THE ITO (TDS), WARD - 3(2), Vijayawada V. Project Director, Khammam

ITA 96/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1020 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Section: 201(1)

Judgement Text

ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.94 TO 96/VIZAG/2014 ( / ASSESSMENT YEARS: 2009-10 TO 2011-12) ITO (TDS), WARD - 3(2), VIJAYAWADA VS. PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY, KHAMMAM [PAN: HYDDO1513D ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.K. SETHI, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 20.07.2016 / DATE OF PRONOUNCEMENT : 22.07.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST THE COMMON ORDER OF CIT(A), VIJAYAWADA DATED 3.12.2013 FOR THE ASSESSMENT YEARS 2009-10 TO 2011-12. ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 2 2. FACTS ARE IN BRIEF THAT THERE WAS A SURVEY CONDU CTED IN THE CASE OF THE ASSESSEE AND DURING THE COURSE OF THE SURVEY AN D SUBSEQUENT PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE DEDUCTO R HAS MADE PAYMENTS TO VARIOUS TRAINING CENTRES AND ALSO MADE PAYMENTS TOWARDS CATERING CHARGES, VEHICLE HIRE CHARGES, RENT, ADVER TISEMENT AND OUTSOURCING AGENCIES AND FAILED TO EFFECT THE TDS O N THESE PAYMENTS AS REQUIRED UNDER THE INCOME TAX ACT, 1961 (HEREINAFTE R CALLED AS THE ACT). 3. THE ASSESSING OFFICER IN HIS ORDER HAS OBSERVED THAT THE ASSESSEE DEDUCTOR HAS FAILED TO DEDUCT THE TAX ON THE ABOVE PAYMENTS AND REMIT THE SAME INTO THE GOVERNMENT ACCOUNT WITHIN THE STI PULATED TIME AS PER THE PROVISIONS OF SECTION 201(1) OF THE ACT. A SHO W CAUSE NOTICE DATED 1.3.2011 WAS ISSUED TO THE ASSESSEE DEDUCTOR. THER E WAS NO COMPLIANCE FROM THE ASSESSEE. ANOTHER LETTER WAS I SSUED TO THE ASSESSEE DEDUCTOR ON 21.3.2011 CALLING FOR HIS OBJE CTIONS, IF ANY. THE PROJECT DIRECTOR FILED HIS REPLY ON 22.3.2011. THE REAFTER, THE A.O. HAS OBSERVED THAT PROJECT DIRECTOR, DRDA, KHAMMAM IS RE SPONSIBLE FOR MAKING THE PAYMENTS AND HE HAS TO DEDUCT THE TDS AN D REMIT THE SAME TO THE GOVERNMENT ACCOUNT WITHIN THE STIPULATED TIM E AND THESE PROVISIONS ARE APPLICABLE IRRESPECTIVE OF NATURE AN D MODALITIES OF THE ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 3 PROGRAMME BEING IMPLEMENTED AND HELD THAT SINCE THE ASSESSEE DEDUCTOR FAILED TO DEDUCT THE TDS AND REMIT THE SAM E INTO THE GOVERNMENT ACCOUNT, HE IS DEEMED TO BE AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND LIABLE TO SUCH TDS DEMAND AND MANDATORY INTEREST U/S 201(1A) OF THE ACT FOR HIS DEFAULT FOR FINANCIAL YEAR 2008-09 TO FINANCIAL YEAR 2010-11. ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE CIT(A) AND IT WAS SUBMITTED BEFORE THE LD. CIT(A) T HAT THE PAYEES HAVE ALREADY INCLUDED THE AMOUNTS RECEIVED FROM DRDA IN THEIR INCOME AND PAID TAXES ON THE SAME AND SUBMITTED THAT COLLECTIN G THE TAX AGAIN FROM THE PAYEES AMOUNTS TO DOUBLE TAXATION, WHICH IS UNJ UST. THE LD. CIT(A) BY CONSIDERING EXPLANATION OF THE ASSESSEE DIRECTED THE A.O. TO VERIFY THE SAME AND GRANT THE RELIEF. THE RELEVANT ORDER OF THE CIT(A) IS EXTRACTED AS UNDER: I HAVE CAREFULLY GONE THROUGH THE ORDER OF THE ASSE SSING OFFICER, STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BY THE APPELLA NT. THE MAIN CONTENTION OF THE APPELLANT IS THAT IT HAS NOT DEDUCTED TDS AS THE PA YMENTS ARE MADE FOR EXECUTION OF GOVERNMENT SOCIAL WELFARE PROGRAMME. THE APPELLANT HAS ALSO CONTENDED THAT ALL THE PAYEES ARE INCOME TAX ASSESSEES AND THE PAYMENT S MADE WERE DECLARED IN THEIR TAX RETURNS. IN VIEW OF THE SAME AND TAKING INTO CO NSIDERATION THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES (P) LTD. VS. CIT (2007) 293 ITR 226, THE ASSESSING OFFICER IS DIRECTED TO GIVE RELIEF, WHEREVER THE APPELLANT IS ABLE TO PROVE THAT THE AM OUNTS PAID HAVE ALREADY BEEN DECLARED BY THE RECIPIENTS IN THEIR RETURNS OF INCO ME. IN THIS REGARD, THE APPELLANT MAY OBTAIN AND PRODUCE THE RELEVANT DETAILS BEFORE THE ASSESSING OFFICER FOR NECESSARY VERIFICATION AND THEREAFTER THE RELIEF MA Y BE GIVEN ACCORDINGLY. 4. ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER I N APPEAL BEFORE THE TRIBUNAL. ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 4 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. PASSED ORDER U/S 201(1) & 201(1A) OF THE ACT O N THE GROUND THAT ASSESSEE DEDUCTOR FAILED TO EFFECT THE TDS AND REMI T THE SAME INTO THE GOVERNMENT ACCOUNT ON VARIOUS PAYMENTS MADE BY THE ASSESSEE. THE CASE OF THE A.O. IS THAT THE ASSESSEE IS DEEMED TO BE AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT AND ALSO LIABLE TO SU CH TDS DEMAND AND MANDATORY INTEREST U/S 201(1A) OF THE ACT. THE A.O . ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE CALLING FOR THE OBJECT IONS, IF ANY. IT APPEARS FROM THE ASSESSMENT ORDER THAT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE A.O., ASSESSEE HAS FILED OBJEC TIONS ON 22.3.2011. IT IS NOT ON THE RECORD THAT WHAT ARE THE OBJECTIONS R AISED AND EXPLANATION GIVEN BY THE ASSESSEE. HOWEVER, THE A.O. HAS CONSI DERED THE EXPLANATION OF THE ASSESSEE AND HELD THAT ASSESSEE IS IN DEFAULT OF SECTION 201(1) & ALSO 201(1A) OF THE ACT. ON APPEA L, THE LD. CIT(A) REMITTED THE MATTER BACK TO THE A.O. TO VERIFY THE NECESSARY DETAILS AND DIRECTED TO GRANT THE RELIEF. WE FIND THAT WHAT IS THE SPECIFIC EXPLANATION BY THE ASSESSEE IS NOT AVAILABLE FROM THE ORDER OF THE A.O. EVEN THE LD. CIT(A) HAS NOT DISCUSSED ANYTHING ABOUT THE EXPLANA TION GIVEN BY THE ASSESSEE BEFORE THE A.O. THE LD. CIT(A) ONLY CONSI DERED THE EXPLANATION GIVEN BY THE ASSESSEE THAT ALL THE PAYE ES ARE INCOME TAX ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 5 ASSESSEES AND THE PAYMENTS MADE WERE DECLARED IN TH EIR TAX RETURNS AND KEEPING IN VIEW OF THE DECISION IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES PVT. LTD. VS. CIT (2007) 293 ITR 226 (SC) , THE LD. CIT(A) DIRECTED THE A.O. TO GRANT RELIEF AFTER VERIFICATIO N. WE FIND THAT NEITHER A.O. NOR CIT(A) HAS DEALT THE ISSUE PROPERLY. WE F IND THAT THE LD. CIT(A) WITHOUT CONSIDERING THE ORDER PASSED BY THE A.O. SIMPLY REMITTED MATTER BACK TO THE A.O. TO FOLLOW THE JUDGEMENT OF THE HONBLE SUPREME COURT DECISION IN THE CASE OF HINDUSTAN COCA COLA B EVERAGES PVT. LTD. (SUPRA). IN VIEW OF THE ABOVE, WE SET ASIDE THE OR DER PASSED BY THE LD. COMMISSIONER AND DIRECT THE A.O. TO EXAMINE THE DET AILS OF THE DEDUCTEES WHETHER THEY PAID TAXES AS PER THE PROVIS IONS OF LAW AND ALSO EXAMINE THE ISSUE OF INTEREST U/S 201(1A) OF THE AC T AND DECIDE THE ISSUE DE-NOVO IN ACCORDANCE WITH LAW, KEEPING IN VI EW OF THE DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT. LTD. (SUPRA). 6. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JUL16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 22.07.2016 ITA NOS.94 TO 96/VIZAG/2014 PROJECT DIRECTOR, DISTRICT RURAL DEVELOPMENT AGENCY , KHAMMAM 6 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO(TDS), WARD-3(2), VIJAYAW ADA 2. / THE RESPONDENT PROJECT DIRECTOR, DISTRICT RURA L DEVELOPMENT AGENCY, SANKSHEMA BHAVAN, BURHANPUR, KHAMMAM 3. ) / THE CIT(TDS), HYDERABAD 4. ) / THE CIT, VIJAYAWADA 5. ) ( ) / THE CIT(A), VIJAYAWADA 6. ! - , - , ! / DR, ITAT, VISAKHAPATNAM 7 . / GUARD FILE / BY ORDER // TRUE COPY // 01 - (SR.PRIVATE SECRETARY) - , ! / ITAT, VISAKHAPATNAM