Apar Mukhya Adhikari, Allahabad V. ITO, Allahabad

ITA 9/ALLD/2015

• Counselvise Citation: 920714 RSA 2015
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K PANDEY
• Assessee Lawyers: ASHISH BANSAL
• Keywords: Principle of natural justice
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH ALLAHABAD BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER ITA NO. 09, 10, 11 /ALLD/201 5 ASSESSMENT YEAR S : 20 10 - 11, 2011 - 12 & 2012 - 13 APAR MUKHYA ADHIKARI, O/O ZILA PANCHAYAT, 6 KUTCHERY ROAD, ALLAHABAD. P AN: ALDZO 0095E VS INCOME TAX OFFICER (TDS), AAYAKAR BHAWAN, ALLAHABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI A.K. PANDEY , D.R., ASSESSEE(S) BY : SHRI ASHISH BANSAL , A.R. / DATE OF HEARING : 02 / 0 9 /2015 / DATE OF PRONOUNCEMENT: 28 / 09/ 2015 ORDER PER: P.K. BANSAL ACCOUNTANT MEMBER SINCE ALL THESE APPEALS ARISE OUT OF THE COMMON ORDER OF THE CIT(A ) DATED 11.09.2014 AND HAVE THE COMMON GROUND S OF APPEAL IN ALL THE THREE YEARS, WE THEREFORE DECIDE ALL THESE APPEALS FILED BY THE ASSESSEE. BY THIS COMMON ORDER IN ALL THESE APPEALS , THE ASSESSEE HAS TAKEN THE FOLLOWING COMMON GROUND S OF APPEAL. 1. BECA USE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER PASSED BY THE ID. ITO(TDS) UNDER SECTION 206C(6A)/ 206C(7) OF THE ACT BY WRONGLY APPLYING THE PROVISIONS OF SECTION 206C(1C) OF THE ACT, AS THE SAID PROVISIONS ARE NOT APPLICABLE IN THE CA SE OF THE APPELLANT. 2 2. BECAUSE, AMOUNT COLLECTED BY THE APPELLANT BY WAY OF TEHBAZARI, TEHBAZARI - VAHAN STAND AND BALU - MORANG, GITTI - BOLDER - VAHAN SHULK COULD NOT BE TREATED AS AMOUNT COLLECTED TOWARDS USE OF 'PARKING LOT' OR 'TOLL PLAZA' SO AS TO MAKE OB LIGATORY FOR THE APPELLANT TO COLLECT TAX AT SOURCE (TCS) FROM ITS LICENSES. 3. BECAUSE, COLLECTION MADE BY THE APPELLANT, COULD AT BEST BE TREATED TO BE AKIN TO OCTROI' WHICH DOES NOT INVITE THE PROVISIONS OF TCS AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE CIT(A) IS WHOLLY ERRONEOUS BOTH ON FACTS AS WELL AS IN LAW. 4 BECAUSE THE COLLECTION MADE BY THE APPELLANT IS TOWARDS 'OCTORI', THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DISREGARDING THE SAME AND TREATING THE SAME TO BE 'TOLL' SO AS TO MAKE THE A PPELLANT LIABLE FOR COLLECTION OF TAX FROM THE PERSON TO WHOM THE LICENSE HAS BEEN GRANTED. 5. BECAUSE THE APPELLANT BEGS TO RESERVE ITS RIGHT TO AMEND/ MODIFY THE EXISTING GROUNDS OF APPEAL AND MAY TAKE ANY OTHER GROUND/ GROUNDS EITHER BEFORE OR AT THE TI ME OF HEARING OF APPEAL 6. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE - 2. GROUNDS NO.5 AND 6 ARE GENERAL IN NATURE , THEREFORE , DOES NOT REQUIRE ANY ADJUDICATION. 3. IN GROUNDS NO.1, 2, 3 AND 4 THE COMMON ISSUE INVOLVED RELATE TO THE APPLICABILITY OF THE PROVISION OF SECTION 206C OF THE INCOME TAX ACT. BOTH THE PARTIES AGREED THAT ALL THESE ISSUES BE DECIDED ON THE BASIS OF THE FACTS INVOLVED FOR THE ASSESSMENT YEAR 2010 - 11. 4. THE BRIEF FACTS IN AL L THESE CASES ARE THAT THE APPELLANT IS AN APAR MUKHYA ADHIKARI ZILA PANCHAYAT CONSTITUTED UNDER THE UTTAR 3 PRADESH KSHETTRA PANCHAYAT AND ZILA PANCHAYAT ADHIN I YAM ACT, 1961 . I N ORDER TO REGULARIZE ITS FUNCTION, A POLICY HAS BEEN DEVISED WHEREBY TAHBAZARI - V AHAN STAND AND BALU - MORANG, GITTI - BOULDER - VAHAN SHULK IS AUCTIONED AND AUTHORITY LETTER IS ISSUED TO THE HIGHEST BIDDER . 5. THE ASSESSING OFFICER CONDUCTED A SURVEY U/S.133B OF THE INCOME TAX ACT ON 3.5.2012 AND IT WAS NOTICED THAT THERE WERE THREE KINDS OF AUCTIONS (I) TAHBAZARI, (II) TAHBAZARI VAHAN STAND & (III) BALU MORANG AND GITTI BOULDER VAHAN SHULK . ZILA PANCHAYAT HAS ISSUED LICENSE TO DIFFERENT PERSONS (THROUGH TENDER AND AUCTION) FOR COLLECTION OF TAHBAZARI ETC. THE ASSESSING OFFICER WAS O F THE VIEW THAT THE AMOUNT COLLECTED BY ZILA PANCHAYAT FALLS UNDER AND WITHIN THE SCOPE OF TC S. THE ASSESSING OFFICER WORKED OUT THE AMOUNT OF SHORT COLLECTION AND AMOUNT OF THE INTEREST U/S.206(7) OF THE ACT AS UNDER: FY 2009 - 10 AMT TAX INT TOTAL 764 TAHBAZARI - - - - 765 TAHBAZARI - VAHAN STAND 4,428,620 88,572 38972 127544 766 BALU, MORANG, GITTI VAHAN SHULK - - - - TOTAL 4,428,620 88,572 38,972 127,544 APAR MUKHYA ADHIKARI, ZILA PANCHAYAT 764 TO 766/ITO/TDS/ALLD/12 - 13 ALLAHABAD. A.Y.2010 - 11 TO 2012 - 13 4 FY 2010 - 11 AMT TAX INT TOTAL 764 TAHBAZARI 1,320,100 26,402 8,448 34,850 765 TAHBAZARI - VAHAN STAND 2,991,600 59,832 19,146 78,978 766 BALU, MORANG, GITTI VAHAN 1,904,000 38,080 12,186 50,266 SHULK TOTAL 6,215,700 124,314 39,780 164,094 FY 2011 - 12 AMT TAX INT TOTAL 764 TAHBAZARI 4,121,200 82,424 16485 98,909 765 TAHBAZARI - VAHAN STAND 7,695,500 153,910 30,782 184,692 766 BALU, MORANG, GITTI VAHAN 12,786,000 255, 720 51, 144 306,864 SHULK TOTAL 24,602,700 492,054 98,411 590,465 6. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE, THE ASSESSEE AGITATED THE PROPOSAL TO TREAT COLLECTION OF THE AMOUNT FALLING WITHIN THE SCOPE OF T C S. IT WAS EXPLAINED THAT THE LIC ENSES WERE ISSUED FOR COLLECTION OF TAHBAZARI IN R URAL AREAS OF DISTRICT ALLAHABAD , FROM BUSINESSMAN USING PUBLIC PLACE IN FAIRS/MARKETS ROADSIDE VEHICLE PARKING PLACE (CALL ED AS VAHAN STAND) HAVING A DISPLAY BOARD OF PARKING RATES . T HE ZILA PANCHAYAT HA D ISSUED THE LICENSE TO AUCTIONEER TO COLLECT VAHAN SHULK FROM TRACTORS/ TRUCK OWNERS AND OTHER VEHICLE CARRIER WHICH PASS THROUGH CERTAIN PLACES OF LOADING/UNLOADING OF BALU MORANG, GRIT AND BOULDERS. THE ASSESSING OFFICER DID NOT AGREE AND TOOK A VIEW THAT THE GRANT OF A 5 LICENSE OR TRANSFER RED ITS RIGHT THROUGH AUCTION TO CONTRACTORS/ AGENT TO COLLECT FEES ( SO CALLED AS TAHBAZARI ) IS NOTHING BUT A TOL L AND IN THIS REGARD HE RELIED UPO N THE FOLLOWING DECISIONS (I) STATE OF U.P. / CH H OTA L YADAV VS. DEVI LAL SING H AIR (2000) SC 961 ( II ) MOH AMMAD IBRAHIM V S. STATE OF UP AIR (1967) ALLD 24 . T HESE DECISION S DEFINED THE TOLL. RELIANCE WAS ALSO PLACED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF R . C . JAIN, AIR ( 1981 ) SC 591 IN WHICH IT WAS HELD THAT ZILA P ANCHAYAT IS A LOCAL AUTHORITY. 7. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) , THE CIT(A) SUSTAINED THE ORDER OF THE ASSESSING OFFICER BY DISMISSING ALL THE GROUND TAKEN BY THE ASSESSEE. 