State Bank of India, V. The Income Tax Officer (TDS-1), Chandigarh

ITA 853/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6915 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 14-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: ANKUR BANSAL
• Keywords: Principle of natural justice; Question of law; Right to appeal
• Section: 206AA; 133A; 201(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NOS. 853 & 854/CHD/2016 ASSESSMENT YEARS: 2011-12 & 2012-13 STATE BANK OF INDIA VS. THE ITO (TDS-I) SECTOR-7C, MADHYA MARG CHANDIGARH CHANDIGARH-160019 TAN NO. PTLS12706B (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ANKUR BANSAL REVENUE BY : SH. RAVI SARANGAL DATE OF HEARING : 26/07/2017 DATE OF PRONOUNCEMENT : 31/08/2017 ORDER PER BENCH BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF LD. CIT(A)-1, CHANDIGARH DT. 28/04/2016. 2. SINCE THE GROUNDS RAISED AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, THE SAME WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. WE SHALL BE TAKING ITA NO. 854/CHD/2016 AS THE LEAD CASE FOR DISPOSING OF BOTH THE APPEALS TOGETHER. 3. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER: 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE IMPUGNED ORDER IS AGAINST THE DECISION OF HONBLE A PEX COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. 293 ITR 226 IN RAISING DEMAND AGAINST THE ASSESSEE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF AO TREAT ING THE ASSESSEE AS ASSESSE IN DEFAULT IN RESPECT OF INTEREST PAID WITHOUT APPREC IATING THE PROVISIONS OF SECTION 201(1) READ WITH SECTION 191 OF THE INCOME-TAX ACT, 1961(THE ACT). THE LD. CIT(A) HAS ERRED BY IGNORING THE JUDGMENT OF HONBLE ALLAH ABAD HIGH COURT IN THE CASE OF JAGRAN PRAKASHAN LTD. VS. DCIT 345 ITR 288. 2 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF AO IN NO T ACCEPTING THE SUBMISSION THAT ALL THE PANS WERE ALREADY AVAILABLE WITH THE B ANK IN THE COMPUTER SYSTEM BUT DUE TO IGNORANCE OF THE DEPOSITORS THE DETAILS WERE NOT FURNISHED IN THE FORM 15G/15H. THE PRINCIPLE OF NATURAL JUSTICE WAS GROSS LY VIOLATED BY NOT PROVIDING REASONABLE OPPORTUNITY TO CORRECT THE SAME. RELIANC E PLACED ON VIJAY HEMANT FINANCE & ESTATES LTD. VS. ITO [1999] 105 TAXMAN 51 9 (MAD.). 4. BRIEF FACTS OF THE CASE ARE THAT DURING A TDS IN SPECTION/SURVEY U/S 133A OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE BA NK, IT WAS FOUND THAT A FEW FORM 15G/15H WHICH WERE ACCEPTED BY THE BANK ARE EI THER WITHOUT PAN OR HAVE INVALID PAN OF THE PERSONS/DEPOSITORS. IT WAS ALSO NOTICED BY THE ASSESSING OFFICER FROM THE DETAILS FURNISHED BY THE ASSESSEE (DEDUCTOR BANK) THAT AS PER THE PROVISIONS OF SECTION 206AA OF THE ACT, THE PER SON RESPONSIBLE (PR) OF THE ASSESSEE BANK HAS NOT DEDUCTED TAX AT SOURCE@20% IN THE CASES WHERE THE PERSONS / DEPOSITORS FURNISHED FORM 15G/15H WITH TH E BANK HAVING INVALID/WRONG/NO PAN. 5. A SHOW CAUSE NOTICE WAS ISSUED DURING THE PROCEE DINGS BY THE ASSESSING OFFICER REQUIRING TO EXPLAIN AS TO WHY NOT THE PR BE TREATED AS PERSON IN DEFAULT U/S 201(1)/201(1A) OF THE ACT. THE ASSESSE E SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AS UNDER: A TDS INSPECTION/SURVEY U/S 133A OF THE I.T. ACT, 1961 IS CONDUCTED ON 19.02.2013 AND DURING THE COURSE OF PROCEEDINGS IT WAS BEING N OTICED THAT THE FORM 15G/15H WAS SUBMITTED EITHER WITHOUT PAN OR INVALID PAN IN SOME OF THE CASES. WE ENCLOSE LIST OF DEPOSITORS WHO HAVE ERRONEOUSLY MENTIONED CORRECT PAN NUMBERS ON FORM 15G/15H AT DIFFERENT PLACE THAN COL UMN SPECIFIED FOR IT. THEREFORE, IT IS REQUESTED WHAT IT MAY BE TREATED A S VALID (PHOTOCOPIES ENCLOSED). FURTHER, WE HAVE TO BRING IN TO YOUR KIND NOTICE TH AT PAN NUMBERS WHICH ARE NOT MENTIONED IN FORM 15G/15H ARE MENTIONED IN THE BANK S COMPUTER SYSTEM BUT DUE TO IGNORANCE WERE NOT WRITTEN BY THE DEPOSITOR IN THE FORM 15G/15H SUBMITTED TO US. IN VIEW OF ABOVE FACTS, ASSESSEE PRAYS FOR WAIVER O F TAX U/S 206AA AND THEREBY INTEREST U/S 201(1A) OF THE I.T. ACT, 1961 DEMANDED IN SHOW CAUSE NOTICE. 6. THE ASSESSING OFFICER DID NOT CONSIDER THE EXPLA NATION OF THE APPELLANT AND HELD THE PR AS PERSON IN DEFAULT U/S 201(1) OF THE ACT FOR NOT DEDUCTING THE TAX AT THE RATE PRESCRIBED U/S 206AA OF THE ACT AND ALSO CHARGED INTEREST U/S 201(1A) OF THE ACT. 3 7. THE LD. CIT (A) HAS DIRECTED THE AO TO TREAT THE PR AS ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND CHARGING INTERES T U/S 201(1A) OF THE ACT. THE LD. CIT(A) HAS DIRECTED TO GIVE RELIEF TO THE EXTEN T OF THE 7 DEPOSITORS ONLY WHOSE PAN WAS SUBMITTED BY THE BANK AFTER DUE VERIFICATI ON BY THE ASSESSING OFFICER. 8. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE US. 8.1. DURING THE PROCEEDINGS, THE ASSESSEE FILED ADD ITIONAL GROUNDS OF APPEAL WHICH WERE NOT TAKEN BEFORE THE LD. CIT(A) FOR THE FIRST TIME BEFORE THE TRIBUNAL. 8.2. THE ADDITIONAL GROUNDS OF APPEAL READS AS UNDE R: THAT THE NOTICE ISSUED UNDER SECTION 201(1)/(1A) OF THE INCOME TAX ACT, 1961 BY THE LD. AO WAS WITHOUT ASSUMING PROPER JURISDICTION , SINCE THE ASSESSEE FALLS WITHIN THE JURISDICTION OF ACIT/DCIT INSTEAD OF ITO (TDS-1 ) AND THEREFORE THE IMPUGNED NOTICE UNDER SECTION 201(1)/(1A) OF THE INCOME TAX ACT, 1961 ITSELF WAS ILLEGAL AND VOID-AB-INITIO AND HENCE, THE CONSEQUENT ASSESSMENT FRAMED U/S 201(1/)(1A) OF THE INCOME TAX ACT, 1961 IS WITHOUT JURISDICTION, I NVALID, VOID AB INITIO AN LIABLE TO BE ANNULLED. 8.3 IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX, HONBLE SUPREME COURT HAS EXAMINED THE QUESTIONS OF LAW AND HELD AS UNDER: 4. WHERE ON THE FACTS FOUND BY THE AUTHORITIES BELO W A QUESTION OF LAW ARISES (THOUGH NOT RAISED BEFORE THE AUTHORITIES) WHICH BE ARS ON THE TAX LIABILITY OF THE ASSESSEE, WHETHER THE TRIBUNAL HAS JURISDICTION TO EXAMINE THE SAME? 5. UNDER SECTION 254 OF THE INCOME-TAX ACT, THE APP ELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPO RTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIBLE TE RMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIE S IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF , FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON-TAXABLE ITEM IS TAXED OR A PERMISSIBLE D EDUCTION IS DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. WE DO NOT SEE ANY REASON TO R ESTRICT THE POWER OF THE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUN DS WHICH ARISE FROM THE ORDER OF THE \ COMMISSIONER OF INCOME-TAX (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS-OBJ ECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. 7. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO I SSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEA LS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE \ TRIBUNAL [VID E, E.G., C.I.T, V. ANAND PRASAD (DELHI), C.I.T. V. KARAMCHANDPREMCHAND P. LTD. AND C.I.T. V. CELLULOSE PRODUCTS OF INDIA LTD. . UNDOUBTEDLY, THE TRIBUNAL WILL HAVE TH E DISCRETION TO I ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIB UNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS W HICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QU ESTION SHOULD NOT BE 4 ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 8. THE REFRAMED QUESTION, THEREFORE, IS ANSWERED IN THE AFFIRMATIVE, I.E., THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORITIES BELOW AND HAVING A BEAR ING ON THE TAX LIABILITY OF THE ASSESSEE. WE REMAND THE PROCEEDINGS TO THE TRIBUNAL FOR CONSIDERATION OF THE NEW GROUNDS RAISED BY THE ASSESSEE ON THE MERITS. 9. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT OF HON BLE SUPREME COURT, SINCE THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE REGARDING THE JURISDICTION IS A QUESTION OF LAW AND GOES TO THE ROOT OF THE TAX LIA BILITY, THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE ARE ADMITTED. 10. SINCE THE ISSUE OF THE JURISDICTION WAS NOT BEF ORE THE LD. CIT(A), IT IS HEREBY DIRECTED THAT THE CASE BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) TO PASS A SPEAKING ORDER ON THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. 11. AFTER DECIDING THE ISSUE OF JURISDICTION BY THE LD. CIT(A) THE CASE CAN BE TAKEN UP FOR ADJUDICATION ON MERITS. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/2017 SD/- SD/- (DIVA SINGH) (DR. B.R.R .KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR