M/s. IBM India Private Limited, Bangalore V. Assistant Commissioner of Income-Tax,TDS, Circle2(1), Bangalore

MA 339/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8102 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDAPPAJI R N
• Keywords: Question of law
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE B BENCH, BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI A.K.GARODIA, ACCOUNANT MEMBER [MP NO. 339 TO 348/BANG/2018 (IN ITA NO. 2263 TO 2272/BANG/2016)] (ASSESSMENT YEARS : 2010 11 TO 2014 15) M/S. IBM INDIA PRIVATE LIMITED, APPELLA NT NO. 12, SUBRAMANYA ARCADE, BANNERGHATTA MAIN ROAD, BANGALORE 560029. PAN: AAACI4403L VS ACIT, TDS CIRCLE 2 (1), RESPO NDENT BANGALORE. ASSESSEE BY : SHRI SHARATH RAO, C. A. REVENUE BY : SHRI SIDAPPAJI R. N., ADDL. CIT DR DATE OF HEARING : 21-12-2018 DATE OF PRONOUNCEMENT : 26-12-2018 O R D E R PER A. K. GARODIA, A.M.: ALL THESE TEN M. P. ARE FILED BY THE ASSESSEE AND IT IS STATED IN THESE M. PS. THAT THERE ARE CERTAIN APPARENT MISTAKES IN THI S COMBINED TRIBUNAL ORDER FOR FIVE ASSESSMENT YEARS IN RESPECT OF ISSUES U/S 201 (1) AND SECTION 201 (1A). ALL THESE M. PS. WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. IN RESPECT OF FIVE APPEALS U/S 201 (1), IT WAS S UBMITTED BY THE A.R. OF THE ASSESSEE THAT DEMAND IN THESE FIVE YEARS WERE R AISED U/S 201 (1A) ONLY AND NO DEMAND WAS RAISED BY THE AO U/S 201 (1) BUT STILL, THE ASSESSEE FILED THESE APPEALS U/S 201 (1) TO SUPPORT ITS CLAIM THAT NO DEMAND FOR INTEREST CAN BE RAISED U/S 201 (1A) ALSO BECAUSE AS PER THE ASSESSEE, THE ASSESSEE WAS NOT AN ASSESSEE IN DEFAULT ON MAKING OF PROVISI ON ONLY WITHOUT RECEIVING THE BILLS AND ON RECEIVING THE BILLS, TDS WAS DEDUC TED AND PAID. HE SUBMITTED THAT THIS ASPECT ONLY MAY BE DECIDED AGAI NST THE ASSESSEE THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS LIAB LE FOR INTEREST U/S 201 (1A) BUT AS PER PARA 6 OF THE IMPUGNED TRIBUNAL ORDER, T HE TRIBUNAL HAS HELD THAT THE ISSUE REGARDING TDS U/S 201 (1) IS ALSO DECIDED AGAINST THE ASSESSEE AND MP NO. 339 TO 348/BANG/2018 2 IT MAY BE UNDERSTOOD IN THIS SENSE THAT SUCH DEMAND U/S 201 (1) IS CONFIRMED. HE SUBMITTED THAT THIS IS AN APPARENT MI STAKE AND IT SHOULD BE RECTIFIED U/S 254 (2). LEARNED DR OF THE REVENUE AL THOUGH SUBMITTED THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER BUT HE CO ULD NOT POINT OUT ANY MISTAKE IN THESE SUBMISSIONS OF THE LEARNED AR OF T HE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT AS PER THE ORDER PASSED BY THE AO FOR THE ASSESSMENT YEAR 2010 11, HE HAS RAISED A DEMAND OF RS. 92,07,554/- U/S 201 (1A) AND NO DEMAN D IS RAISED U/S 201 (01). SIMILARLY, IN REMAINING FOUR YEARS ALSO, DEMA ND IS RAISED ONLY U/S 201 (1A) AND NO DEMAND IS RAISED U/S 201 (1). HENCE, WE ARE SATISFIED THAT THE FOLLOWING OBSERVATION OF THE TRIBUNAL IN PARA 6 OF THE IMPUGNED TRIBUNAL ORDER IS UNNECESSARY AND IT MAY LEAD TO SOME CONFUS IONS.- IN THE PRESENT YEARS, NO SUCH REPORT OF THE AO IS BROUGHT ON RECORD TO SHOW THAT TDS IS DEDUCTED IN LATER YEARS AT THE TIME OF PAYMENT AND REMITTED TO GOVT. ACCOUNT OR WHERE PAYMENT WAS NOT MADE, THE PROVISION OF EXPENSES WAS WRITTEN BACK AND CREDITED TO P & L ACCOUNT. HENCE, THE ASSESSEE CANNOT GET ANY RELIEF IN THE PRESENT YEARS ON SIMILAR LINE. RATHER ONE THING STANDS ADMITTED THAT THE LIABILITY OF THE ASSESSEE IS THERE FOR TDS AND SINCE, THIS LIABILITY IS NOT DISCHARGED IN THE PRESENT YEARS OR IN ANY SUBSEQUENT YEAR, THE ISSUE REGARDING TDS U/S 201 (1) IS ALSO DECIDED AGAINST THE ASSESSEE AND ACCORDINGLY, WE DISMISS ALL TEN APPEALS OF THE ASSESSEE REGARDING DEMANDS U/S 201 (1) AS WELL AS LEVY OF INTEREST U/S. 201(1A) OF IT ACT. 4. PARA 3.2 OF THE M. P. IS AS UNDER AND AS PER THE SAME, THE ASSESSEE STATES THAT THERE IS SECOND MISTAKE IN THE IMPUGNED TRIBUNAL ORDER.:- 3.2. INCORRECT OBSERVATION BY THE HON'BLE TRIBUNAL THAT THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE PETITIONER'S OWN CASE FOR THE AY 2006-07 TO AY 2009 -10 WOULD BE CONSIDERED AS THE FINAL FOR THE PURPOSES OF APPL YING THE PROVISIONS OF SECTION 158A OF THE ACT TO THE SUBJEC T APPEAL FOR THE AY 2010-11 IN THIS CONTEXT, THE HON'BLE TRIBUNAL AT PARAGRAPH 6 HAS NOTED AS UNDER - 6.. WE ALSO HOLD THAT THE ASSESSEE'S CLAIM U/S. 1 58A(3) IS ADMITTED AND THEREFORE, THE ASSESSEE SHALL NOT BE E NTITLED TO MP NO. 339 TO 348/BANG/2018 3 RAISE ANY QUESTION OF LAW IN THE PRESENT FIVE YEARS BEFORE HON'BLE KARNATAKA HIGH COURT U/S. 260A OF IT ACT AN D WHEN THE DECISION ON THE QUESTIONS OF LAW IN ASSESSMENT YEARS 2006- 07 TO 2009-10 BECOMES FINAL, IT SHALL BE APPLIED TO THE PRESENT 5 YEARS ALSO I.E. ASSESSMENT YEARS 2010-11 TO 2014- 15. ACCORDINGLY IF THE ASSESSEE GETS ANY RELIEF IN THOS E FOUR YEARS I.E. ASSESSMENT YEARS 2006-07 TO 2009-10, THE PRESE NT ORDER SHOULD BE AMENDED BY THE TRIBUNAL {IN CONFORMITY WI TH SUCH DECISION OF HON'BLE KARNATAKA HIGH COURT IN ASSESSM ENT YEARS 2006-07 TO 2009-10.'} GIVEN THE ABOVE, WE HUMBLY WISH TO SUBMIT THAT, WHI LE IN THE INITIAL PART, IT IS NOTED THAT WHEN THE DECISION ON THE QUESTIONS OF LAW RAISED IN AY 2006-07 TO AY 2009-10 BECOMES F INAL, IT SHALL BE APPLIED TO THE SUBJECT AY 2010-11 TO AY 20 14-15, IN THE LATTER PART OF THE SENTENCE, THE FINALITY OF TH E DECISION HAS BEEN LINKED TO THE DECISION OF THE HON'BLE KARNATAK A HIGH COURT ('KHC') IN THE PENDING CASE FOR THE AY 2006-0 7 TO AY 2009-10. IT MAY SO HAPPEN THAT THE DECISION OF THE KHC MAY BE APPEALED BEFORE THE HON'BLE SUPREME COURT EITHER BY THE PETITIONER OR THE REVENUE. THEREFORE, IF SUCH AN AP PEAL IS PREFERRED, THEN THE DECISION IN THE EARLIER YEARS, IE AY 2006-07 TO AY 2009-10, BECOMES FINAL BASED ON THE DECISION OF THE HON'BLE SUPREME COURT. ACCORDINGLY, WE WISH TO SUBM IT THAT THE FINAL DECISION NEED NOT THEREFORE BE RESTRICTED ONLY TO THE DECISION OF THE KHC. ASPECT OF AMENDMENT OF ORDERS BASED ON 'FINAL DECIS ION' IS DEALT WITH IN SECTION 158A(5) OF THE ACT. THEREFORE , THE PETITIONER HUMBLY PRAYS TO YOUR HONOURS TO KINDLY A MEND THE ORDER DATED JULY 20, 2018 PASSED UNDER SECTION 254( 2) OF THE ACT AND REPLACE THAT PORTION OF PARAGRAPH 6 ABOVE, AS IS MENTIONED IN THE BRACKETS, WITH THE BELOW - .WHEN THE DECISION ON THE QUESTION OF LAW FOR THE AY 2006- 07 AY 2009-10 BECOMES FINAL, IN ACCORDANCE WITH SEC TION 158A(5) OF THE ACT...' 5. LEARNED AR OF THE ASSESSEE SUBMITTED THAT FINALI TY OF DECISION ON THE ISSUE IN DISPUTE IS NOT ATTAINED AS PER THE JUDGMEN T OF HONBLE HIGH COURT AND IF THE MATTER IS CARRIED TO HONBLE APEX COURT BY ANY SIDE THEN THE ISSUE GETS FINALITY