8. WE HEARD THE RIVAL SUBMISSION S ALONG WITH THE ORDER OF THE TA X AUTHORITIES BELOW AS WELL AS THE CASE LAW CITED BEFORE US BY THE LEARNED COUNSEL MR. ASHISH BANSAL IN THE CASE OF AKOLA MUNICIPAL CORPORATION VS. ITO WARD - 2 , AKOLA, 120 ITD 7 . T HE COMMON QUESTION INVOLVED IN ALL THESE APPEALS IS WITH REGARD TO LIABILITY OF THE ASSESSEE TO COLLECT TAX U/S.2 0 6C(1C) , THIS SECTION LAYS DOWN AS UNDER: '(1C) EVERY PERSON, WHO GRANTS A LEASE OR A LICENCEE OR ENTERS INTO A CONTRACTOR OR OTHERWISE TRANSFERS ANY RIGHT OR INTEREST EITHER IN WHOLE OR IN PART IN ANY PARKING LOT OR TOL L PLAZA OR MINE OR QUARRY, TO ANOTHER PERSON, OTHER THAN A PUBLIC SECTOR COMPANY (HEREAFTER IN THIS SECTION 6 REFERRED TO AS 'LICENSEE OR LESSEE') 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 OF THE AMOUNT PAYABLE BY THE LICENSEE OR LESSEE TO THE ACCOUNT OF THE LICENSEE OR LESSEE OR AT THE TIME OF RECEIPT OF SUCH AMOUNT FROM THE LICENSEE OR LESSEE IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIE R, COLLECT FROM THE LICENSEE OR LESSEE OF ANY SUCH LICENCE CONTRACT OR LEASE OF THE NATURE SPECIFIED IN COLUMN (2) OF THE TABLE BELOW, A SUM EQUAL TO THE PERCENTAGE, SPECIFIED IN THE CORRESPONDING ENTRY IN COLUMN (3) OF THE SAID TABLE, OF SUCH AMOUNT AS IN COME - TAX....' 9. LEARNED AR BEFORE US VEHEMENTLY CONTENDED THAT THE AMOUNT COLLECTED BY THE ASSESSEE BY WAY OF TAHBAZARI, T A HBAZARI - VAHAN STAND, B AL U - M ORANG , GITTI - BOULDER - VAHAN SHULK IS NEITHER FOR PARKING PLOT NOR FOR TOLL PLAZA. THE TEHBAZARI IS IMPOSE D TO REGULATE HAWKING BUSINESS. THE GOVERNMENT HAS FORMED THE ZILA PANCHAYAT ADHINIYAM , 1961 AND A SCHEME OF OPEN TAHBAZARI CONSIST ING OF GRANT OF PERMISSION TO SQUA T ON EARMARKE D SPOT FOR CARRYING ON THE BUSINESS. SECTION 2 06 C(1C) NOWHERE AUTHORIZES THE ASSESSEE TO COLLECT TAX WHILE GRANTING THE LEASE OR LICENSE OR ENTRIES INTO A CONDUCT FOR TAHBAZARI. 10. HOWEVER, W E DO NOT AGREE WITH THE CONTENTIONS OF THE ASSESSEE, WE NOTED THAT IN THE DECISION RELIED UP ON BY THE LEARNED AR IN THE CASE OF AKOLA MUNIC IPAL CORPORATION VS. ITO 120 ITD 7 UNDER PARAGRAPH 13 , THE TRIBUNAL HAS NOTED THAT TOLL IS A TAX LEVIED AS COMPENSATION FOR THE PURPOSE OF TEMPORARY USE OF LAND OR ALLOWING PASSAGE OF VEHICLES THROUGH THE LAND. IT IS AN UNDISPUTED 7 FACT THAT TAHBAZARI IS CO LLECTED BY THE ASSESSEE FROM TEMPORARY VENDOR SQUATTING ON THE SPECIFIED PLACES FOR SELLING THEIR GOODS. THUS, THIS IS A N ISSUE OF GRANTING OF A LICENSE IN RESPECT OF USING TEMPORARY PLACE BY THE HAWKERS OR THE VENDORS FOR SELLING THE GOODS. TOLL HAS ALSO BE EN COLLECTED FROM THE PARKING STAND AND MARKET PLACES IN RURAL AREAS THEREFORE IN OUR OPINION IT CANNOT BE DIFFERENT FROM TOLL PLAZA AS WELL AS PARKING LOT . W E THEREFORE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) SUSTAINING THE OR DER OF THE ASSESSING OFFICER FOR TREATING THE ASSESSEE IN DEFAULT IN EACH OF THE ASSESSMENT YEAR AS THE ASSESSEE FAIL S TO COLLECT THE TAX AT SOURCE FROM THESE LICENSEE . W E ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A). 11. IN THE RESULT, ALL THE APPEALS FIL ED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 28 TH SEPTEMBER, 2015 AT ALLAHABAD . SD/ - (P.K. BANSAL) AC COUNTANT MEMBER DATED: 28 / 09 /201 5 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 8 5. DR: ITAT ASSISTANT REGISTRAR