ACIT, Trichy V. K.Udhayakumaran, Trichy

ITA 917/CHNY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3915 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAGHAVAN RAMABADRAN
• Assessee Lawyers: M SRINIVASA RAO CIT
• Keywords: Retrospective amendment; TDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , ( BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.917,918,919 & 920/CHNY/2014 /ASSESSMENT YEARS: 2011-12,2012-13 M/S.SUTHERLAND GLOBAL SERVICES PVT LTD ., GATEWAY OFFICE PARKS,2 ND FLOOR BLDG., NO.B2,NO.16,GST ROAD, PERUNGALATHUR, CHENNAI 600 063. VS. INCOME TAX OFFICER, INTERNATIONAL TAXATION-II, CHENNAI. [ PAN: AAACM 4454 H ] ( * /APPELLANT) ( +,* /RESPONDENT) * - / APPELLANT BY : MR.RAGHAVAN RAMABADRAN, C.A +,* - /RESPONDENT BY : MR.M.SRINIVASA RAO,C.I.T DR - /DATE OF HEARING : 22.08.2019 - /DATE OF PRONOUNCEMENT : 22.08.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THESE FOUR APPEALS FILED BY THE ASSESSEE AGAINST T HE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, CH ENNAI, IN ITA NO. 886-889/13-14 DATED 03.02.2014 FOR ASSESSMENT YEARS 2011-12 & 2012-13 HOLDING THAT ASSESSEE IS IN DEFAULT U/S.201 (1) AND 201(1A) OF THE ITA NOS.917 TO 920/CHNY/2014 :- 2 -: ACT IN RESPECT OF TAXABILITY OF SOFTWARE BANDWIDTH AND REIMBURSEMENT OF EXPENSES. 2. MR.RAGHAVAN RAMABADRAN REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.M.SRINIVASA RAO REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY LD.AR THAT THESE APPEALS HA D ORIGINALLY BEEN DISPOSED OFF BY THE COMMON ORDER OF TRIBUNAL DATED 15/02/2016. HOWEVER, AS THE GROUND NO.5 IN THESE APPEALS HAD NO T BEEN ADJUDICATED, MISCELLANEOUS PETITION HAD BEEN FILED AND VIDE ORDE R DATED 09.03.2018 IN M.P. NOS.140,141,142 & 143/CHNY/2016, THESE APPEALS HAD BEEN RECALLED FOR THE PURPOSE OF ADJUDICATING GROUND NO.5 OF THE ASSESSEES APPEALS. IT WAS SUBMITTED THAT THE APPEALS WERE SPECIFICALLY AG AINST LEVY U/S.201(1) AND 201(1A) OF THE ACT. THE APPEALS IN ITA NOS.917/ CHNY/2014 AND ITA NO.919/CHNY/2014 WERE APPEALS AGAINST THE LEVY OF I NTEREST U/S.201(1A) OF THE ACT FOR THE ASSESSMENT YEARS 2011-12 & 2012- 13 AND CONSEQUENTLY, GROUND NO.5 IN THE SAID APPEALS WAS INFRUCTUOUS. TH EREFORE, GROUND NO.5 IN THE SAID APPEALS WAS NOT PRESSED. THE LD.AR HAS ENDORSED THE WITHDRAWAL OF THE SAID GROUND IN THE MEMORANDUM OF GROUNDS OF APPEALS. 4. CONSEQUENTLY, GROUND NO.5 RELATING TO LEVY OF I NTEREST U/S.201(1A) OF THE ACT IN APPEALS OF ASSESSEE IN ITA NOS.917 & 919/CHNY/2014 STAND DISMISSED AS WITHDRAWN. ITA NOS.917 TO 920/CHNY/2014 :- 3 -: 5. GROUND NOS.5 IN THE APPEALS OF THE ASSESSEE IN ITA NOS.918 & 920/CHNY/2014 RELATING TO THE ASSESSMENT YEARS 2011 -12 & 2012-13 BEING APPEALS AGAINST THE LEVY OF INTEREST U/S.201( 1A) OF THE ACT. IT WAS SUBMITTED BY LD.AR THAT THE LIABILITY TO DEDUCT TDS HAD COME INTO EFFECT ON ACCOUNT OF RETROSPECTIVE AMENDMENT TO SECTION-9 OF THE ACT BY THE FINANCE ACT, 2012, WHICH CAME INTO EFFECT ON 28.05. 2012. IT WAS A SUBMISSION THAT THIS WAS AN UNEXPECTED AMENDMENT AN D IN RETROSPECTIVE AMENDMENT, INTEREST WAS NOT LEVIABLE AS HAS BEEN HE LD BY THE HONBLE SUPREME COURT IN THE CASE OF M/S.STAR INDIA PVT LTD . VS. CCE IN [2006] 150 TAXMAN 128(SC) WHEREIN UNDER THE CENTRAL EXCIS E LAW, IT HAD BEEN CLEARLY HELD BY THE HONBLE SUPREME COURT THAT WHIL E IT IS WELL ESTABLISHED THAT WHILE IT IS PERMISSIBLE FOR THE LEGISLATURE TO RETROSPECTIVELY LEGISLATE, SUCH RETROSPECTIVITY IS NORMALLY NOT PERMISSIBLE TO CREATE AN OFFENCE RETROSPECTIVELY. THE LIABILITY TO PAY INTEREST WOUL D ONLY ARISE ON DEFAULT AND IS REALLY IN THE NATURE OF A QUASI-PUNISHMENT. SUCH LIABILITY, THOUGH CREATED RETROSPECTIVELY, COULD NOT ENTAIL THE PUNIS HMENT OF PAYMENT OF INTEREST WITH RETROSPECTIVE EFFECT. 6. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE OR DER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS IT IS NOTICED THE AMENDMEN T TO SECTION-9 HAS BEEN MADE RETROSPECTIVELY BY THE FINANCE ACT, 2012 AND AS IT IS NOTICED THAT THE LIABILITY TO DEDUCT TDS CAME ON ACCOUNT OF RETROSPECTIVE AMENDMENT, WHICH HAS LED TO THE LEVY U/S.201 OF THE ACT, WE ARE OF THE ITA NOS.917 TO 920/CHNY/2014 :- 4 -: VIEW THAT FOLLOWING THE PRINCIPLES LAID DOWN BY TH E HONBLE SUPREME COURT IN THE CASE OF M/S.STAR INDIA (P) LTD., REFERRED TO SUPRA, THE LIABILITY OF INTEREST U/S.201(1A) OF THE ACT COULD NOT BE FASTEN WITH ASSESSEE IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN M/S.STAR INDIA (P) LTD., REFERRED TO SUPRA. IN THE CIRCUMST ANCES, GROUND NO.5 IN THE APPEALS OF THE ASSESSEE IN ITA NOS.918 & 920/CH NY/2014 STANDS ALLOWED. 8. TO SUM UP, THE APPEALS OF THE ASSESSEE IN ITA N OS.917 & 919/CHNY/2014 ARE DISMISSED AS WITHDRAWN AND THE AP PEALS OF THE ASSESSEE IN ITA NOS.918 & 920/CHNY/2014 ARE ALLOWED . ORDER PRONOUNCED ON 22 ND AUGUST, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 4 /DATED: 22 ND AUGUST, 2019. K S SUNDARAM - +56 76 /COPY TO: 1. * /APPELLANT 4. 8 /CIT 2. +,* /RESPONDENT 5. 6 + /DR 3. 8 ( ) /CIT(A) 6. /GF