Appeal details
Counselvise Citation
[2013] 140 COUNSELVISE.COM (IT) 68675 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-08-2013
Appeal Filed By
Assessee
Bench Allotted
B
Next Hearing Date
06-08-2013
Assessment Year
2009-2010
Appeal Filed On
18-01-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 81/MDS/2013 ASSESSMENT YEAR 2009-10 CELLULAR MOBILE TELECOM SERVICES NET WORK OPERATIONS CM (WING OF BSNL), AMENITY BLOCK, I FLOOR, NEW CTO COMPOUND, TRICHY-620 001. [TAN : CHEB05105C] (APPELLANT) VS. INCOME TAX OFFICER, TDS WARD-I, 44 WILLIAMS ROAD, TRICHY 620 001. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI RAJIB KUMAR HOTA, CIT DATE OF HEARING : 06-08-2013 DATE OF PRONOUNCEMENT : 26-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASS ESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-T IRUCHIRAPALLI, DATED 19-10-2012 PASSED U/S. 201(1) AND 201(1A) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) R ELEVANT TO THE ASSESSMENT YEAR (AY) 2009-10. I.T.A. NO. 81/MDS/2013 2 2. THE ASSESSEE IS A GOVT. COMPANY AND IS PROVI DING TELEPHONY SERVICES BOTH MOBILE AND FIXED LINE. FOR MOBILE TE LEPHONE SERVICES UNDER THE NAME CELLONE, THE ASSESSEE IS SELLING SIM CARDS AND RE- CHARGE COUPONS FOR POST PAID MOBILE CONNECTIONS TO VARIOUS WHOLE- SALE DEALERS. THE ASSESSEE PAYS COMMISSION TO THE DEALERS ON THE SALE OF SIM CARDS AND RE-CHARGE COUPONS. UPTO FINA NCIAL YEAR (FY) 2007-08, RELEVANT TO THE AY. 2008-09 THE ASSESSEE W AS DEDUCTING TAX AT SOURCE ON THE PAYMENT OF COMMISSION UNDER THE PR OVISIONS OF SECTION 194H OF THE ACT. FROM THE AY. 2009-10 ONWA RDS, THE ASSESSEE STARTED TREATING THE COMMISSION AS DISCOUN T AND THUS STOPPED DEDUCTING TAX ON SOURCE. SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE U/S. 201(1) & 201(1A) OF THE ACT CALLI NG FOR EXPLANATION FOR FAILURE TO DEDUCT TAX AT SOURCE UNDER THE PROVI SIONS OF SECTION 194H. IN RESPONSE TO THE NOTICE, THE ASSESSEE STAT ED THAT THE SALES AND DISTRIBUTION POLICY 2006 OF BSNL WAS AMENDED IN 2007 TO CONFER THE STATUS OF AGENTS TO ITS DISTRIBUTORS WHO DEAL I N POST-PAID TELEPHONE/MOBILE CONNECTIONS AND TREAT THE TRANSACT IONS WITH THE FRANCHISE/DEALERS WHO DEAL IN PRE-PAID CASH CARDS L IKE RE-CHARGE COUPONS AND TOP-UP CARDS AS PRINCIPAL TO PRINCIPAL . NOT CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE, THE ITO HELD THE ASSESSEE, IN DEFAULT UNDER THE PROVISIONS OF SECTION 201(1) OF THE ACT I.T.A. NO. 81/MDS/2013 3 AND FURTHER HELD THAT THE ASSESSEE IS LIABLE TO MAK E PAYMENT OF ` 3,49,48,691/- ALONG WITH INTEREST OF ` 1,22,32,010/- U/S. 201(1A). AGGRIEVED AGAINST THE ORDER OF ITO DT. 30-0 3-2010 PASSED UNDER SECTION 201(1) & 201(1A) OF THE ACT, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) D ISMISSED THE APPEAL OF THE ASSESSEE VIDE IMPUGNED ORDER. NOW, T HE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE ORDER OF THE CIT(APPEALS). 3. SHRI S. SRIDHAR, ADVOCATE APPEARING ON BEHA LF OF THE ASSESSEE SUBMITTED THAT THE CIT(APPEALS) HAS FAILED TO TAKE INTO CONSIDERATION THE FACT THAT ALL THE DEDUCTEES HAVE PAID THEIR TAX ES AND CERTIFICATE FROM THE CHARTERED ACCOUNTANT (CA) OF THE DEDUCTEES WERE PRODUCED BEFORE THE CIT(APPEALS). ONCE THE DEDUCTEES HAVE A SSESSED THE INCOME AND HAVE PAID THE TAX THEREON, THE ASSESSEE CANNOT BE HELD TO BE ASSESSEE IN DEFAULT. THE LD. COUNSEL FOR THE ASSESSEE IN ORDER TO SUPPORT HIS CONTENTIONS, RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LIMITED VS. CIT REPORTED AS 293 ITR 226. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE AMENDME NT HAS BEEN BROUGHT BY THE FINANCE ACT OF 2012, WHEREIN PROVISO HAS BEEN ADDED TO SECTION 201, ACCORDING TO WHICH A RESIDENT SHALL NOT BE DEEM TO BE I.T.A. NO. 81/MDS/2013 4 AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF TH E RECIPIENT HAS FURNISHED HIS RETURN OF INCOME U/S. 139; HAS TAKEN IN TO ACCOUNT SUCH SUMS FOR COMPUTING INCOME IN SUCH RETURN OF INCOME AND HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETUR N OF INCOME. THE SAID AMENDMENT ALTHOUGH HAS BEEN MADE APPLICABLE W. E.F. 01-07-2012, HOWEVER, THE INTENTION OF THE LEGISLATU RE IS THAT THE PERSON SHOULD NOT BE HELD TO BE ASSESSEE IN DEFAULT IN CASE THE DEDUCTEE HAS ACCOUNTED THE INCOME AND HAS PAID TAX THEREON. 4. ON THE OTHER HAND, SHRI RAJIB KUMAR HOTA, A PPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THE ASSESSEE MAY HAVE PRODUCED CERTIFICATE FROM THE CAS OF THE DEDUCTEE TO SHOW TH AT THE TAX HAS BEEN PAID BUT STILL THE ASSESSEE IS LIABLE FOR INTEREST UNDER THE PROVISIONS OF SECTION 201(1A) FOR DELAYED PAYMENTS. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF TH E AUTHORITIES BELOW AS WELL AS THE JUDGMENT CITED BY THE LD. COUN SEL FOR THE ASSESSEE. IT IS AN ADMITTED POSITION THAT THE ASSE SSEE HAS PRODUCED CERTIFICATES FROM THE CHARTERED ACCOUNTANTS OF THE DEDUCTEE TO SHOW THAT THE AMOUNT HAS BEEN ASSESSED TO TAX IN THE RET URN AND TAX HAS BEEN PAID THEREON. THE HONBLE SUPREME COURT OF I NDIA IN THE CASE I.T.A. NO. 81/MDS/2013 5 OF HINDUSTAN COCA COLA BEVERAGES LIMITED (SUPRA) HAS HELD THAT ONCE THE DEDUCTEE HAS DISCLOSED THE INCOME AND HAS PAID TAX THEREON, THE DEDUCTOR SHALL NOT BE HELD TO BE ASSES SEE IN DEFAULT UNDER THE PROVISIONS OF SECTION 201(1). HOWEVER, T HE ASSESSEE SHALL BE LIABLE FOR DELAYED PAYMENT OF TAXES UNDER THE PR OVISIONS OF SECTION 201(1A). IN THE PRESENT CASE, TAX LIABILITY HAS B EEN DISCHARGED, THEREFORE, THE ASSESSEE CANNOT BE HELD TO BE AN ASS ESSEE IN DEFAULT. IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COUR T OF INDIA IN THE CASE OF HINDUSTAN COCA COLABEVERAGES LIMITED (SUPRA), THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. HOWEVER, THE DEPARTMENT IS AT LIBERTY TO RECOVER THE AMOUNT OF INTEREST, IF ANY, ARISING OUT OF THE DELAYED PAYMENT OF TAXES UNDER THE PROVISIONS OF 20 1(1A) OF THE ACT FROM THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON MONDAY, THE 26 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIKA S AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 26 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR
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