SANTOOR LEAFLIN P.LTD, MUMBAI V. ITO TDS 3(2), MUMBAI

ITA 6613/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0475 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 30-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH CHAMARIA
• Section: 201(1); 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH, MUMBAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO. 6613 / MUM/ 201 4 ( / ASSESSMENT YEAR: 2010 - 11 ) M/S SANTOOR LEAFLIN PVT. LTD., 1118, DALAMAL TOWERS, NARIMAN POINT, MUMBAI - 400021 VS. THE INCOME TAX OFFICER, TDS 3 (2), ROOM NO. 910, K.G. MITTAL BUILDING, CHARNI ROAD, MUMBAI - 4000 02 ./ ./ PAN/GIR NO. : AABCS 0036 L ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RAJESH CHA MARIA (AR) /REVENUE BY : SHRI RAJESH OJHA (DR) / DATE OF HEARING : 30 /05 /2017 / DATE OF PRONOUNCEMENT : 31 /05 /2017 / O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSE E AGAINST ORDER DATED 11/08/2014 PASSED BY THE LD. CIT (A ) - 14 , MUMBAI , PERTAI NIN G TO THE ASSESSMENT YEAR 2010 - 11 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE ITO TDS - 3(2) MUMBAI U/S 2 01(1) R.W.S. 201(1A) OF THE INCOME TAX ACT, 1961 ( FOR SHORT THE ACT) . 2. BRIEF FACTS OF THE CASE ARE THAT ON RECEIVING INFORMATION THAT THE ASSESSEE HAD PAID TRANSACTION CHARGES WITHOUT DEDUCTING THE TAX THEREON AT SOURCE UNDER SECTION 194J OF THE ACT, THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS OF TRANSACTION CHARGES AND TAX DEDUCTED THEREON IF ANY AND IN CASE TAX WAS NOT 2 ITA NO. 6613/MUM/2014 ASSESSMENT YEAR: 2010 - 11 DEDUCTED TO SHOW CAUSE AS TO WHY THE ASSESSEE SHOULD NOT BE TREATED AS ASSESSEE DEEMED TO DEFAULT U/S 201(1) OF THE ACT TO THE E XTENT OF SHORT/NON DEDUCTION/NON - PAYMENT/LATE PAYMENT AND WHY SUCH AMOUNT SHOULD NOT BE RECOVERED WITH INTEREST U/S 201(1A) OF THE I.T. ACT. THE ASSESSEE WAS GIVEN OPPORTUNITY TO ATTEND ON ANY DATE FROM 26.03.2012 TO 30.03.2012. SINCE, THE ASSESSEE OR HIS REPRESENTATIVE DID NOT APPEAR BEFORE THE AO, THE AO FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS. KOTAK SECURITIES LTD. 15 TAXMANN 77 , HELD THE ASSESSEE DEEMED TO BE AN ASSESSEE IN DEFAULT U/S 201 (1) OF THE ACT IN RESPECT OF THE TAX NOT DEDUCTED BY IT ON TRANSACTION CHARGES PAID TO THE NATIONAL STOCK EXCHANGE AND ACCORDINGLY WORKED OUT THE LIABILITY AT RS. 1,37,266/ - . 3. FEELING AGGRIEVED BY THE SAID ORDER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT (A). HOWEVER, THE LD. CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AS THE ASSESSEE DID NOT APPEAR IN RESPONSE TO NOTICE ISSUED BY THE LD. CIT(A) . 4 . STILL A GGRIEVED , THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS: - 1. ON THE FACTS AND IN LAW, THE LEARNED CIT (A) PASSED THE APPEAL ORDER WITHOUT GIVING SUFFICIENT OPPORTUNITY TO PRODUCE THE DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE CLAIM THAT THE TAX WAS PAID BY THE DEDUCTEE. 2. ON THE FACTS AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE DEMAND OF RS. 1,00,931/ - U/S 201(1) FOR NON DEDUCTION OF TDS U/S 194J ON TRANSACTION CHARGES WITHOUT APPRECIATING THE FACT THAT THE TAXES DUE ON THE SAID PAYMENTS WERE PAID BY THE DEDUCT EE I.E. THE NSE. 3 ITA NO. 6613/MUM/2014 ASSESSMENT YEAR: 2010 - 11 3. ON THE FACTS AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING THE LEVYING OF INTEREST U/S 201 (1A) FOR THE PERIOD FROM 01.04.09 TILL 31.03.2012 WITHOUT APPRECIATING THE FACT THAT AS PER THE HON. CBDT CIRCULAR, INTEREST SHOULD BE CHARGE D FOR THE PERIOD FROM THE DUE DATE OF PAYMENT OF TDS TILL DATE OF PAYMENT OF TAXES BY THE DEDUCTEE. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE JUDGMENT OF THE HONBLE SUPREME COURT DELIVE RED IN CIT MUMBAI VS. KOTAK SECURITIES LTD. 383 ITR 1 (SC). THEREFORE, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FAIRLY CONCEDED THAT THE ISSUED IS COVERED BY THE JUDGMENT OF THE HONBLE S UPREME COURT PASSED IN KOTAK SECURITIES (SUPRA). 7. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND ALSO GONE THROUGH THE MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDERS PASSED BY THE AUTHORITIES BELOW. THE FIRST GROUND IS GENERAL IN NATURE HENCE WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE SEPARATELY. THE MAIN ISSUE RAISED VIDE SECOND GROUND OF APPEAL IS THAT WHETHER TDS IS DEDUCTABLE U/S 194J ON TRANSACTION CHARGES PAID TO THE NATIONAL STOCK EXCHANGE BY THE ASSESSEE? WE NOTICE THAT IN KOTAK SECURITIE S (SUPRA) THE HONBLE SUPREME COURT HAS HELD THAT THE VIEW TAKEN BY THE HONBLE BOMBAY HIGH COURT THAT THE TRANSACTIONS CHARGES PAID TO THE BOMBAY S TOCK EXCHANGE BY ITS MEMBERS FOR TECHNICAL SERVICES RENDERED IS NOT AN APPROPRIATE VIEW , S UCH CHARGES, ARE IN THE NATURE OF PAYMENT MADE FOR FACILITIES PROVIDED BY THE STOCK EXCHANGE AND NO TDS ON SUCH PAYMENTS WOULD THEREFORE BE DEDUCTABLE U/S 194J. SINCE, THE ISSUE INVOLVED IS IN THIS CASE IS SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT, WE, SET ASIDE THE 4 ITA NO. 6613/MUM/2014 ASSESSMENT YEAR: 2010 - 11 IMPUGNED ORDER PASSED BY THE LD. CIT (A) AND ALLOW TH IS GROUND OF APPEAL OF THE ASSESSEE . 8. GROUND NO 3 OF THE APPEAL IS CONSEQUENTIAL IN NATURE. SINCE, WE HAVE DECIDED THE SECOND GROUND IN FAVOUR OF THE ASSESSEE, WE DO NOT ADJUDICATE THE SAME . IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 2011 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY , 2017 . SD/ - SD/ - ( RAJENDRA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 0 5 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI