SHREE VINAYAK DEUCATION SOCIETY, Jaipur V. ITO, Alwar

ITA 829/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5264 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DR DHK
• Keywords: Opportunity of being heard
• Section: 194C; 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 829/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHREE VINAYAK EDUCATION SOCIETY UNIT SIDHI VINAYAK COLLEGE E-1, B-1, MIA( EXT.), ALWAR CUKE VS. THE ITO (TDS ) ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: JPRS07622G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY: SHRI O.P. BHATEJA, , ADDL.CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/03/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16 /05/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), ALWAR, DATED 29-09-2014 FOR THE ASSESSMENT YEAR 2011-12 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE DEMAND RAISED U/S 201(1) AT RS. 2,55 ,854/- AND U/S 201(1A) AT RS. 53,727/- AGGREGATING TO RS. 3,09,581 /- BY HOLDING THAT ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON FOLLOWING PAYMENTS BY NOT PROPERLY APPRECIATING THE NATURE OF PAYMENT. ITA NO. 829/JP/2014 SHREE VINAYAK EDUCATION SOCIETY VS. ITO (TDS), ALWA R . 2 NATURE OF PAYMENT SECTION APPLIED DEMAND U/S 201(1) (IN RS. ) DEMAND U/S 201(1A) (IN RS. ) TOTAL DEMAND (IN RS. ) FIXED MONTHLY SALARY TO FACULTY 194J 2,13,404 4,814 2,58,218 FIXED MONTHLY SALARY TO ADVOCATE 194J 30,100 6,321 36,421 SUPPLY OF ADVERTISEMENT MATERIAL 194C 12,350 2,592 14,942 TOTAL 2,55,854 53,727 3,09,581 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW THE ABOVE DEMAND EVEN WHEN THE RECIPIENT OF THE SAID AMOUNTS HAVE INCLUDED THE SAME IN THEIR RETURN OF INCOME AND PAID TAX OVE R THE SAME. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S RUNNING AN EDUCATIONAL COLLEGE. A SURVEY U/S WAS CONDUCTED IN THE COLLEGE PREMISES ON 21-02-2012 BY THE ITO (TDS) WHICH REVEALED SOME INFORMATION ABOUT CERTAIN PAYMENTS ON WHICH TDS WAS NOT DEDUCT ED. CONSEQUENTLY, THE ASSESSEE WAS DEEMED TO BE IN DEFAULT IN RESPECT OF THESE PAYMENTS AND ABOVE DEMAND INCLUDING INTEREST THEREON WAS RAISED. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHEREIN THE LD. CIT(A) UPHELD THE ORDER OF THE AO BY HOLDING THAT T HE ASSESSEE IS LIABLE FOR TDS AND BEING IN DEFAULT. THE OBSERVATIONS OF T HE LD. CIT(A) ARE REPRODUCED AS UNDER:- ITA NO. 829/JP/2014 SHREE VINAYAK EDUCATION SOCIETY VS. ITO (TDS), ALWA R . 3 4.3 I HAVE GONE THROUGH THE ORDER AS WELL AS SUB MISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 3,09,581/- HAS BEEN MADE BY THE ITO (TDS) ON ACCOUNT OF FAILU RE ON THE PART OF THE ASSESSEE TO DEDUCT TAX U/S 194J AND 194C OF THE I.T. ACT ALONGWITH INTEREST. ITO (TDS ) HAS STATED THAT THE APPELLANT HAS FAILED TO DEDUCT TAX U/S 194J OF THE I.T. ACT @ 10% ON THE AMOUNT PAID TO THE GUEST FACULTY OF RS. 21,34,040/- DURING FINANCIAL YEAR 2010-11. ACCORDINGLY, A DEMAND OF RS. 2,13,404/- ON ACCOUNT OF SHORT DEDUCTION OF TAX ALONGWITH INTEREST OF RS. 44 ,814/- WAS RAISED ON THE APPELLANT AFTER CONSIDERING THE EXPLANATION FURNISHED IN THIS REGARD. 4.4 FURTHER, ITO (TDS) FOUND THAT NO TDS U/S 194J O F THE I.T. ACT @ 10% ON THE PAID ON ACCOUNT OF LEGAL AND PROFESSIONAL FEE OF RS. 3,01,000 DURING F.Y. 2010-11 HAS BEEN MA DE. ACCORDINGLY, A DEMAND OF RS. 30,100/- ON ACCOUNT OF SHORT DEDUCTION ALONGWITH INTEREST OF RS. 6,321/- WAS RAI SED ON THE APPELLANT AFTER CONSIDERING THE EXPLANATION FURNISH ED IN THIS REGARD. SIMILARLY, IT WAS FOUND THAT APPELLANT ALSO FAILED TO DEDUCT TAX AT SOURCE U/S 194C OF THE I.T. ACT ON ACCOUNT O F PAYMENT OF RS. 12,60,678/- DEBITED UNDER THE HEAD ADVERTISEMENT AN D PUBLICATION. ACCORDINGLY, A DEMAND OF RS. 12,350/- ON ACCOUNT OF SHORT DEDUCTION OF TAX AND INTEREST OF RS. 2,592/- HAS BE EN RAISED AFTER DULY TAKING INTO CONSIDERATION THE EXPLANATION FURN ISHED BY THE APPELLANT. 