BASED ON THE DECISION OF HONBLE APEX COURT AND THEREFORE, THIS IS AN APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORD ER WHICH SAYS THAT THE TRIBUNAL SHALL AMEND THE TRIBUNAL ORDER IN CONFORMI TY WITH SUCH DECISION OF HONBLE KARNATAKA HIGH COURT IN A. YS. 2006 07 TO 2009 10. HE SUBMITTED THAT THIS PORTION OF PARA 6 OF THE IMPUGN ED TRIBUNAL ORDER SHOULD ALSO BE SUITABLY AMENDED. LEARNED DR OF THE REVENUE ALTHOUGH SUBMITTED MP NO. 339 TO 348/BANG/2018 4 THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER ON T HIS ASPECT ALSO BUT HE COULD NOT POINT OUT ANY MISTAKE IN THESE SUBMISSION S OF THE LEARNED AR OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D FORCE IN THIS SUBMISSION OF THE LEARNED AR OF THE ASSESSEE ALSO. HENCE, WE HOLD THAT PARA 6 OF THE IMPUGNED TRIBUNAL ORDER IS SUBSTITUTED BY THE FOLLOWING PARA 6 AND THIS WILL TAKE CARE OF BOTH MISTAKES POINTED OUT BY THE ASSESSEE IN THESE M. PS. THIS PARA 6 OF THE IMPUGNED TRIBUNAL ORDER SHOU LD READ AS UNDER:- 6. FROM THE ABOVE PARAS, IT IS SEEN THAT IN THOSE YEARS, THE TRIBUNAL HAS CONSIDERED A REPORT OF THE AO AS PER W HICH, IT WAS REPORTED BY THE AO THAT THE ASSESSEE HAS IN SUBSEQU ENT YEAR EITHER DEDUCTED TAX AT THE TIME OF PAYMENT OR ADDED BACK THE RELEVANT EXPENDITURE IN P & L ACCOUNT. IT IS ALSO R EPORTED THAT WHEREVER TDS WAS DEDUCTED IN SUBSEQUENT YEAR, THE S AME WAS REMITTED TO GOVT. ACCOUNT. BASED ON THIS REPORT OF THE AO, THE TRIBUNAL IN THOSE YEARS HELD THAT THE DEMAND U/S 20 1 (1) DOES NOT SURVIVE AND CONFIRMED THE DEMANDS U/S 201 (1A) ONLY. IN THE PRESENT YEARS, EVEN IN THE ORDERS PASSED BY THE AO U/S 201 (1) AND 201 (1A), NO DEMAND IS RAISED BY THE AO U/S 201 (1) AND HENCE, NO DECISION IS CALLED FOR IN RESPECT OF DEMA ND U/S 201 (1) AND WE HOLD THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE IS LIABLE FOR INTEREST U/S 201 (1A ) IN SPITE OF THIS FACT THAT NO DEMAND IS RAISED BY THE AO U/S 201 (1). THE ISSUE R EGARDING CHARGEABILITY OF INTEREST U/S 201 (1A) IS COVERED A GAINST THE ASSESSEE. ACCORDINGLY, ALL TEN APPEALS OF THE ASSES SEE ARE DISMISSED. WE ALSO HOLD THAT THE ASSESSEES CLAIM U /S. 158A (3) IS ADMITTED AND THEREFORE, ASSESSEE SHALL NOT BE ENTIT LED TO RAISE ANY QUESTION OF LAW IN THE PRESENT FIVE YEARS BEFOR E HON'BLE KARNATAKA HIGH COURT U/S. 260A OF IT ACT AND WHEN T HE DECISION ON THE QUESTIONS OF LAW IN ASSESSMENT YEARS 2006-07 TO 2009-10 BECOMES FINAL, IT SHALL BE APPLIED TO THE PRESENT 5 YEARS ALSO I.E. ASSESSMENT YEARS 2010-11 TO 2014-15. ACCORDINGLY I F THE ASSESSEE GETS ANY RELIEF IN THOSE FOUR YEARS I.E. A SSESSMENT YEARS MP NO. 339 TO 348/BANG/2018 5 2006-07 TO 2009-10 AS PER THE JUDGMENT OF HONBLE K ARNATAKA HIGH COURT OR AS PER THE JUDGMENT OF HONBLE APEX C OURT IF MATTER IS CARRIED BEFORE HONBLE APEX COURT BY ANY SIDE, THEN THE PRESENT ORDER SHOULD BE AMENDED BY THE TRIBUNAL IN CONFORMITY WITH THE FINAL DECISION IN THOSE FOUR YEARS I.E. A. Y. 2006 07 TO 2009 10 AS PER THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT OR OF HONBLE APEX COURT AS THE CASE MAY BE. 7. IN THE RESULT, ALL THESE 10 M. PS. FILED BY THE ASSESSEE ARE ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF H EARING ON THE COMPLETION OF HEARING. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.