Income Tax Officer (TDS) Ward-3(2), Bangalore V. Sri annapurneshwari Griha Nirmana Sahakara Sangha Limited , Bangalore

ITA 785/BANG/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0769 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDAPPAJI
• Assessee Lawyers: VANI H
• Keywords: Non-deduction of tax; Tax effect
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO. 7 8 5 /BANG/201 7 ASSESSMENT YEAR S : 20 1 3 - 1 4 AND 2014 - 15 INCOME-TAX OFFICER (TDS), WARD 3(2), NO. 59, 4 TH FLOOR, HMT BHAVAN, BELLARY ROAD, BENGALURU 560 032. VS. SRI. ANNAPURNESHWARI GRIHA NIRMANA SAHAKARA SANGHA LTD., NO. 464, 5 TH MAIN ROAD, 17 TH CROSS, MILK COLONY, 2 ND STAGE, RAJAJINAGAR, BENGALURU 560 055. PAN : AAAJS 4967 N APPELLANT RESPONDENT REVENUE BY : SHRI. SIDDAPPAJI, ADDL. CIT ASSESSEE BY : SMT. VANI H, ADVOCATE DATE OF HEARING : 1 0 . 0 9 .201 8 DATE OF PRONOUNCEMENT : 05 . 10 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), INTER ALIA, ON FOLLOWING GROUNDS: 1. THE ORDER OF CIT(A) IS OPPOSED TO THE FACTS AND NATURE OF THE CASE ON HAND. 2. THE LD. CIT (A) ERRED IN HOLDING THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 194C FROM THE PAYMENTS MADE TO DEVELOPER. 3. THE LD. CIT(A) ERRED IN DELETING THE DEMAND U/S. 201(1) AND 201(1A). 4. THE ID. CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT AS PER THE ASSESSEE'S AGREEMENT WITH THE DEVELOPER THE WORKS TO BE CARRIED OUT LIKE PROCUREMENT LANDS, GETTING APPROPRIATE APPROVAL FROM GOVERNMENT AUTHORITIES, DEVELOPMENT OF LAYOUTS LIKE LEVELLING, CONSTRUCTING DRAINS AND CULVERTS, METTALING AND ASPHALTING ROADS CLEARLY ATTRACTED PROVISIONS OF SECTION 194C. ITA NO. 785/BANG/2017 PAGE 2 OF 3 5. THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE DEVELOPER ARE IN THE NATURE OF COMPOSITE CONTRACTS FOR WORKS FOR WHICH PROVISIONS OF SECTION 194C IS CLEARLY APPLICABLE. 6. THE LD. CIT(A) ERRED IN RELYING ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. KARNATAKA STATE JUDICIAL DEPARTMENT EMPLOYEES HOUSE BUILDING CO-OPERATIVE SOCIETIES IN ITA NO. 1275 OF 2006 AND THE ITAT'S ORDER IN THE CASE OF M/S. KAUTILYA HOUSE BUILDING CO-OPERATIVE SOCIETY LIMITED IN ITA NO. 1324 TO 1337./BANG/2015 DATED 7.4.2016 WHILE ALLOWING THE ASSESSEE'S APPEAL WHICH HAVE BEEN ACCEPTED BY THE DEPARTMENT ONLY FOR LOW TAX EFFECT AND NOT IN PRINCIPLE. 7. THE APPEALS HAVE BEEN FILED FOR ALL THE' ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEARS WHERE THE TAX EFFECT IS BELOW THE PRESCRIBED MINIMUM SINCE A COMPOSITE ORDER HAS BEEN PASSED BY THE CIT(A) AND THEREFORE PARA 5 OF THE CBDT'S CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 IS APPLICABLE IN THIS CASE. FOR THESE AND OTHER GROUNDS THAT MAY BE RAISED DURING THE COURSE OF APPEAL AND ACTUAL HEARING IT IS PRAYED THAT THE ORDER PASSED BY THE AO U/S. 201(1) AND 201(1A) BE UPHELD AND THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND CANCELLED. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE DELETION OF DEMAND RAISED UNDER SECTION 201(1) AND 201(1A) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TAX UNDER SECTION 194C FROM THE PAYMENTS MADE TO THE DEVELOPERS. 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT WHILE ADJUDICATING THE ISSUE, THE CIT(A) HAS FOLLOWED THE ORDERS OF THE TRIBUNAL IN THE CASE OF GROUP D EMPLOYEES WELFARE ASSOCIATION VS. INCOME TAX OFFICER, INCOME TAX OFFICER VS. KAUTILYA HOUSE BUILDING CO-OPERATIVE SOCIETY LTD. THE ORDER OF THE TRIBUNAL IN THE CASE OF GROUP D EMPLOYEES WELFARE ASSOCIATION HAS BEEN APPROVED BY THE JURISDICTIONAL HIGH COURT. THEREFORE, THE IMPUGNED ISSUE INVOLVED IS SQUARED BY THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN FAVOUR OF THE ASSESSEE. 4. THE LEARNED DR PLACED RELIANCE UPON THE ORDER OF THE AO. ITA NO. 785/BANG/2017 PAGE 3 OF 3 5. DURING THE COURSE OF HEARING, THE LEARNED DR CANDIDLY ADMITTED THAT FACTS OF THE INSTANT CASE ARE ALMOST SIMILAR TO THE FACTS IN THE CASE OF GROUP D EMPLOYEES WELFARE ASSOCIATION VS. ITO. 6. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A), WE FIND THAT CIT(A) HAS DECIDED THE ISSUE FOLLOWING THE ORDER OF THE TRIBUNAL IN SIMILAR SET OF FACTS WHICH WAS LATER ON APPROVED BY JURISDICTIONAL HIGH COURT. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A). ACCORDINGLY, WE CONFIRM THE SAME. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF OCTOBER, 2018. SD/- SD/- BANGALORE. DATED: 5 TH OCTOBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ( JASON P BOAZ ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER