ACIT, New Delhi V. M/s. Indian Express Newspapers Mumbai Ltd., Noida

ITA 665/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61796 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 24-07-2012
• Assessment Year: misc
• Appeal Filed On: 04-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Keywords: Audit objection; Tax effect
• Section: 201(1)

Judgement Text

I.T.A. NOS. 665 & 666/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 665 & 666/DEL/2011 F.YRS. : 2005-06 & 2006-07 ACIT, CIRCLE 50(1), R.NO. 503, 5 TH FLOOR, AAYKAR BHAVAN, LAXMI NAGAR, DELHI VS. M/S INDIAN EXPRESS NEWSPAPERS MUMBAI LIMITED, (PRESENTLY KNOWN AS THE INDIAN EXPRESS NEWSPAPER), A-8, SECTOR-7, NOIDA (UP) (PAN/GIR NO. : AACCT1148F) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. K.V.S.R. KRISHNA, CA DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. ORDER ORDER ORDER ORDER THESES APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXX, NEW DELHI DATED 16.11.2010 AND PERTAIN TO FINANCIAL YEARS 2005-06 & 2006-07. 2. THE GROUNDS RAISED IN THE I.T.A. NO. 665/DEL/ 2011 READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS IN LAW, THE LD. COMMISSIONER OF INCOME TAX (A) HA S ERRED IN I) HOLDING THAT THERE IS NO LIABILITY FOR DEDUCTION OF TAX AT SOURCE AND AS THE DEDUCTEE ASSESSEE IS EXEMPTED FROM TAX, THERE CANNOT BE ANY LIABILITY OF INTEREST U/S. I.T.A. NOS. 665 & 666/DEL/2011 2 201(A). THE INTEREST CANNOT BE COMPUTED ON ZERO PRINCIPAL. II) NOT FOLLOWING THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES PVT. LTD. VS. C.I.T. IN (2007) 293 ITR (SC) WHEREIN IT IS HEL D THAT NO DEMAND VISUALIZE U/S. 201(1) SHOULD BE ENFORCED AFTER THE DEDUCTOR HAS SATISFIED THE TDS OFFICER IN CHARGE OF TDS THAT TAXES HAVE BEEN PAID BY THE DEDUCTEE ASSESSEE. HOWEVER, THIS WILL NOT ALTER TH E LIABILITY TO CHARGE INTEREST U/S. 201(1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE ASSESSEE OR THE LIABILITY FOR PENALTY U/S. 201(1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE ASSESSEE OR THE LIABILITY FOR PENALTY U/S. 271(1)(C) OF THE I.T. A CT. III) THOUGH THE REVENUE EFFECT IS ` 1,42,150/- ONLY WHI CH IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE BOARD, SINCE THE LEGAL ISSUE IS INVOLVED IN THIS CA SE, APPEAL TO THE ITAT IS BEING FILED IN VIEW OF THE CL AUSE (A) OF PARA 8 OF THE BOARD INSTRUCTION NO. 05/2008 DATED 15.5.2008. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. THE GROUNDS RAISED IN THE I.T.A. NO. 666/DEL/20 11 READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS IN LAW, THE LD. COMMISSIONER OF INCOME TAX (A) HA S ERRED IN I.T.A. NOS. 665 & 666/DEL/2011 3 I) HOLDING THAT THERE IS NO LIABILITY FOR DEDUCTION OF TAX AT SOURCE AND AS THE DEDUCTEE ASSESSEE IS EXEMPTED FROM TAX, THERE CANNOT BE ANY LIABILITY OF INTEREST U/S. 201(A). THE INTEREST CANNOT BE COMPUTED ON ZERO PRINCIPAL. II) NOT FOLLOWING THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES PVT. LTD. VS. C.I.T. IN (2007) 293 ITR (SC) WHEREIN IT IS HEL D THAT NO DEMAND VISUALIZE U/S. 201(1) SHOULD BE ENFORCED AFTER THE DEDUCTOR HAS SATISFIED THE TDS OFFICER IN CHARGE OF TDS THAT TAXES HAVE BEEN PAID BY THE DEDUCTEE ASSESSEE. HOWEVER, THIS WILL NOT ALTER TH E LIABILITY TO CHARGE INTEREST U/S. 201(1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE ASSESSEE OR THE LIABILITY FOR PENALTY U/S. 201(1A) TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE ASSESSEE OR THE LIABILITY FOR PENALTY U/S. 271(1)(C) OF THE I.T. A CT. III) THOUGH THE REVENUE EFFECT IS ` 1,42,150/- ONLY WHI CH IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE BOARD, SINCE THE LEGAL ISSUE IS INVOLVED IN THIS CA SE, APPEAL TO THE ITAT IS BEING FILED IN VIEW OF THE CL AUSE (A) OF PARA 8 OF THE BOARD INSTRUCTION NO. 05/2008 DATED 15.5.2008. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. AT THE THRESHOLD, WE NOTE THAT TAX EFFECT IN THESE CA SES ARE LESS THAN ` 3 LACS FIXED BY THE CBDT FOR FILING APPEAL BEFORE THE TRIBUNAL. AS PER I.T.A. NOS. 665 & 666/DEL/2011 4 INSTRUCTION NO. 3/2011 (F.NO. 279/MISC./142/2007-ITJ) DATED 09.02.2011 ISSUED BY THE CBDT, THE TAX EFFECT FOR FILING APPEAL BEFORE THE APPELLATE TRIBUNAL SHOULD BE MORE THAN ` 3 LAKHS. THE AFORESAID INSTRUCTIONS HAVE BEEN HELD TO BE APPLICABLE TO ALL PENDING APPEALS BY THE HONBLE DELHI HIGH COURT IN THE DECISIONS IN THE CASES:- (I) C.I.T. VS. M/S P.S. JAIN & CO. IN ITA NO. 179/199 1, ORDER DATED 2 ND AUGUST, 2010. (II) C.I.T. VS. DELHI RACE CLUB IN ITA NO. 128/2008, ORDER DATED 3 RD MARCH, 2011. 4.1 I FURTHER FIND THAT CLAUSE (A) OF PARA 8 OF THE BOARD INSTRUCTION NO. 5/ 2008 DATED 15.5.2008 PROVIDES THE FOLLOWING: 8. ADVERSE JUDGEMENTS RELATING TO THE FOLLOWING SHOUL D BE CONTESTED IRRESPECTIVE OF THE TAX EFFECT. (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE ARE UNDER CHALLENGE. (B) WHERE BOARDS ORDER, NOTIFICATION, INSTRUCTION OR CI RCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRUS. (C) WHERE REVENUE AUDIT OBJECTION IN THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT. 4.2 A READING OF THE ABOVE SIGNIFIES THAT GROUND NO. (III) TAKEN IN REVENUE APPEALS ARE NOT SUSTAINABLE. I.T.A. NOS. 665 & 666/DEL/2011 5 5. IN THE PRESENT CASES, ADMITTEDLY THE TAX IS BELOW ` 3 LAKHS. HENCE, THE APPEALS ARE IN CONTRAVENTION OF THE AFORESAID CBDT CIRCULAR/INSTRUCTION. HENCE, THE SAME ARE LIABLE TO BE DISMISSED. ACCORDINGLY, THESE APPEALS BY THE REVENUE STAND DISMISSE D FOR TAX EFFECT. 6. IN THE RESULT, BOTH THE REVENUE APPEALS STAND DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 26/7/2012. SD/- [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 26/7/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5.DR, I TAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES