Everest Education Society, Ludhiana V. ITO, TDS, Ludhiana

ITA 688/CHANDI/2022

AI Insights

The case involves Everest Education Society appealing against the order of the CIT(A) which upheld the Assessing Officer's decision treating the assessee in default for failure to deduct TDS under Section 192 of the Income Tax Act, 1961. The primary contention was regarding the inclusion of payments made out of opening balances in addition to salaries for the current financial year, which the assessee argued was incorrect. The CIT(A) had upheld the AO's decision exparte, leading to the current appeal. The Tribunal found procedural impropriety in the handling of the adjournment request by the CIT(A), leading to the setting aside of the case for re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127482 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 14-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 201(1); 250; 192

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 688/CHD/2022 नधा रण वष / Assessment Year : 2019-20 Everest Education Society, Moti Nagar, Ludhiana. बनाम VS The ITO (TDS), Ludhiana. थायी लेखा सं./PAN /TAN No: AAATE3044L अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : None (Adjournment Application) राज व क ओर से/ Revenue by : Smt. Tarundeep Kaur, Sr.DR तार"ख/Date of Hearing : 28.06.2023 उदघोषणा क तार"ख/Date of Pronouncement : 04.07.2023 आदेश/ORDER PER A.D.JAIN, VICE PRESIDENT This is assesse e's appeal for assessment year 2019-20 against the orde r date d 15.09.2022 passed by t he ld. CI T(A ) NFAC, Delhi. Th e follo wing grounds have bee n taken : 1. That the Ld. CIT (A) has wrongly upheld the order of the AO vide which the assessee has been treated in default. 2. That on the facts and the circumstances of the case the Ld. CIT(A) has erred both on the facts and in law in upholding the order of the AO in view of the provisions of Sec 201(1) and 201(1A) read with section 192 of the income tax act ,1961 vide which the assessee has been treated in default for failure to deduct TDS. 3. That the employer was required to consider payment of salary for the current financial year i.e. 2018-19 for the purpose of deduction of tax u/s 192, and not payment made to employees out of the opening balances as on ITA 688/CHD/2022 A.Y.2019-20 Page 2 of 4 1-4-2018. By including payment out of opening balances to the respective employees in addition to salaries for the current F.Yr.2018-19, the Ld. AO has wrongly assumed liability of the employer to deduction tax which is against the provisions of Section 192 of the Act. 4. That the salaries paid to the respective employees for the F.Yr. 2018-2019, do not attract deduction of TDS as per the provisions of Section 192. Hence the order passed by the AO u/s 201(1 A) is bad both on the facts and in law and deserves to be quashed. 5. That the penalty initiated u /s 271H(1 (a) of the Income-tax Act, 1961 is not attracted on the facts of the case as well as in law. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 2. At the time of he aring, no one was present on behalf of the asse ssee . An adjournment application was pla ced on record seeking adjournme nt in the case stating that the written submiss ions alongwith Pape r Book in the case is u nde r preparation. Howe ve r, finding that the matter c an be proce ede d with in the absence of the a ssessee , the adjo urnme nt application was re jected and the case was proce ede d with to be decided on me rits, on hearing the ld. DR. 3. The brie f facts of the case are that the As se ssing Office r vide order date d 10-09-2021 had cre ate d demand on accou nt of TDS deductible u/s 192 a mounting to Rs.2,14,580/- and also on account o f interest charge able u/s 201(1A) amou nting to Rs.64,374/- aggregating Rs .2,78,954/-for the A.Y.2019-2020. 4. The assesse e went in appeal be fore ld. CI T(A) who has upheld t he orde r passed by the AO vide order passed e xparte ITA 688/CHD/2022 A.Y.2019-20 Page 3 of 4 qua the assesse e u/s 250 of the Income-tax Act, 1961, against whic h, the assesse e is in appeal before us. 5. We have heard the ld. DR and have peruse d the mate rial on record. I t is see n that the assesse e had filed an applic ation fo r adjournme nt on 06.07.2022 before the ld. CIT(A), stating there in, that the Counsel of the assesse e was s uffering from viral fever and was not able to attend the office for 4-5 days . The ld. CI T(A ) was, thus, requested to adjourn the ma tte r for atle ast 7 days. The ld. CI T(A ) has re produced this letter at page 4, in para 4.6 of the impu gned order, as follows : “With regards to the appellate proceedings, we hereby humbly submit that the counsel of the appellant is suffering from viral and is not able to attend the office for 4-5 days. Your Honour are therefore, humbly requested to kindly adjourn the proceedings for atleast 7 days and oblige. Inconvenience caused is deeply regretted.” 6. The ld. CI T(A), however, refused to grant adjournment, despite the reque st for adjournme nt be ing on account of the assesse e's Couns el running viral fe ve r. 7. In these facts and circumstance s, in our cons ide red opinion, the matte r needs re-examination by the ld. CI T(A). A ccordingly, in the inte rest o f just ice, the mat ter is set as ide to the file of ld. CI T(A) to re -examine and decide the ma tte r in ac cordance with law after giving the assesse e a reasonable opportu nity of be ing heard. The asse ssee, no doubt, shall cooperate in the fresh proce edings be fore the CI T(A). ITA 688/CHD/2022 A.Y.2019-20 Page 4 of 4 8. In the result , the appe al of the assessee is allowed for statist ical purpose s. Orde r pronounced in the Open Court on 04 t h July,2023. Sd/- Sd/- (VIKRAM SINGH YADAV) (A.D.JAIN ) ACCOUNTANTMEMBER VICE PRESIDENT “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar