Vodafone Cellular Limited, Coimbatore V. DCIT, Coimbatore

MA 224/CHNY/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4718 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 22-07-2016
• Assessment Year: 2014-2015
• Appeal Filed On: 11-12-2015
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Section: 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , ! , ' #$ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] M.A.NOS.223 & 224/MDS/2015 [IN I.T.A.NOS.564 & 565/MDS/2015] ASSESSMENT YEAR S : 2013 - 14 & 2014 - 15 M/S VODAFONE CELLULAR LTD 1045-1046 AVINASHI ROAD COIMBATORE VS. THE DY. COMMISSIONER OF INCOME-TAX TDS CIRCLE COIMBATORE [PAN AAACB 8614 L] ( PETITIONER ) (RESPONDENT) PETITIONER BY : SHRI SALIL KAPOOR, ADVOCATE RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT / DATE OF HEARING : 22 - 07 - 201 6 / DATE OF PRONOUNCEMENT : 09 - 9 - 2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER BY THESE MISCELLANEOUS PETITIONS, THE ASSESSEE SEEKS RECTIFICATION OF THE ORDER OF THE TRIBUNAL DATED 16 .9.2015 IN I.T.A.NOS. 564 & 565/MDS/2015 DATED 16.9.2015 FOR ASSESSMENT Y EARS 2013-14 AND 2014-15. 2. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS RAISED THREE GROUNDS BEFORE THE TRIBUNAL. HOWEVER, THE TRIBUNAL ADJUDICATED ONLY GROUND NO.2 IN ITS ORDER AND FAILED TO ADJUDICATE G ROUND NOS. 1 AND 3 MP NOS.223 & 224/15 :- 2 -: RAISED BY THE ASSESSEE. HE DREW OUR ATTENTION TOW ARDS THE FOLLOWING GROUNDS RAISED BY THE ASSESSEE : 1. GROUND NO.1 THE ORDER PASSED BY THE LEARNED TDS OFFICER IS BAD IN LAW AND VOID-AB-INITIO. 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT HOLDING THAT TH E ORDER OF THE LEARNED TDS OFFICER OF TREATING THE APPELLANT AS AN 'ASSESSEE IN DEFAULT' IS BAD IN LAW IN VIEW OF THE PROVISIONS OF SECTION 201(1) READ WITH SECTION 191 OF THE ACT AND THE JUD GEMENT OF JAGRAN PRAKASHAN LIMITED VS DCIT(TDS) (21 TAXMAN.CO M 489) (ALLAHABAD HIGH COURT), AS THERE IS NO FINDING BY THE LEARNED TDS OFFICER WITH RESPECT TO THE FAILURE OF DEDUCTEES TO PAY TAXES DIRECTLY, WHICH IS A JURISDICTIONAL PRE- REQUISITE. 1.2 WITHOUT PREJUDICE TO GROUND NO 1.1 ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED IN NOT HOLDING THAT THE ORDER OF THE LEARNED TDS OFFICER IS BAD IN LAW IN SO FAR IT SEEKS TO RECOVER TAX DEMAND UNDER SECTION 201 OF THE ACT IN CONTRADICTION TO THE SETT LED PRINCIPLE ENUNCIATED BY ALLAHABAD HIGH COURT IN THE CASE OF J AGRAN PRAKASHAN LIMITED (SUPRA) THAT THE PAYER CANNOT BE HELD LIABLE FOR PAYMENT OF THE TAX DEMAND IN CASES INVOLVING NO N- DEDUCTION OF TAX AT SOURCE AND ONLY INTEREST LIABIL ITY UNDER SECTION 201 (1 A) OF THE ACT, IF ANY, CAN BE LEVIED IN SUCH CASES. 2. GROUND NO. 2 - THE APPELLANT IS NOT LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 194J OF THE ACT ON PAYMENT MAD E FOR SUPPLY OF MANPOWER 2.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)/TDS OFFICER HAS ERRED IN HOLDING THA T MANPOWER CHARGES ARE SUBJECT TO TAX DEDUCTION AT SOURCE UNDE R SECTION 194J OF THE ACT AND THUS, HOLDING THE APPELLANT TO BE AN 'ASSESSEE IN DEFAULT' FOR DEDUCTION OF TAX AT SOURC E FROM SUCH PAYMENTS UNDER SECTION 194C OF THE ACT INSTEAD OF S ECTION 194J OF THE ACT. 3. THE LD. AR FURTHER SUBMITTED THAT THE TRIBUNAL ALSO FAILED TO CONSIDER VARIOUS JUDGMENTS CITED BY THE ASSESSEES COUNSEL AT THE TIME OF HEARING OF THE ORIGINAL APPEALS. HE ALSO SUBMIT TED THAT THE TRIBUNAL MP NOS.223 & 224/15 :- 3 -: HAS WRONGLY PLACED RELIANCE ON THE JUDGMENT OF DELH I HIGH COURT IN THE CASE OF CIT VS BHARTI CELLULAR LTD, 319 ITR 139. F URTHER HE SUBMITTED THAT WRONG APPLICATION OF THE ABOVE JUDGMENT AMOUNT S TO A MISTAKE APPARENT ON RECORD WHICH REQUIRES RECALL OF THE ORD ER OF THE TRIBUNAL IN VIEW OF THE JUDGMENTS IN CIT VS RAMESH CHAND MODI, 249 ITR 323(RAJ), KUTCH SAURASHTRA STOCK EXCHANGE, 305 ITR 227(SC), HONDA SIEL POWER, 29T ITR 466(SC), CIT VS KM SUGAR MILLS, 275 ITR 247(ALLD), CIT VS KESHAV FRUIT MART, 199 ITR 771(ALLD). 4. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE TR IBUNAL CONSIDERED THE ENTIRE FACTS OF THE CASE AND PASSED A CORRECT ORDER AND THEREFORE, REQUIRES NO INTERFERENCE IN THE ORDER U/ S 254(2) OF THE ACT. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. WHILE DISPOSING OF THE APPEAL, THE TRIBUNA L CONSIDERED THE GROUNDS AS BELOW: 2. THE COMMON GROUND IN THESE TWO APPEALS ARE WITH REGARD TO THE ASSESSEE AS ASSESSEE IN DEFAULT BY OBSERVING THAT THE ASSESSEE IS LIABLE TO DEDUCT TDS U/S 194J OF THE I NCOME-TAX ACT, 1961 INSTEAD OF U/S 194C OF THE ACT FOR THE PAYMEN T MADE FOR SUPPLY OF MANPOWERS, THEREBY INVOKING THE PROVISION UNDER SECTION 201(1) AND 201(1A) OF THE INCOME TAX ACT. 6. THUS, IT MEANS THAT THE TRIBUNAL IN A CONSOLIDATED MANNER AS ARGUED BY THE LD. AR BEFORE THE TRIBUNAL ADJUDICATE D THE GROUND THAT THE ASSESSEE IS IN DEFAULT IN NON-DEDUCTING THE TD S U/S 194J OF THE ACT IN VIEW OF THE PROVISIONS OF SEC. 201(1) AND 20 1(1A) OF THE ACT. A MP NOS.223 & 224/15 :- 4 -: READING OF THE ORDER OF THE TRIBUNAL MAKES IT CLEAR THAT THERE IS NO MISTAKE ON THE PART OF THE TRIBUNAL IN GIVING A FIN DING THAT THE ASSESSEE IS IN DEFAULT. BEING SO, IT CANNOT BE SAI D THAT THE TRIBUNAL FAILED TO ADJUDICATE THE GROUND NO.1 RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL. 7. REGARDING GROUND NO.2 THAT THE ASSESSEE WAS NOT LI ABLE FOR PAYMENT OF TAX IN CASES INVOLVING NON-DEDUCTION OF TDS AND ONLY INTEREST LIABILITY U/S 201(1A) OF THE ACT TO BE LE VIED, IT WAS NOT EXPRESSLY DEALT WITH BY THE TRIBUNAL THOUGH THE TR IBUNAL PUT THE ARGUMENT OF THE LD. AR IN PARA 5.2 AT PAGE 10 OF I TS ORDER. SIMILARLY, THE TRIBUNAL HAS NOT GIVEN ANY FINDING ON GROUND NO .3 THAT WHEN THE DISTRIBUTOR HAD PAID THE TAXES ON THE RECEIPT, THE ASSESSING OFFICER SHALL GIVE THE CREDIT THEREFOR. THOUGH THE TRIBUNA L MENTIONED THE ARGUMENT OF THE LD. AR ON THIS ISSUE, BUT NO FINDIN G WAS RECORDED ON THIS ISSUE. IN OUR OPINION, THERE IS A MISTAKE APP ARENT ON THIS ISSUE. ACCORDINGLY, WE ARE OF THE OPINION THAT NO INTEREST U/S 201(1A) OF THE ACT BE CHARGED WHEN TAX HAD BEEN PAID BY THE RECIPI ENT OF THE AMOUNT. HOWEVER, THE ASSESSEE SHALL FURNISH NECES SARY DETAILS IN THIS REGARD. 8. FURTHER THE ASSESSEE ALSO MADE A PLEA BEFORE THE T RIBUNAL THAT THE JUDGMENTS REFERRED TO BY THE LD. AR WAS N OT CONSIDERED BY MP NOS.223 & 224/15 :- 5 -: THE TRIBUNAL. THIS PRAYER OF THE LD. AR IS NOT ACC EPTABLE. ALL THE SUBMISSIONS MADE BY THE ASSESSEE INCLUDING THE JUD GMENTS/DECISION REFERRED TO AND ALL THE RELEVANT DETAILS HAVE BEEN CONSIDERED BEFORE DECIDING THE APPEAL AND THE SAME HAVE BEEN MENTIONE D IN THE ORDER. BEING SO, IN OUR OPINION, THE ORDER BE READ IN A WH OLE AND NOT IN A PIECEMEAL MANNER. THE TRIBUNAL AFTER CONSIDERING T HE ENTIRE MATERIAL ON THE ISSUE, ARRIVED AT THE CONCLUSION THAT THE A SSESSEE IS LIABLE TO DEDUCT TDS U/S 194J OF THE ACT AND IN THIS FINDING ASSESSEE CANNOT FIND ANY ERROR. IF THERE IS ANY ERROR OF JUDGMENT, THE REMEDY LIES ELSEWHERE. ACCORDINGLY, THE MISCELLANEOUS PETITION S FILED BY THE ASSESSEE ARE PARTLY ALLOWED. 9. IN THE RESULT, THE BOTH THE MISCELLANEOUS PETITIONS ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH SEPTEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! ' # ) (CHANDRA POOJARI) $ / ACCOUNTANT MEMBER / CHENNAI % / DATED: 9 TH SEPTEMBER, 2016 RD &'$(! )*( / COPY TO: 1 . )!+$,- / APPELLANT 3. . ()!+$) / CIT(A) 5. (/+ &01 / DR 2. &2,- / RESPONDENT 4. . / CIT 6. 34 5$ / GF