Assistant Excise & Taxation Commissioner, Shimla V. ACIT, (TDS), Shimla

ITA 861/CHANDI/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5067 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-07-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S KEMWAL
• Keywords: TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 858 TO 861/CHD/2010 ASSESSMENT YEARS: 2004-05 TO 2007-08 THE ASSISTANT EXCISE & TAXATION VS. THE ACIT(TDS). COMMISSIONER, SHIMLA SHIMLA(H.P.) PAN NO. PTSLI1731G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY RESPONDENT BY: SHRI S.S.KEMWAL ORDER PER SUSHMA CHOWLA, JM THESE FOUR APPEALS BY THE ASSESSEE ARE AGAINST THE COMMON ORDER OF CIT(A), SHIMLA DATED 13.8.2009 RELATING TO ASSESSME NT YEARS 2004-05 TO 2007-08 AGAINST THE ORDERS PASSED UNDER SECTION 20 6C (6A) / 206C (7) OF THE I.T. ACT. ALL THESE APPEALS HAVING IDENTICAL G ROUNDS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE 2. THE COMMON GROUNDS RAISED IN ALL THE APPEALS ARE AS UNDER:- 1. THAT THE ORDER OF THE LEARNED CIT(A) SHIMLA IS DEFE CTIVE BOTH IN LAW AND FACTS OF THE CASE WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE LEARNED ACIT (TDS) SHIM LA (H.P.) 2. THAT IN THE FACT AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF 206C (1C) OF THE I.T. ACT, 1961 ARE N OT APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE HAS NOT GIVEN ON LEASE EITHER THE FOLLOWIN G. 2 A) PARKING LOT B) TOOL PLAZA C) MINING & QUARRYING THE DEMAND OF RS. 3,264/- CREATED BY THE LEARNED CI T(A) (TDS) AND CONFIRMED BY CIT(A) IS ERRONEOUS AND DESERVES TO BE QUASHED. 3. THAT THE ORDER IMPOSING INTEREST OF RS. 1,290/- U/S 206(7) IS NOT JUSTIFIED AND OPPOSED TO LAW BECAUSE NO TAX WAS REQUIRED TO BE COLLECTED AT SOURCE. 3. THE LEARNED AR FOR THE ASSESSEE POINTED OUT THAT ISSUE IN THE PRESENT APPEAL STANDS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF ASSTT. EXCISE AND TAXATION COMMISSIONER, NAHAN (H.P.) VS. ITO IN ITA NOS. 353 TO 356/CHD/2010 FOR ASSESSMENT YEARS 2004-05 TO 2007-08 WHEREIN THE ISSUE WAS DECIDED FO LLOWING THE EARLIER ORDER OF THE TRIBUNAL. 4. WE FIND THAT BOTH THE ISSUES RAISED IN THE PRESE NT APPEAL ARE IDENTICAL TO THE ISSUES RAISED IN THE CASE OF ASSTT . EXCISE AND TAXATION COMMISSIONER, NAHAN (H.P.) VS. ITO RELATING TO AS SESSMENT YEARS 2004-05 TO 2007-08. FOLLOWING THE RATIO LAID DOWN BY THE TRIBUNAL VIDE ORDER DATED 18.6.2010, RELATING TO ASSESSMENT YEARS 2004-05 TO 2007-08, WE DISPOSE OF ALL THE APPEALS RELATING TO ASSESSMEN T YEARS 2004-05 TO 2007-08 BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 5. THE GROUND NO.1 RAISED BY THE ASSESSEE IS GENERA L IS NATURE AND THE SAME IS DISMISSED. 6. THE GROUND NO.2 RAISED BY THE ASSESSEE IN ALL TH E APPEALS IS AGAINST THE APPLICABILITY OF PROVISIONS OF SECTION 206C (1C ) OF THE ACT. SIMILAR ISSUE AROSE BEFORE THE TRIBUNAL IN ASSTT. EXCISE & TAXATION COMMISSIONER, NAHAN (H.P.) VS. ITO, WHICH PLACED RE LIANCE ON THE RATIO 3 LAID DOWN IN EARLIER DECISION OF TRIBUNAL IN ASSTT. EXCISE & TAXATION COMMISSIONER, BILASPUR (H.P.) VS. ITO (TDS), PALAM PUR (ITA NOS. 273 TO 277/CHANDI/2009) AND ASSTT. EXCISE & TAXATION CO MMISSIONER, UNA VS. ITO (TDS) PALAMPUR (ITA NOS. 293 TO 296/CHANDI/2009 ), WHEREIN VIDE ORDER DATED 28.5.2009 VIDE PARA NOS. 9, 10 & 11 IT WAS HELD AS UNDER:- 9. ON A PERUSAL OF THE ABOVE, IT IS EVIDENT THAT E VERY PERSON, WHO GRANTS A LEASE OR A LICENCE OR ENTERS I NTO A CONTRACT OR OTHERWISE TRANSFERS ANY RIGHT OR INTERE ST EITHER IN WHOLE OR IN PART IN ANY PARKING LOT OR TO LL PLAZA OR MINE OR QUARRY TO ANOTHER PERSON FOR THE USE OF SUCH PARKING LOT OR TOLL PLAZA OR MINE OR QUARRY FOR THE PURPOSE OF BUSINESS SHALL AT THE TIME OF DEBITING O F THE AMOUNT PAYABLE BY THE LICENSEE OR LESSEE TO THE ACC OUNT OF THE LICENSEE OF LESSEE OR AT THE TIME OF RECEIPT OF SUCH AMOUNT FROM THE LICENSEE OR LESSEE IN CASH OR BY IS SUE OF CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, SHALL COLLECT FROM THE LICENSEE OR LESSEE OF ANY SUCH LICENCE, LEASE OR CONTRACT, A SUM EQUAL TO THE SPECIFIED PERCENTAGE AS INCOME-TAX. THE AMOUNT OF INCOME-TAX TO BE COLLECTED, HAS BEEN PRESCRIBED IN THE TABLE ANNEXED TO SECTION 206C(IC) OF THE ACT. IN OTHER WORDS, SECTION 206C(IC) REQUIRES COLLECTION OF TAX AT SOURCE BY A PERSON WHO GRANTS A LEASE OR LICENCE, WHERE THERE IS A TRANSFER OF A RIGHT OR INTEREST IN ANY P ARKING LOT OR TOLL PLAZA OR MINE OR QUARRY TO THE CONCERN ED LICENSEE OR LESSEE FOR THE PURPOSE OF BUSINESS. T HE CASE SET UP BY THE ASSESSING OFFICER IS THAT THE STATE GOVERNMENT HAS AWARDED LEASE TO COLLECT TOLL UNDER THE TOLLS ACT TO THE PRIVATE LICENSEE AND THE APPELLANT , WAS REQUIRED TO COLLECT THE TAX AT SOURCE S MANDATORY B Y SECTION 206C(IC) OF THE ACT. FOR THE FINANCIAL YEA R UNDER CONSIDERATION, THE ASSESSING OFFICER HAS POINTED OU T THAT THE LEASE WAS GRANTED IN FAVOUR OF M/S GULZAR AND C O. AND PAYMENTS HAVE BEEN RECEIVED FROM SUCH CONCERN A S PER ANNEXURE A OF THE ASSESSMENT ORDER. ON RECEIP T OF SUCH PAYMENTS, THE ASSESSEE WAS REQUIRED TO COLLECT THE TAX IN TERMS OF SECTION 206C(IC) OF THE ACT, WHICH THE ASSESSEE HAS FAILED TO DO. THEREFORE, THE ASSESSEE IS IN DEFAULT. THE ASSESSEE HAS CONTENDED THAT THE PROVI SIONS OF SECTION 206C(IC) OF THE ACT ARE NOT APPLICABLE I N THE INSTANT CASE. THE REASONS FOR THE SAME HAVE NOTED BY US IN PARA 5 EARLIER. ON CONSIDERATION OF THE ARGUMEN TS PUT- FORTH BY THE ASSESSEE AND THE BARE PROVISIONS OF TH E ACT, WE ARE UNABLE TO UPHOLD THE STAND OF THE ASSESSEE. QUITE CLEARLY, HERE IS A CASE WHERE THE LICENSEE HAS BEEN GRANTED THE RIGHT TO COLLECT THE TOLL PAYABLE UNDER THE TOLLS ACT ON BEHALF OF THE STATE GOVERNMENT. THERE IS NO DENYING THE FACT THAT THE STATE GOVERNMENT HAS GRAN TED THE LEASE TO THE LICENSEE WHEREBY THE LICENSEE IS T O COLLECT 4 THE TOLL AS PER THE TOLLS ACT. THE EMPHASIS LAID B Y THE APPELLANT ON THE PRESENCE OF EXPRESSION TOLL PLAZA AND FOR THE PURPOSES OF BUSINESS IN SECTION 206C(IC), IN OUR VIEW, DOES NOT DEFEAT THE INVOKING OF SECTION 206C(IC) IN THE PRESENT CASE. THE CLAIM MADE OUT B Y THE APPELLANT IS THAT THE LEASE GRANTED SHOULD COVER TH E USE OF TOLL PLAZA FOR THE PURPOSE OF BUSINESS AND IN THIS CASE THERE IS NO QUESTION OF DOING ANY BUSINESS AND HENC E INAPPLICABILITY OF SECTION 20-6C(1C) OF THE ACT, IN OUR VIEW, THE LICENSEE OR LESSEE HERE IS UTILIZING THE TOLL PLAZA TO CONDUCT ITS BUSINESS OF COLLECTING TOLL IN TERMS OF THE RIGHT GRANTED BY THE STATE GOVERNMENT. PERTINENTLY , THE LESSEE IS IN THE BUSINESS OF ASSISTING THE STATE GOVERNMENT IN COLLECTION OF TOLL. THUS THE AFORESA ID VIEW OF THE APPELLANT IS ERRONEOUS. THE MERE AWARDING O F A CONTRACT TO COLLECT TOLL BY THE STATE GOVERNMENT, D OES NOT CLOTH THE LESSEE WITH THE POWER OF STATE TO COLLECT THE TAX ENSHRINED UNDER THE TOLLS ACT. THE TOLL ACT ITSELF PROVIDES A MECHANISM OF COLLECTING THE TOLL BY WAY OF SECTION 3A OF THE TOLLS ACT. FURTHER, INTERPRETATI ON PLACED BY THE APPELLANT ON THE EXPRESSION TOLL PLA ZA FOR THE PURPOSES OF SECTION 206C(1C) OF THE ACT, IN OUR VIEW IS ALSO TOO NARROW AND CANNOT BE ACCEPTED. 10. IN OUR CONSIDERED OPINION, THE PROVISIONS OF SE CTION 206C(IC) OF THE ACT HAVE BEEN CORRECTLY INVOKED BY THE ASSESSING OFFICER WITH RESPECT TO THE IMPUGNED TRANSACTIONS AND IN THE ABSENCE OF THE ASSESSEE HAV ING COLLECTED THE REQUISITE TAX AT SOURCE, THE ASSESSEE HAS BEEN RIGHTLY TREATED TO BE AN ASSESSEE IN DEFAULT U /S 206C(6A) OF THE ACT. AT THIS POINT, WE MAY ALSO RE FER TO THE OBSERVATION OF THE ASSESSING OFFICER IN PARA-5 OF HIS ORDER TO POINT OUT THAT THE AETC, NAHAN, H.P. WAS COLLECTING THE REQUISITE TAX U/S 206C(IC) OF THE AC T FOR THE FINANCIAL YEAR 2005-06 ON ACCOUNT OF TOLL COLLE CTED UNDER THE TOLLS ACT. THERE IS NO DENIAL TO THE AF ORESAID FACTUAL POINT STATED BY THE ASSESSING OFFICER. 11. FOR THE ABOVE REASONS, IN SO FAR AS THE FIRST P LEA OF THE ASSESSEE REGARDING THE APPLICABILITY OF SECTION 206C(IC) OF THE ACT IS CONCERNED, THE SAME IS HEREB Y DISMISSED. 7. THE FACTS IN THE APPEALS BEFORE US ARE IDENTICAL TO THE FACTS BEFORE THE TRIBUNAL IN THE AFORESAID CASES OF ASSIST EXCIS ES AND TAXATION COMMISSION, NAHAN (H.P.) & OTHERS VS. ITO (SUPRA) A ND FOLLOWING THE SAID RATIO, WE HOLD THAT THE PROVISIONS OF SECTION 206C (1C) OF THE ACT ARE APPLICABLE TO THE IMPUGNED TRANSACTIONS AND AS THE ASSESSEE HAS FAILED TO 5 COLLECT THE REQUISITE TAX AT SOURCE, THE ASSESSEE I S HELD TO BE IN DEFAULT U/S 206C(1C) OF THE ACT. HENCE, THE GROUND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 8. THE ISSUE IN GROUND NO. 3 RAISED BY THE ASSESSE E IS AGAINST THE CHARGEABILITY OF INTEREST U/S 206C(7) OF THE ACT. T HE TRIBUNAL VIDE PARA 15 OF ITS ORDER IN THE CASE OF ASSTT. EXCISE & TAXATIO N COMMISSIONER, BILASPUR & UNA H.P. VS. ITO (TDS), PALAMPUR (SUPRA) , HELD AS UNDER:- 15. THE NEXT GROUND RAISED IS AGAINST THE CHARGEABILITY OF INTEREST U/S 206C(7) OF THE ACT. ON THIS ASPECT, THE LEARNED COUNSEL FOR ASSESSEE QUITE FAI RLY CONTENDED THAT IN CASE THE ASSESSEE IS HELD LIABLE FOR COLLECTING THE REQUISITE TAX U/S 206C(IC) OF THE AC T, THE NON-DEDUCTION THEREAFTER WOULD RESULT IN THE CONSEQUENTIAL LEVY OF INTEREST U/S 206C(7) OF THE A CT. IN THE INSTANT CASE, HAVING HELD THAT THE ASSESSEE IS AN ASSESSEE IN DEFAULT FOR NOT HAVING COLLECTED THE RE QUISITE TAX U/S 206C(IC) OF THE ACT, THE INTEREST CHARGEABL E FOR SUCH DEFAULT AS PER SECTION 206C(7) OF THE ACT IS Q UITE JUSTIFIED. 9. WE ARE IN CONFORMITY WITH THE ORDER OF THE TRIBU NAL THAT WHERE THE ASSESSEE IS HELD TO BE IN DEFAULT FOR NOT HAVING CO LLECTED THE REQUISITE TAX U/S 206C(1C) OF THE ACT, THE CHARGING OF INTEREST F OR SUCH DEFAULT U/S 206C(7) OF THE ACT IS JUSTIFIED. THE GROUND OF APP EAL NO.3, RAISED BY THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSES SEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JULY, 2010. SD/- SD/- (G.S.PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD JULY, 2010 RKK 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR