Oriental Bank of Commerce, Panchkula V. ITO (TDS), Panchkula

ITA 795/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68542 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: AYUSH GUPTA
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.795 TO 797/CHD/2013 ASSESSMENT YEAR : 2008-09 M/S ORIENTAL BANK OF COMMERCE, VS THE INCOME TAX OF FICER(TDS) SCO 30, PANCHKULA. SECTOR 11, PANCHKULA. PAN : RTKO-00767E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AYUSH GUPTA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 14.10.2013 DATE OF PRONOUNCEMENT : 25.10.2013 O R D E R PER SUSHMA CHOWLA, JM THESE THREE APPEALS BY THE SAME ASSESSEE ARE DIRECT ED AGAINST THE CONSOLIDATED ORDER OF THE CIT(APPEALS) DATED 17.05. 2013 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORDER PASSED UN DER SECTION 201(1)/201(1A) OF THE INCOME-TAX ACT, 1961 ( 'THE A CT' FOR SHORT). 2. IN ALL THE APPEALS, THE ASSESSEE HAS RAISED IDEN TICAL GROUNDS OF APPEAL EXCEPT AMOUNT OF DEMAND. THEREFORE, THE GRO UNDS OF APPEAL AS RAISED BY THE ASSESSEE IN ITA NO. 795/CHD/2013 ARE REPRODUCED HEREUNDER : 1. THAT THE LEARNED CIT (APPEALS), PANCHKULA HAS ERRED IN DISMISSING 3 NO. APPEALS FOR QUARTER 1 ST , 3 RD AND 4 TH IN FORM NO. 26Q BEARING APPEAL NO. 85, 138 AND 139/PKL/11-12 AGAINST THE ORDER OF ITO( TDS), PANCHKULA WHO HAD IMPOSED DEMAND OF RS. 3,19,890/- ,(RS. 1216 80/- IN ITA 796/CHD/2013 & RS. 91,590/- IN ITA 797/CHD/2013) A S THE APPELLANT HAS NOT ACTED DELIBERATELY. 2. THAT THE CIT (APPEALS) HAS FAILED TO PROVE ANY WILL FUL DEFAULT OR MALAFIDE INTENTION ON THE PART OF THE APPELLANT. 2 3. BECAUSE, THE LEARNED CIT (APPEALS) HAS ERRED IN OVE RLOOKING AND IN SUMMARILY REJECTING THE DETAILED STATEMENT OF FACTS SUBMITTED ALONG-WITH MEMORANDUM OF APPEAL, VARIOUS DOCUMENTS AND EVIDENC ES PLACED AND PRODUCED ON VARIOUS DATES OF HEARING OF THE CASE WH ILE ACCEPTING THE LOP-SIDED AND FACTUALLY INCORRECT VERSION OF THE LEARNED ASSE SSING OFFICER. 4. BECAUSE, THE LEARNED LOWER AUTHORITIES HAVE ERRED I N UNDERSTANDING THE SYSTEM OF DEDUCTION OF TAX AT SOURCE IN BANKING COMPANIES AND HAD ALSO FAILED TO PROVE ANY WILLFUL DEFAULT OR MALAFIDE INT ENTION ON THE PART OF THE APPELLANT. 5. BECAUSE, THE LEARNED LOWER AUTHORITIES HAVE FAILED TO CONSIDER THE FACT THAT THERE IS NO SHORT DEDUCTION OF TAX AT SOURCE T AKING INTO CONSIDERATION THE COMPLETE FINANCIAL YEAR 3. THESE THREE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVE NIENCE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED E-TDS QUARTERLY STATEMENTS IN FORM NO. 26Q FOR THE FINANC IAL YEAR UNDER CONSIDERATION. THE ASSESSEE WAS FOUND TO BE AN ASS ESSEE IN DEFAULT IN RESPECT OF SHORT DEDUCTION OF TAX AT SOURCE FOR THE FIRST QUARTER, THIRD QUARTER AND THE FOURTH QUARTER OF FINANCIAL YEAR 20 07-08. THE ASSESSING OFFICER HAS ANNEXED ANNEXURE-A TO THE RES PECTIVE ORDERS PASSED UNDER SECTION 201(1) AND 201(1A) OF THE ACT UNDER WHICH IT HAD TABULATED PARTY-WISE SHORT DEDUCTION OF TAX AT SOUR CE BY THE ASSESSEE DEDUCTOR. THE QUARTERWISE DETAILS OF SHORT DEDUCTI ON AT SOURCE IN FORM NO. 26Q AND THE DEMAND RAISED UNDER SECTION 201(1) OF THE ACT AND THE INTEREST CHARGED UNDER SECTION 201(1A) OF THE A CT ARE AS UNDER : FINANCIAL YEAR DEMAND U/S I NTEREST U/S (2007-08) 201(1) 201(1A) FIRST QUARTER RS. 67,860/- RS. 38,760/- THIRD QUARTER RS. 69,280/- RS. 52,400/- FOURTH QUARTER RS. 66,230/- RS. 25,360/- 5. THE INTEREST CHARGED UNDER SECTION 201(1A) OF TH E ACT IS ON ACCOUNT OF TWO ASPECTS I.E., THE INTEREST DUE ON SH ORT DEDUCTION OF TAX 3 AT SOURCE AND FURTHER ALSO ON ACCOUNT OF INTEREST C HARGED ON LATE PAYMENT OF TAX DEDUCTED AT SOURCE BY THE ASSESSEE. 6. THE PLEA OF THE ASSESSEE BEFORE THE CIT(APPEALS) WAS THAT IN RESPECT OF VARIOUS DEDUCTEES, THERE WAS NO SHORT DE DUCTION OF TAX AT SOURCE WHICH IN-TURN IS EVIDENT BY FORM NO. 16A ISS UED BY THE ASSESSEE TO THE RESPECTIVE PARTIES. THE ASSESSEE, THUS SUBMITTED THAT NO DEMAND UNDER SECTION 201(1) OF THE ACT IS, THUS PAYABLE AND FURTHER NO INTEREST UNDER SECTION 201/1A OF THE ACT IS CHAR GEABLE ON SUCH SHORT DEDUCTION OF TAX AT SOURCE. IN RESPECT OF LA TE PAYMENTS OF THE TAX DEDUCTED AT SOURCE, IT WAS POINTED OUT BY THE A SSESSEE THAT THE SAID TAXES WHICH WERE DUE TO THE TREASURY, WERE DEBITED TO THE RESPECTIVE BANK ACCOUNTS OF THE ASSESSEE WITHIN THE DUE DATE O F DEPOSIT OF TAX AND AS SUCH, NO INTEREST WAS CHARGEABLE. THE CIT(APPEA LS) RECEIVED THE REPORT FROM CPC AND FOUND THAT THE ASSESSEE HAD NOT GIVEN THE FIGURES OF AMOUNT DEDUCTIBLE VIS--VIS TAX DEDUCTED AND THE SAME COULD NOT BE RECONCILED IN ALL THE QUARTERS I.E. QUARTER NO. FIR ST, THIRD AND FOURTH RELATING TO FINANCIAL YEAR 2007-08. THE CIT(APPEAL S) FURTHER NOTED THAT NO CORRECTION STATEMENT WAS FILED BY THE ASSES SEE TO RECTIFY THE ABOVESAID ERRORS. THE CIT(APPEALS), THUS HELD THE ASSESSEE LIABLE FOR SHORT DEDUCTION OF TAX AND UPHELD THE DEMAND RAISED UNDER SECTION 201(1) OF THE ACT AND ALSO THE INTEREST CHARGEABLE UNDER SECTION 201(1A) OF THE ACT. 7. THE LD. AR FOR THE ASSESSEE VEHEMENTLY POINTED O UT THAT COMPLETE DEDUCTION OF TAX AT SOURCE WAS MADE BY THE ASSESSEE AND QUARTER-WISE RECONCILIATION STATEMENT WAS ALSO FILE D BUT THE SAME HAS NOT BEEN CONSIDERED BY EITHER OF THE AUTHORITIES BE LOW BEFORE RAISING THE DEMAND UNDER SECTION 201(1) AND CHARGING INTERE ST UNDER SECTION 201(1A) OF THE ACT. IN RESPECT OF THE INTEREST CHA RGED FOR LATE 4 PAYMENT, IT WAS POINTED OUT THAT THE AMOUNT WAS PAI D WITHIN THE DUE DATE AND THE SAME WAS DEBITED FROM THE ACCOUNT OF T HE ASSESSEE AS EVIDENCED BY THE BANK ENTRIES BUT THE CHALLAN SHOWE D A DATE LATER AND HENCE THE ASSESSEE WAS HELD TO BE IN DEFAULT WHICH IN ACTUAL FACT WAS NO DEFAULT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE DEMAND RAISED UNDER SECTION 201(1) AND INTEREST CHARGED UNDER SEC TION 201(1A) OF THE ACT. THE ASSESSEE HAD FILED QUARTERLY E-TDS STATEM ENT OF RETURNS IN FORM NO. 26Q FOR THE FINANCIAL YEAR 2007-08 AND CER TAIN DISCREPANCIES WERE NOTED BY THE ASSESSING OFFICER IN RELATION TO SHORT DEDUCTION OF TAX AT SOURCE AND CONSEQUENTLY THE INTEREST RELATAB LE TO SUCH SHORT DEDUCTION OF TAX AT SOURCE AND NON-DEPOSIT OF THE S AID SHORT DEDUCTION OF TAX AT SOURCE. FURTHER, THE ASSESSEE WAS ALSO F OUND TO BE IN DEFAULT FOR LATE DEPOSITING OF TAX DEPOSITED AT SOURCE FOR WHICH INTEREST UNDER SECTION 201(1A) OF THE ACT WAS CHARGED. THE ABOVES AID DEFAULT WAS FOUND IN RELATION TO THE FIRST QUARTER, THIRD QUART ER AND FOURTH QUARTER OF FINANCIAL YEAR 2007-08. THE CASE OF THE ASSESSE E WAS THAT IN TOTALITY, IF THE AMOUNT PAID TO THE DEDUCTEES IS CO NSIDERED FOR THE YEAR AND THE TAX DUE TO BE DEDUCTED ON SUCH YEARLY PAYME NTS, THERE IS NO DEFAULT WHICH IN-TURN IS CLEAR FROM THE TDS STATEME NTS FURNISHED TO THE RESPECTIVE DEDUCTEES. IT WAS FURTHER POINTED O UT BY THE LD. AR FOR THE ASSESSEE DURING THE COURSE OF HEARING THAT THE PERUSAL OF THE STATEMENTS WOULD REFLECT THAT INITIALLY AMOUNT OF I NTEREST IS CREDITED TO THE ACCOUNT OF THE DEDUCTEE BUT LATER, CERTAIN DEDU CTIONS ARE ALSO MADE OUT OF THE SAID AMOUNT SO CREDITED BUT IF THE NET A MOUNT IS TAKEN INTO CONSIDERATION, THEN THERE IS NO DEFAULT. OUR ATTEN TION WAS DRAWN TO THE CERTIFICATE IN FORM NO.16A, ISSUED TO M/S HARYANA S TATE INDUSTRIAL & 5 INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., WHEREI N AT SR.NO. 20, THERE IS A CREDIT OF RS. 50,905/- ON 25.06.2007 AND AT SR.NO. 21, THERE IS A DEBIT OF RS. 23,145/- ON 29.06.2007. FURTHER, THERE IS A DEBIT AT SR.NO. 122 OF RS. 172,415/- ON 25.03.2008 AND AT SR .NO. 145 DEBIT OF RS. 43,500/- ON 07.07.2007. SIMILARLY, THERE ARE O THER DEBITS OF RS. 75,504/- OF 07.07.2007 AT SR.NO. 159 AND AT SR.NO. 162 OF RS. 149,491/- ON 05.05.2007. THE ABOVESAID DEBITS RELA TED TO DIFFERENT QUARTERS AND ADMITTEDLY ON THE SAID DEBITS, NO TAX WAS DUE TO BE DEBITED AT SOURCE. THE ASSESSEE CLAIMS THAT IT HAD NOT DEFAULTED IN ANY SHORT DEDUCTION OF TAX AT SOURCE OUT OF THE ACCOUNT OF THE RESPECTIVE DEDUCTEES AND EXPLANATION TO THE EFFECT WAS FILED B EFORE THE ASSESSING OFFICER AND ALSO BEFORE CIT(APPEALS). 9. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES O F THE CASE, WE FIND THAT THE ISSUE RAISED BY THE ASSESSEE HAS NOT BEEN PROPERLY ADJUDICATED BY THE AUTHORITIES BELOW. THE ONUS IS UPON THE ASS ESSEE TO DEDUCT TAX AT SOURCE OUT OF SUCH PAYMENTS TO WHICH THE SAID PR OVISIONS OF THE ACT ARE APPLICABLE. THE SAID TAX IS TO BE DEDUCTED BY THE ASSESSEE QUARTER- WISE RELATING TO DIFFERENT QUARTERS OF THE FINANCIA L YEAR AT THE RATES PRESCRIBED UNDER THE ACT. HOWEVER, THE SAID TAX IS TO BE DEDUCTED OUT OF THE NET PAYMENTS DUE TO THE RESPECTIVE PARTIES A ND WHERE THERE ARE BOTH CREDIT AND DEBIT ENTRIES APPEARING IN THE ACCO UNT OF THE DEDUCTEES, THE LIABILITY TO DEDUCT TAX AT SOURCE IS OUT OF THE NET PAYMENTS DUE TO THE DEDUCTEE FOR THE QUARTER AND NO T OUT OF THE GROSS PAYMENTS DUE TO THE DEDUCTEE. IN THE INTEREST OF J USTICE, WE DEEM IT FIT TO RESTORE THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO RECONSIDER THE SAME IN LINE WITH OUR OBSERVATIONS IN THE PARA HEREIN ABOVE AND DECIDE THE ISSUE AFTER AFFORDING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE RE- CONCILIATION STATEMENT 6 AND ALSO CORRECTION STATEMENT, IF ANY FILED BY IT O N THE SYSTEM IN ORDER TO ESTABLISH ITS CASE OF THE TOTAL NET AMOUNT OF IN TEREST DUE TO THE DEDUCTEE AND THE TAX DEDUCTED THEREON AND PAID BY T HE ASSESSEE FOR THE RESPECTIVE QUARTERS. 10. THE SECOND ISSUE RAISED IN THE PRESENT APPEALS IS IN RELATION TO THE INTEREST CHARGEABLE ON LATE PAYMENT OF THE TAX DEDUCTED AT SOURCE BY THE ASSESSEE, WHICH AS PER THE ASSESSEE WAS DEPO SITED WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT. THE ASSESSING O FFICER, IN THIS RESPECT IS DIRECTED TO VERIFY THE DATE OF PAYMENT A ND IN CASE THE AMOUNT HAS BEEN DEPOSITED BY WAY OF DEBIT TO THE BA NK ACCOUNT OF THE ASSESSEE WITHIN THE STIPULATED PERIOD, THEN THE ASS ESSEE IS NOT TO BE HELD AS A DEFAULTER AND NO INTEREST IS CHARGEABLE U NDER SECTION 201(1A) OF THE ACT. THE ASSESSING OFFICER SHALL VERIFY THE STAND OF THE ASSESSEE IN THIS REGARD AND DECIDE THE ISSUE IN LIN E THEREOF. ACCORDINGLY, THE GROUNDS OF APPEAL RAISED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER,2013. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25 TH OCTOBER, 2013 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR ITAT,CHD.