILITY UNDER SECTION 2 01 WHICH IS THE FIRST ISSUE TO BE ADJUDICATED BEFORE SUSTAININ G ADDITION UNDER SECTION 201(1A). THEREFORE, NON-ADJUDICATION OF THE BASIC ISSUES MAKES HER ORDER INFIRM AND LEGALLY NOT UNSUSTAINABLE. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE SUBMISSIONS OF THE APPELLANT IN THE CORRECT PERSPEC TIVE WHICH BASICALLY QUESTIONED THE LIABILITY UNDER SECT ION 194C READ WITH SECTION 201 BASING ON JUDICIAL PRECEDENTS AND DENIED THE LIABILITY IN TOTO BY CHALLENGING THE ORD ER OF AO. THE LEARNED CIT(A) MISCONSTRUED THE SUBMISSIONS OF THE APPELLANT. 4. THE LEARNED CIT(A) OUGHT NOT HAVE LIMITED THE OR DER MERELY TO LEVY OF INTEREST UNDER SECTION 201(1A), WITHOUT DECIDING THE LIABILITY UNDER SECTION 201 AND THEREFORE THE ENTIRE ORDER IS LIABLE TO BE VACATED AND ADDITIONS SUSTAIN ED TO THE EXTENT OF RS.6,26,412 UNDER SECTION 201(1A) IS LIAB LE TO BE DELETED. 7. DURING THE PROCEEDINGS BEFORE US, THE LEARNED C OUNSEL FOR THE ASSESSEE, EXPLAINED THE FACTS OF THE CASE AND TAKIN G US THROUGH THE JOINT VENTURE AGREEMENT IN ONE OF CASES PLACED AT PAGES 2 6 TO 32 OF THE RELEVANT PAPER-BOOK, LEARNED COUNSEL EXPLAINED THAT THE JV CONSORTIUM WAS MEANT FOR GETTING THE CONTRACTS AND ACCORDINGLY CONTRACT ITSELF WAS RECEIVED AND THE SAME WAS TRANSFERRED TO ONE OF T HE CONSTITUENTS, WHO ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 6 EXECUTED THE CONTRACT WORK IN FULL AND PAID TAXES O N THE INCOME EARNED BY THAT ASSESSEE. ABSENCE OF WRITTEN AGREEMENT TO SUPPORT SUCH TRANSFER OF CONTRACT SHALL NOT BE A DECISIVE AND RELEVANT FA CTOR. LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEES REASONED THAT THE ASSESSEES SHALL NOT BE MADE TO EFFECT TDS ON THE SUM, WHICH IS NOT AN INCO ME TO THE ASSESSEES. THERE IS NO LIABILITY TO MAKE TDS ON THE SAID SUM. FURTHER, ON THE ISSUE OF EXISTENCE OF LIABILITY TO MAKE TDS UNDER S.201(1 ) OF THE ACT, LEARNED COUNSEL ARGUED STATING THAT THE ASSESSEE IS NOT LIA BLE TO MAKE ANY TDS, SINCE, AFTER PROCURING THE CONTRACT, THE IMPUGNED C ONTRACT AND THE AMOUNTS RECEIVED WERE TRANSFERRED ENTIRELY AND UNDI SPUTEDLY TO ITS CONSTITUENT FOR PERFORMANCE. THE SAID CONSTITUENT, I.E. MEIL PAID RELEVANT TAXES ON THE RELATABLE INCOME EARNED OUT OF SUCH CO NTRACTS. THEREFORE, CONSTITUENT IS NOT A SUB-CONTRACTOR AND THE ASSESSE E IS NOT A CONTRACTOR. THE CONSORTIUM WAS CREATED ONLY FOR THE PURPOSE OF PROCURING THE CONTRACT. LEARNED COUNSEL MENTIONED THAT THE ASS ESSEES WERE UNDER DURESS TO MAKE AND DEPOSIT THE TDS WITH GOVERNMENT, ALTHOUGH THE SAME WAS NOT LEGALLY NECESSARY AS THE ASSESSEE IS M EANT FOR PROCURING THE CONTRACT AND NOT FOR EXECUTION AND EARNING OF I NCOME. IN SUCH A CIRCUMSTANCE, THERE IS NO LIABILITY TO MAKE TDS. IN THIS REGARD, LEARNED COUNSEL RELIED ON VARIOUS DECISIONS. FURTHER, REFE RRING TO THE FACT OF EFFECTING TDS UNDER COMPELLING CIRCUMSTANCES, SUBSE QUENT TO TDS- SURVEY, LEARNED COUNSEL MENTIONED THAT SUCH PAYMENT S ARE ABSOLUTELY UNNECESSARY AND THE PAYMENTS THUS MADE UNDER COMPEL LING CIRCUMSTANCES SHOULD NOT ATTRACT FURTHER INTEREST L EVIES UNDER S.201(1A) OF THE ACT. IN THIS REGARD, LEARNED COUNSEL PLACED RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT V/S. VRMP FIRM(56 ITR 57). 8. FURTHER, ON THE EXISTENCE OF TDS LIABILITY ON T HE ASSESSEE, LEARNED COUNSEL ARGUED STATING THAT THE REVENUE DOE S NOT FIX ANY TAX LIABILITY ON THE ASSESSEE IN RESPECT OF THE CONTRAC T SUM SO RECEIVED AND FOR ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 7 THIS PROPOSITION, LEARNED COUNSEL FILED A COPY OF T HE RELEVANT ASSESSMENT ORDER WHICH SHOWED THE ASSESSED INCOME OF THE ASSES SEE FOR THE RELEVANT ASSESSMENT YEAR AT NIL. THUS, HE DENIED ANY TDS L IABILITY ON THE IMPUGNED CONTRACTS, PROCURED AND TRANSFERRED TO MEI L(MEGHA ENGINEERING AND INFRASTRUCTURE LTD.) IN THIS CASE. REFERRING TO PARA 4 OF THE J.V. AGREEMENT DATED 2.4.2008, LEARNED COUNSEL UNDERLINE D THE REQUIREMENT OF SATISFACTORILY COMPLETING THE PROJECTS UNDERTAKE N BY THE CONSTITUENTS. FURTHER, HE UNDERLINED THE RESPONSIBILITY OF EACH J .V. PARTNER IN COMPLETING PROJECT OF ITS SHARE. IN TIMES OF DIFFI CULTIES, WHEN ANY OF THE PARTNER IS NOT IN A POSITION TO DO ITS DUTY/RESPONS IBILITIES, THE J.V. DOES NOT BAR OTHER CONSTITUENTS TAKE UP THE DUTIES AND R ESPONSIBILITIES OF THE SAID CONSTITUENT IN THE INTEREST OF THE IMPUGNED CO NTRACT SO PROCURED BY THE CONSORTIUM. REFERRING TO THE CIT(A)S RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF HINDUSTAN COCA-COLA B EVERAGES P. LTD. V./S. CIT (293 ITR 226), LEARNED COUNSEL MENTIONED THAT T HE SAID JUDGMENT IS INAPPLICABLE TO THE FACTS OF THIS CASE. FURTHER, L EARNED COUNSEL RELIED ON THE JUDGMENTS REPORTED IN BHARAT GENERAL RE-INSURAN CE CO. LTD. (81 ITR 303)-DELHI AND THE DECISION OF THE GUAJARAT HIGH CO URT IN THE CASE OF S.R.KOSHTI V/S. CIT(193 CTR 518)-GUJ. 9. REFERRING TO THE CONCLUSION OF THE CIT(A) THAT WHEN THE TDS IS REGULARLY MADE AS REQUIRED UNDER S.194C, THEN THE LEVY OF INTEREST UNDER S.201(1A) IS MANDATORY, LEARNED COUNSEL VEHEM ENTLY ARGUED STATING THAT THERE IS ESTOPPEL AGAINST LAW. IF A P ARTICULAR INCOME IS NOT CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE, TH ERE IS NO NEED TO MAKE TDS ON THE SAID INCOME BY THE ASSESSEE. IN THIS R EGARD, LEARNED COUNSEL RELIED ON THE DECISION OF APEX COURT IN THE CASE OF CIT V/S. VMRP FIRM (56 ITR 67). PLACING RELIANCE ON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF A.VENAKTARAMAIAH (57 ITR 185), HE SUBMI TTED THAT AN ASSESSEE CANNOT BE TIED DOWN TO A WRONG CONCESSION MADE IN THE RETURN OF IN COURSE OF ASSESSMENT. FINALLY, LEARNED COUN SEL SUMMED UP BY ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 8 STATING THAT THERE IS NO LIABILITY CAST ON THE ASSE SSEE TO MAKE TDS ON THE IMPUGNED CONTRACT SUM AND THEREFORE, THE SUSTAINING OF THE INTEREST LEVIED UNDER S.201(1)(1A) IS UNWARRANTED. 10. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRES ENTATIVE FOR THE REVENUE, BEING CRITICAL OF THE DECISIONS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THEY ARE ALL DISTI NGUISHABLE ON FACTS. HE SUBMITTED THAT THERE ARE NO WRITTEN AGREEMENTS BETW EEN THE ASSESSEE AND ITS CONSTITUENT I.E. MEIL AND THE TERMS AND CON DITIONS ARE NOT CLEAR AND THEREFORE, THESE MATTERS DESERVE TO BE REFERRED BACK TO THE LOWER AUTHORITIES FOR FRESH FINDINGS AND ADJUDICATION. IN THIS REGARD, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE JUDGMENT IN THE CASE OF CIT V/S. EASTERN MEDIKIT LTD. (58 DTR 265) AND MENTIONE D THAT THE ITAT IS NOT A COURT OF FIRST INSTANCE AND IT SHALL NOT DECI DE THE FACTUAL ASPECT ON WHICH THE ASSESSING OFFICER/CIT(A) HAS NOT GIVEN AN Y FINDINGS. FURTHER, HE IS ALSO CRITICAL OF THE ORDER OF THE CIT(A) AND STATED THAT THE CIT(A) DID NOT ADJUDICATE THE ISSUE OF ACTUAL LIABILITY O N THE ASSESSEE IN MATTERS OF EFFECTING TDS ON THE ASSESSEE OR NOT AND MENTION ED THAT THE CIT(A) RESTRICTED THE DECISION TO THE LEVY OF INTEREST UND ER S.201(1A) OF THE ACT ONLY. SHRI SRINIVAS, LEARNED CIT-DR READ OUT THE G ROUNDS RAISED BEFORE THE CIT(A) TO DEMONSTRATE THAT THE SAME WERE NOT AD JUDICATED BY PASSING A SPEAKING ORDER. 11. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL AVAILABLE ON RECORDS . WE HAVE ALSO GONE THROUGH THE RELEVANT PROVISIONS OF THE ACT RELATING TO THE TDS IN GENERAL AND THE PROVISIONS OF S.194C IN PARTICULAR. PROVIS IONS OF SECTION 201(1) OF THE ACT USES THE EXPRESSION ANY PERSON, WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THE ACT.. LEARNED COUNSELS STAND IS THAT THERE IS NO SUCH REQUIREMENT IN THIS CASE. AS PER THE PROVISIONS OF S.194C, AN AMOUNT HAS TO BE DEDUCTED OUT OF THE SUM IN ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 9 PURSUANCE TO A CONTRACT, AT THE TIME OF PAYMENT/CRE DIT TOWARDS INCOME- TAX ON THE INCOME COMPRISED THEREIN IN TERMS OF S.1 94C OF THE ACT. WHEN A PARTICULAR SUM IS NOT INCOME AT ALL FOR AN A SSESSEE, THE REQUIREMENT OF MAKING TDS IS NON-EXISTENT. WHEN C ERTAIN PAYMENTS ARE ROUTED THROUGH THE JVS, WHICH ARE MERELY CREDITED F OR OBTAINING THE CONTRACT, IT HAS TO BE EXAMINED, IF SUCH CONTRACT A MOUNT CONSTITUTES INCOME AT ALL AND CHARGEABLE TO TAX OR NOT IN THE H ANDS OF THE SAID J.V. IS THE ISSUE FOR ADJUDICATION. THIS IS ALSO FACT OF TH E PRESENT CASES WHERE THE CONTRACT AMOUNTS ARE RECEIVED BY THE ASSESSEE-JVS, WHICH WERE TRANSFERRED TO ONE OF THE RESPECTIVE CONSTITUENTS, WHO ACTUALLY EXECUTED THE CONTRACT AND THE INCOME OF THE JV WAS TREATED A S NIL. THE FACTS ARE DISCUSSED IN THE PRECEDING PARAGRAPH. THEREFORE, QU ESTIONS RELATING TO THE LIABILITY OF THE ASSESSEE TO MAKE TDS ON THE SAID C ONTRACT AMOUNT IS RELEVANT ISSUE. PERUSAL OF THE ORDER OF THE CIT(A) REVEALED THAT THE COMMISSIONER(APPEALS) OPINED THE ASSESSEE AS THE ON E REGULARLY MAKING TDS ON THE SAID CONTRACT AMOUNT AND IN FACT, FACT OF THE MATTER IN THESE CASES IS THAT THE ASSESSEES MADE TDS UNDER PROTEST, WHICH IS COMPLETELY IGNORED. ALTHOUGH THE ISSUE WAS RAISED BY THE ASSE SSEE BEFORE THE CIT(A), ON THE ISSUE OF THE LIABILITY TO MAKE TDS , THE COMMISSIONER (APPEALS) HAS NOT GONE INTO THE FACTS AND CIRCUMSTA NCES UNDER WHICH THE ASSESSEE-JV HAD TO MAKE TDS UNDER PROTEST SUBSEQUE NT TO SURVEY. THE CASE OF THE AUTHORISED REPRESENTATIVE BEFORE US, IS THAT DURING THE SURVEY OPERATIONS, THE ASSESSEES WERE UNDER DURESS TO EFFE CT TDS ON THE SAID AMOUNT AGAINST THEIR WILL, AND IT WAS DONE ONLY IN ORDER TO COOPERATE WITH THE DEPARTMENTS DEMAND FOR MAKING TDS AND DEPOSITI NG WITH GOVERNMENT. OTHERWISE, IT IS NOT REQUIRED AND THE ASSESSEE IS NOT IN DEFAULT. THEREFORE, AS PER THE ASSESSEE, SUCH MAKIN G TDS IS UNCALLED FOR. FURTHER IT IS THE ARGUMENT OF THE LEARNED COUNSEL T HAT THERE IS NO ESTOPPEL AGAINST LAW. THE PRINCIPLES OF WAIVER AND ACQUIESCE NCE CANNOT OPERATE AGAINST THE STATUTE. IT IS ALSO THE ARGUMENT OF TH E LEARNED COUNSEL THAT THE ASSESSEE CANNOT BE TIED DOWN TO A WRONG CONCESS ION MADE DURING THE ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 10 SURVEY OPERATION. HE RELIED ON THE JUDGMENTS OF THE APEX COURT IN THIS BEHALF IN THE CASES OF VMRP FIRM (SUPRA) AND VENKAT ARAMAIAH(SUPRA). THE TDS PAYMENTS HAVING BEEN MADE SUBSEQUENT TO THE SURVEY ON THE ADVICE OF SOME PEOPLE BEING EXPERTS IN INCOME-TAX S UBJECT OR BELONGING TO THE DEPARTMENT, ON THOSE AMOUNTS WHICH ARE THEMS ELVES UNNECESSARY, ASSESSEE CANNOT BE ASKED TO PAY FURTHER INTEREST TH EREON. THE REASONING OF THE LEARNED COUNSEL THAT IN SUCH CIRCUMSTANCES, WHERE THERE IS ABSENCE OF LIABILITY TO MAKE TDS, NO INTEREST UNDER S.201(1 A) IS LEVIABLE. THESE ASPECTS OF THE ARGUMENTS OF THE LEARNED COUNSEL WER E NEVER ADJUDICATED BY THE FIRST APPELLATE AUTHORITY. 12. WE HAVE ALSO CONSIDERED THE LEARNED COUNSELS RELIANCE ON PARA 3 AND 4 OF THE IMPUGNED ORDER OF THE CIT(A) FO R THE PROPOSITION THAT THE CIT(A) IN FACT DEALT WITH THE ISSUE OF LIABILI TY TO MAKE TDS AND THEREFORE, THE LEARNED DEPARTMENTAL REPRESENTATIVE S CONTENTION THAT THE CIT(A) FAILED TO ADJUDICATE THE GROUNDS RAISED, MU ST BE DISMISSED. ON PERUSAL OF THE SAID PARAGRAPHS, WE FIND THAT THE CI T(A) MERELY DISMISSED THE ASSESSEES GROUNDS RELYING ON THE ASSESSEES CO MPLIANCE IN EFFECTING TDS. BUT CIT(A) DID NOT DISCUSS THE FACT THAT MADE ASSESSEE TO EFFECT TDS, I.E. EVENTS THAT OCCURRED DURING THE SURVEY OP ERATIONS. IN THE PROCESS, THE FACTORS LEADING TO SUCH COMPLIANCE, WH Y ASSESSEE EFFECTED TDS AND CIRCUMSTANCES THEREOF WERE IGNORED. CIT(A) SHOULD HAVE GIVEN ATTENTION TO THE GROUNDS RAISED BEFORE HIM AND GON E TO THE ROOT OF THE MATTER AS TO WHY THE ASSESSEE IS AGGRIEVED ON THE I SSUE OF THE REQUIREMENT TO DEDUCT TDS AND THE LIABILITY ON THE ASSESSEE ETC. IT IS A FACT THAT THE CONTRACT SUMS WERE TAXED SUBSEQUENTLY IN THE HANDS OF ONE OF THE CONSTITUENTS OF THE ASSESSEE-CONSORTIUMS AND TO AVOID DOUBLE TAX, THE SAID AMOUNTS WERE NEVER TAXED IN THE HANDS OF T HE ASSESSEE- CONSORTIUM. THIS IS A RELEVANT FACT THAT THE CIT(A ) SHOULD HAVE CONSIDERED, WHILE DECIDING AS TO WHY ONE MUST MAKE TDS, WHEN THE JV- ASSESSEES ARE CREATED TO PROCURE A CONTRACT AND NEV ER TO EXECUTE THE ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 11 SAME BY THEMSELVES WITH THE INTENTION TO EARN INCOM E. LTHOUGH AUTHORIZED REPRESENTATIVE ATTEMPTED TO DEMONSTRATE THAT THE CIT(A) HAS IN FACT TOUCHED UPON THE ISSUE RELATING TO HIS LIA BILITY TO MAKE TDS, HE COULD NOT RECONCILE THE SAME WITH THE ISSUES RAISE D IN THE GROUNDS WHEREIN IT IS CONTENDED THAT THE CIT(A) FAILED TO A DJUDICATE UPON THE GROUND RELATING TO THE ISSUE OF ASSESSEES LIABILIT Y TO MAKE TDS. WE CANNOT APPRECIATE THIS DIABOLICAL APPROACH AS THEY ARE AGAINST THE SPIRIT OF THE ISSUES RAISED IN THE GROUNDS BEFORE US. WE GO BY THE ISSUES RAISED BEFORE US AND CONSIDERING THE PAUCITY OF ELABORATE DISCUSSION MADE OUT, THE ARGUMENTS OF THE LEARNED COUNSEL/GROUNDS RAISED BEFORE THE CIT(A), WE ARE OF THE OPINION THAT THE OBJECTION RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ABOUT THE REQUIREMENT O F FRESH ADJUDICATION ON THE SAID ISSUE RELATING TO LIABILITY TO MAKE TDS UNDER S.201(1) OF THE ACT IS REQUIRED TO BE APPROVED. IT IS NOT THE CAS E OF THE ASSESSEES THAT THE ASSESSEES NEVER PROTESTED MAKING THE TDS ON THE CONTRACT AMOUNT. THE CIT(A) SHOULD HAVE EXAMINED THE RELEVANT FACTS AND CIRCUMSTANCES UNDER WHICH, AFTER THE SURVEY ACTION, THE ASSESSEES HAD TO MAKE TDS ON THE IMPUGNED SUM AND SHOULD THE SAME AT ALL BE SUB JECT TO TDS IN THE HANDS OF THE ASSESSEE. CONSIDERING THE ISSUES RAISE D IN THE GROUNDS, WHICH WERE NOT ADJUDICATED PROPERLY BY THE FIRST AP PELLATE AUTHORITY, WE ARE OF THE OPINION THAT ALL THE GROUNDS SHOULD BE R EMANDED BACK TO THE FILES OF THE CIT(A) FOR FRESH ADJUDICATION IN ACCOR DANCE WITH THE PROVISIONS OF S.250(6) OF THE ACT, WHEREBY THE COMMISSIONER (A PPEALS) SHALL STATE THE POINTS FOR DETERMINATION AND THEN THE DECISION S THEREON, GIVING REASONS FOR THE SAME. WE HAVE ALSO PERUSED THE DEC ISION OF THE VISAKHAPATNAM BENCH OF THE TRIBUNAL IN THE CASE OF ITO V/S. UAN RAJU CONSTRUCTIONS (2011) 48 SOT 178(VSPTNM) AND MUMBAI BENCH DECISION OF THE TRIBUNAL IN THE CASE OF SMC CONSTRUCTIONS V/S. ITO(2011)-TIOL-597- ITAT-MUM. RELATING TO TDS MATTERS IN RESPECT OF WO RKS CONTRACTS TRANSFERRED BETWEEN THE JV AND ITS CONSTITUENTS/MEM BERS. THE TRIBUNAL UPHELD THE PROPOSITION THAT THE CONSORTIUM OF JV FO RMED ONLY TO PROCURE ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 12 CONTRACT WORKS AND THAT THE SAID CONTRACT WORK WAS EXECUTED BY THE CONSTITUENT/MEMBER, THERE IS NO MERIT IN PRESUMING THAT THE JV IS A CONTRACTOR AND ITS MEMBERS WERE SUB-CONTRACTORS FOR THE PURPOSE OF APPLYING TDS PROVISIONS AND THE PROVISIONS OF S.40( A)(IA). THE CIT(A) IS DIRECTED TO KEEP IN MIND THE RATIO OF THESE DECISIO NS ALSO, WHILE RE- EXAMINING THESE MATTERS AFRESH. ACCORDINGLY, IMPUGN ED ORDERS OF THE CIT(A) ARE SET ASIDE AND ALL THESE MATTERS ARE REST ORED TO THE FILE OF THE FIRST APPELLATE AUTHORITY FOR FRESH ADJUDICATION ON ALL THE ISSUES INVOLVED IN THE APPEALS BEFORE HIM, IN VIEW OF OUR ABOVE DISCUS SION AND IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEES. 13. IN THE RESULT, ALL THE 14 APPEALS OF THE ASSES SEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 30.5.2012 SD/- SD/- (SAKTIJIT DEY) (D.KARUNAKARA RAO) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 30TH MAY, 2012 COPY FORWARDED TO: 1. M/S. MEIL - SEW - MAYTAS - BHEL(JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 2. M/S. HCC - MEIL - NCC - WPIL (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD HYDERABAD 3. M/S. KCEL - MEIL ( JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 4. M/S. MEIL - MAYTAS - WPIL (JV) S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 5. M/S. MEIL - KCCPL - FLOWMORE (JV) S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 6 . M/S. MEIL - IVRCL - HCC - WPIL (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, ITA NO.63 TO 76/HYD/2012 M/S. MEIL-SEW-MAYTAS-BHEL(JV), HYDERABAD AND THIRTEEN OTHERS 13 BALANAGAR, HYDERABAD 7. M/S. MEIL - KBL - WEG - (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 8. M/S. MEIL - MAYTAS - KBL (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 9. M/S. MEIL - SEW - ABB - AAG (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 10. M/S. MEIL - GAYATRI - ZVS - ITT (JV) , S - 2 TECHNOCRAT INDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 11. M/S. MEIL-RATNA-KBL(JV), S-2 TECHNOCRAT INDUSTR IAL ESTATES, BALANAGAR, HYDERABAD 12. M/S. MEIL-MAYTAS-ABB-AAG(JV), S-2 TECHNOCRAT IN DUSTRIAL ESTATES, BALANAGAR, HYDERABAD 13. M/S. HCC-MEIL-CBE (JV), S-2 TECHNOCRAT INDUSTRI AL ESTATES, BALANAGAR, HYDERABAD 14. M/S. MEIL-ZVS-PVSRSN-ITT(JV), S-2 TECHNOCRAT I NDUSTRIAL ESTATES, BALANAGAR, HYDERABAD 15. INCOME-TAX OFFICER, WARD-14(3), HYDERABAD 16. COMMISSIONER OF INCOME-TAX(APPEALS) II, HYDERA BAD 17. COMMISSIONER OF INCOME-TAX I, HYDERABAD 18. DR, ITAT, HYDERABAD B.V.S.