IDEA Cellula Ltd., V. DCIT, Range-50(1),

MA 269/DEL/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6643 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2004-2005
• Appeal Filed On: 24-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH A DELHI ] BEFORE SHRI RAJPAL YADAV, JM AND SHRI K. D. RANJAN, AM MISC. APP. NO. 268 (DEL) OF 2010. A N D MISC. APP. NO. 269 (DEL) OF 2010. [ IN I. T. A. NO. 3031 (DEL) OF 2005 ]. A N D [ IN I. T. A. NO. 1875 (DEL) OF 2006 ]. ASSESSMENT YEARS : 2003-04 & 2004-05. M/S. IDEA CELLULAR LIMITED, DY. COMMISSIONE R OF INCOME-TAX, A26/5, MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, VS. C I R C L E : 50 (1), M A T H U R A R O A D, N E W D E L H I. N E W D E L H I. P A N / G I R NO. AAA CB 2100 P. ( APPLICANT ) ( RESPONDENT ) ASSESSEE BY : SHRI RONAK DOSHI, C . A.; DEPARTMENT BY : MS. BANITA DEVI, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : BOTH THESE MISC. APPLICATIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 28TH MARCH, 2008 IN RESPECT O F ASSESSMENT YEARS 2003-04 AND 2004-05 IN ITA. NOS. 3031 (DEL) OF 2005 AND 1875 (DEL) OF 2006 . THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF, FOR THE SAKE OF CONVENIENCE, BY THIS C ONSOLIDATED ORDER. 2. IT HAS BEEN SUBMITTED THAT THE ASSESSEE RAISED A N ADDITIONAL GROUND BEFORE THE TRIBUNAL STATING THAT THE DISTRIBUTORS WOULD HAVE DISCLOSED THE INCOME AND PAID TAXES THEREON AND HENCE DEDUCTION OF TDS BY THE ASSESSEE ONCE AGAIN WOULD A MOUNT TO TAXING THE SAME INCOME TWICE. ITAT IN PARA 17 HAS STATED THAT IT IS A SETTLED LAW THAT SAME INCOME CANNOT BE BROUGHT TO TAX 2 MISC. APP. NO. 268 (DEL) OF 2010 A N D MISC. APP. NO. 269 (DEL) OF 2010. TWICE. IT WAS FURTHER HELD IN THE ORDER THAT SINCE THE DISCOUNT ALLOWED BY THE ASSESSEE TO THE DISTRIBUTORS WAS NOT VISITED BY THE PROVISIONS OF S ECTION 194H THE ISSUE BECOMES OF MERE ACADEMIC INTEREST AND HENCE THE TRIBUNAL HAS NOT CO NSIDERED IT NECESSARY TO ADJUDICATE THIS GROUND. IT HAS BEEN FURTHER STATED THAT ON FURTHER APPEAL BY THE REVENUE HONBLE DELHI HIGH COURT HAS REVERSED THE DECISION OF THE ITAT WHEREBY IT HAS BEEN HELD THAT THE ASSESSEE IS LIABLE TO DEDUCT TDS UNDER SECTION 194-H ON DISCOUNT GIVEN TO PMAS. THEREFORE, AS ON DATE THE ASSESSEES ALTERNATIVE GROUND NEEDS TO BE ADJUDICAT ED. IT HAS, THEREFORE, BEEN STATED THAT NON- ADJUDICATION OF ADDITIONAL GROUND CONSTITUTES A MIS TAKE APPARENT FROM RECORD AND HENCE THE ORDER OF THE TRIBUNAL OUGHT TO BE RECALLED FOR DECISION O N MERITS. 3. DURING THE COURSE OF HEARING OF THESE MISCELLANE OUS APPLICATIONS THE LD. AR OF THE ASSESSEE SUBMITTED THAT NO DECISION ON ADDITIONAL G ROUND RAISED BY THE ASSESSEE HAS BEEN TAKEN BY HONBLE DELHI HIGH COURT. THEREFORE, THE ORDER OF THE TRIBUNAL HAS NOT MERGED IN THE DECISION OF HONBLE DELHI HIGH COURT. HE PLACED RE LIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. UTTAM CHAND JAIN 245 ITR 838 (DEL.) FOR THE PROPOSITION THAT AN ISSUE WHICH IS NOT SUBJECT MATTER OF CHALLENGE B EFORE ANY HIGHER FORUM THE DOCTRINE OF MERGER WOULD HAVE NO APPLICATION. HE ALSO PLACED RELIANCE ON THE DECISION OF ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. HYDERABAD DECCAN LIQUO R SYNDICATE 95 ITR 130 (AP). ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD TO BE RECTIFIED. IF THE ASSESSEE WAS AGGRIEVED BY THE DECISION OF TH E ITAT, HE COULD HAVE GONE IN APPEAL BEFORE HONBLE DELHI HIGH COURT OR AT THE TIME OF PLEADING , COULD HAVE RAISED THE ISSUE FOR PARTICULAR DIRECTIONS IN THE MATTER. THEREFORE, NO MISTAKE HA S BEEN COMMITTED BY THE TRIBUNAL WHILE DEALING WITH THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF HEARING OF THE MAIN APPEALS, T HE ASSESSEE RAISED AN ADDITIONAL GROUND OF APPEAL, WHICH READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT SUBMITS THAT THE CIT (A) ERRED IN NOT CONSIDERING T HE FACT THAT THE PRE-PAID SIM 3 MISC. APP. NO. 268 (DEL) OF 2010 A N D MISC. APP. NO. 269 (DEL) OF 2010. DISTRIBUTORS WOULD HAVE ALREADY DISCLOSED THEIR INC OME BY WAY OF DISCOUNT AND ALREADY PAID TAXES DUE THEREON AND HENCE DEDUCTION OF TAX AT SOURCE UNDER SECTION 194-H OF THE INCOME-TAX ACT (THE ACT) BY TH E APPELLANT ONCE AGAIN WOULD AMOUNT TO TAXING THE SAME AMOUNT OF INCOME TWICE I. E. ONCE BY WAY OF REGULAR TAXES (ADVANCE TAX, SELF ASSESSMENT TAX ETC.) FROM THE SAID PRE-PAID SIM DISTRIBUTORS AND ONCE AGAIN BY WAY OF TDS DEMANDED FROM THE APPELLANT. 5. DURING THE COURSE OF HEARING OF THE APPEAL IT WA S CONCEDED BY THE LD. AR OF THE ASSESSEE THAT THE FACT WHETHER PMAS. HAVE PAID TAX ON DISCOU NT RECEIVED BY THEM NEEDS VERIFICATION. AS SEEN FROM THE ADDITIONAL GROUND OF APPEAL REPRODUCE D ABOVE, THE ASSESSEE WAS ALSO NOT SURE WHETHER THE PRE-PAID SIM DISTRIBUTORS HAVE DISCLOSE D DISCOUNT AS THEIR INCOME AND PAID TAXES THEREON. THE GROUND WAS RAISED BY THE ASSESSEE ON P RESUMPTION THAT PRE-PAID SIM DISTRIBUTORS WOULD HAVE ALREADY DISCLOSED THEIR INCOME BY WAY OF DISCOUNT AND PAID TAXES THEREON. THE REVENUE PREFERRED APPEAL BEFORE HONBLE DELHI HIGH COURT WHEREIN HONBLE DELHI HIGH COURT AFTER DETAILED DISCUSSION HAS HELD THAT PROVISIONS OF SECTION 194-H WERE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AND THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE UNDER THIS SECTION AT THE TIME OF PAYMENT OF DISCOUNT TO PMAS. UNDER SECTION 194-H ANY PERSON NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING ON OR AFTER 1/06/2001 TO A RESIDENT, ANY INCOME BY WAY OF COMMISSION [NOT BEING INSURANC E COMMISSION REFERRED TO IN SECTION 194- D] OR BROKERAGE, SHALL AT THE TIME OF CREDIT OF SUC H INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT OF SUCH INCOME IN CASH OR BY THE IS SUE OF A CHEQUE OR DRAFT OR ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME-TAX AT THE RATE SPECIFIED IN THE SECTION FOR RELEVANT ASSESSMENT YEAR. THE PAYMENT OF DISCOUNT HAS BEEN HELD BY HONBLE DELHI HIGH COURT IN THE NATURE OF COMMISSION. PROVISIONS OF SECTION 194-H OF THE ACT ARE MANDATORY IN NATURE AND THE PAYER AT THE TIME OF PAYMENT HAS TO DEDUCT TAX AT S OURCE. MERELY BECAUSE THE DISTRIBUTORS WOULD HAVE PAID TAX ON THE AMOUNT WOULD NOT RELIEVE THE A SSESSEE FROM LIABILITY OF DEDUCTION OF TAX AT SOURCE. IN FACT THE LIABILITY TO DEDUCT TAX UNDER SECTION 194-H ARISES ON THE PAYER MUCH BEFORE THEN THE LIABILITY TO PAY ADVANCE TAX OR SELF-ASSES SMENT TAX IN THE CASE OF PAYEE THEREFORE, LIABILITY TO DEDUCT AT SOURCE CANNOT BE WAIVED ON T HE PRESUMPTION THAT THE PAYEE WILL PAY DUE 4 MISC. APP. NO. 268 (DEL) OF 2010 A N D MISC. APP. NO. 269 (DEL) OF 2010. TAXES ON THE INCOME RECEIVED BY THEM. IF THE ASSES SEE WAS AGGRIEVED BY THE ORDER OF THE ITAT IN RESPECT OF ADDITIONAL GROUND, THE ASSESSEE WOULD HA VE PREFERRED CROSS APPEAL BEFORE HONBLE DELHI HIGH COURT OR WOULD HAVE SOUGHT DIRECTIONS IN REVENUES APPEAL FOR DECIDING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. SINCE HO NBLE DELHI HIGH COURT HAS HELD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE UNDER S ECTION 194-H ON DISCOUNTS PAID, IN OUR CONSIDERED OPINION, THERE IS NO MISTAKE APPARENT FR OM RECORD, TO BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. ANY DECISION HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT AT SOURCE ON THE GROUND THAT THE DISTRIBUTORS WOULD HAVE PAID TAXES ON DISCOUNT ALLOWED BY THE ASSESSEE WOULD RUN CONTRARY TO THE DECISION OF HONBLE DELHI HIGH COUR T, WHICH IS NOT PERMISSIBLE IN LAW. THEREFORE, IN OUR CONSIDERED OPINION, THERE IS NO M ISTAKE APPARENT FROM RECORD TO BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. 6. IN THE RESULT, THE MISC. APPLICATIONS FOR BOTH T HE YEARS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON : 15 TH JULY, 2011. SD/- SD/- [ RAJPAL YADAV] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JULY, 2011. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPLICANTS. 2. RESPONDENTS. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.