4.5 THE APPELLANT HAS REITERATED THE SUBMISSIONS FI LED BEFORE THE ITO (TDS) AND HAS ALSO ENCLOSED COPIES O F BILLS FOR THE PAYMENTS MADE. 4.6 THE EXPLANATION FURNISHED BY THE APPELLANT LAC KS SUBSTANCE AND IS ONLY AN ATTEMPT TO COVER UP THE FA ILURE IN COMPLYING WITH THE PROVISIONS OF LAW. CONSIDERING T HE EVIDENCE AVAILABLE ON RECORD, I DO NOT FIND ANY FORCE IN THE ARGUMENTS OF THE APPELLANT AND HOLD THAT IT HAS CLEARLY FAILED TO CO MPLY WITH THE PROVISIONS OF SECTION 194J AND 194C OF THE I.T. ACT BY FAILING TO DEDUCTION THE TAX AT SOURCE. THE PAYMENTS MADE TO G UEST FACULTY ARE CLEARLY COVERED WITHIN THE PROVISION OF SECTION 194J OF THE I.T. ACT AND THE INSTITUTION WAS LIABLE TO DEDUCT TAX AT SOURCE. SIMILARLY, ITA NO. 829/JP/2014 SHREE VINAYAK EDUCATION SOCIETY VS. ITO (TDS), ALWA R . 4 THE PAYMENTS MADE AND DEBITED UNDER THE HEAD LEGAL AND PROFESSIONAL CHARGES ARE COVERED WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 194J OF THE I.T. ACT AND THE APPELLANT COULD NOT FURNISH A SATISFACTORY EXPLANATION. ALSO THE PA YMENTS MADE AND DEBITED UNDER THE HEAD ADVERTISEMENT AND PUBLICATIO N WILL FALL WITHIN THE SCOPE OF THE PROVISION OF SECTION 194C O F THE I.T. ACT. 4.7 IN VIEW OF THE ABOVE FACTS, I CONFIRM THE ADDIT ION OF RS. 3,09,581/- MADE BY THE ITO (TDS) UNDER THIS HEAD. 2.3 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME FACTS AS RAISED BEFORE THE AUTHORITIES BELOW. 2.4 THE LD. DR CONTENDS THAT THE ASSESSEE HAS BEEN HELD TO BE IN DEFAULT CONSEQUENT TO MATERIAL AVAILABLE ON RECORD DURING T HE COURSE OF SURVEY WHICH HAS NOT BEEN DISPUTED BY THE ASSESSEE THAT PA YMENTS ARE ACTUALLY MADE. HOWEVER, TO AVOID TDS, THE ASSESSEE HAS CREAT ED AN AFTER THOUGHT THAT TWO TYPES OF PAYMENTS ARE MADE I.E. REGULAR SA LARY AND GUEST FACULTY PAYMENTS NOT LIABLE FOR TDS, WHEREAS THE RECORD OF THE ASSESSEE IS CONTRARY. THEREFORE, THE TDS PROVISONS CLEARLY ESTA BLISHES THAT THE ASSESSEE IS IN DEFAULT. 2.5 DURING THE COURSE OF HEARING, THE ASSESSEE RAIS ED THE ALTERNATIVE GROUND NO. 2 AS RAISED ABOVE IN GROUND OF APPEAL CO NTENDING THAT THE APPROPRIATE RELIEF MAY BE GRANTED. 2.6 THE LD. DR IS HEARD. ITA NO. 829/JP/2014 SHREE VINAYAK EDUCATION SOCIETY VS. ITO (TDS), ALWA R . 5 2.7 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN MY CONSIDERED VIEW THE AUTH ORITIES BELOW HAVE CLEARLY DEMONSTRATED THAT THE ASSESSEE WAS LIABLE F OR NON-DEDUCTION OF TDS ON THE PAYMENTS IN QUESTION. THEREFORE, THE DEM AND IN QUESTION IS UPHELD. COMING TO THE ALTERNATIVE GROUND OF THE ASS ESSEE THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THAT THE RECIPIENTS H AVE INCLUDED THE INCOME IN THEIR RETURNS AND PAID TAXES THEREON, NO SUCH GR OUND WAS RAISED BEFORE THE LD. CIT(A). CONSEQUENTLY, IT CANNOT BE PRESUMED THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THIS GROUND OF THE ASSESSEE. HOWEVER, THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BE VERAGES (P) LTD. VS. CIT, 293 ITR 226 HAS HELD THAT IF RECIPIENTS HAVE P AID THE TAXES ON THE RELEVANT RECEIPT THEN TDS LIABILITY CANNOT BE FASTE NED ON THE PAYER AS IT AMOUNTS TO DOUBLE TAXATION, HOWEVER, THE ASSESSEE W ILL BE LIABLE FOR INTEREST ON THE INTERVENING PERIOD. THE FACTS ABOUT PAYMENT OF TAX BY RECIPIENTS ARE NOT EMERGING FROM THE RECORD. THUS I N THE INTEREST OF JUSTICE, THE ISSUE RAISED AS GROUND NO.2 BY THE ASS ESSEE IS SET ASIDE AND RESTORE BACK TO THE FILE OF THE AO TO DECIDE IT AFR ESH BY PROVIDING AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . ITA NO. 829/JP/2014 SHREE VINAYAK EDUCATION SOCIETY VS. ITO (TDS), ALWA R . 6 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/20 16. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/05/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHREE VINAYAK EDUCATION SOCIETY, ALW AR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO (TDS), ALWAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 829/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR