DCIT TDS ( CIR ) THANE, V. BSNL,

MA 628/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0325 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 05-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B S IRANI
• Section: 260A; 201(1); 154

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , ,, , , ! ! ! ! '# $% '# $% '# $% '# $% , ,, , & & & & ' ' ' ' BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER (!(! !) . / M.A. NO.628/MUM./2012 . / ITA NO. 6646/MUM./2010 +,# - ( &) . !/. / ASSESSMENT YEAR : 200506 ) INCOME TAX OFFICER (TDS) VARDAAN, 9 TH FLOOR, MIDC WAGHLE INDUSTRIAL ESTATE, THANE .. 01 / APPLICANT ) V/S BHARAT SANCHAR NIGAM LIMITED KALYAN DIVISION, O/O PGMT KALYAN BHARAT SANCHAR NIGAM LTD. MUMBAI B.S. INDANI (ADVOCATE / TAX CONSULTANT) 228/229, AKSHAY DEEP PLAZA TOWER CENTRE CIDCO, AURANGABAD .... 2301 / RESPONDENT 0 ./ PERMANENT ACCOUNT NUMBER PNEMI0438B ! 5 6 / REVENUE BY : MR. NEERAJA PRADHAN &) .7# 5 6 / ASSESSEE BY : MR. B.S. IRANI )! 5 # / DATE OF HEARING 12.04.2013 $ 8/ 5 # / DATE OF ORDER 17.05.2013 $ $ $ $ / ORDER '# $% '# $% '# $% '# $% , ,, , & & & & 9 9 9 9 / PER AMIT SHUKLA, J.M. BY WAY OF THIS MISCELLANEOUS APPLICATION, THE REVEN UE SEEKS RECTIFICATION OF THE ORDER DATED 12 TH SEPTEMBER 2012, PASSED BY THE TRIBUNAL IN ASSESSEE S APPEAL IN ITA NO.2901/MUM./2011. BHARAT SANCHAR NIGAM LIMITED 2 2. THE MAIN CONTENTION RAISED BY THE REVENUE IN THE SA ID APPLICATION IS THAT THE TRIBUNAL, WHILE ADJUDICATING THE ISSUE OF SHORT DED UCTION OF TAX AND LEVY OF INTEREST UNDER SECTIONS 201(1) AND 201(1A) HAS DECIDED THE I SSUE MAINLY IN RESPECT OF TDS LIABILITY OF THE ASSESSEE UNDER SECTION 194H AND HA S NOT CONSIDERED SIMILAR NON DEDUCTION / SHORT DEDUCTION OF TDS UNDER SECTION 19 4J, AS THE ASSESSING OFFICER HAS WORKED OUT THE SHORT DEDUCTION ALONG WITH THE INTER EST WITH REGARD TO LIABILITY BOTH UNDER SECTIONS 194H AND 194J. 3. FACTS IN BRIEF : THE ASSESSING OFFICER, VIDE HIS ORDER DATED 30 TH MARCH 2009, PASSED UNDER SECTIONS 201(1) AND 201(1A) HAS HELD T HAT THERE WAS NO DEDUCTION OF TAX IN RESPECT OF VARIOUS PAYMENTS MADE ON ACCOUNT OF COMMISSION PAID BY BSNL TO PRIVATE LOCAL PCO HOLDERS AND STD/ISD PCO HOLDERS U NDER SECTION 194H. BESIDES THIS, HE HAS ALSO HELD THAT THERE WAS NONDEDUCTION OF TAX ON PAYMENT MADE TO CELLULAR OPERATORS, BASIC SERVICE OPERATORS AND FOR REPAIR & MAINTENANCE OF PLANTS FOR WHICH THE ASSESSEE WAS LIABLE TO DEDUCT TDS UND ER SECTION 194J. HE CALCULATED THE TOTAL SHORT DEDUCTION AND INTEREST ON BOTH THE COUNTS FOR SUMS AGGREGATING TO ` 3,02,89,836. THE BREAK UP OF INTEREST AND SHORT DED UCTION HAS BEEN INCORPORATED BY THE ASSESSING OFFICER AT PAGES9 AND 10 OF THE ORDE R. THEREAFTER, THE ASSESSEE HAS FILED A PETITION UNDER SECTION 154 FOR RECTIFICATIO N OF CERTAIN MISTAKE IN THE CALCULATION. IN PURSUANCE THEREOF, THE ASSESSING OF FICER, VIDE ORDER DATED 24 TH APRIL 2009, HAS FINALLY WORKED OUT THE SHORT DEDUCTION AL ONG WITH THE INTEREST IN THE FOLLOWING MANNER: SL. NO. NATURE OF EXPENDITURE TAX SOUGHT TO BE DEDUCTED U/S 194H ( ` ) INTEREST U/S 201(1A) ( ` ) TOTAL ( ` ) 1. COMMISSION TO PRIVATE LOCAL PCO 194H 72,83,839 34,96,242 1,07,80,081 2. COMMISSION TO PRIVATE STD / ISD / PCOS 194H 93,24,446 44,75,734 1,38,00,180 3. PAYMENT TO OTHER CELLULAR OPERATORS 194J 3,05,334 1,46,560 4,51,894 4. PAYMENT TO BASIC SERVICE OPERATORS 194J 5,62,519 2,70,009 8,32,528 5. REPAIRS AND MAINTENANCE TO APPARATUS AND PLANT 194J 1,21,950 58,536 1,80,486 TOTAL: 1,75,98,088 84,47,081 2,60,45,169 BHARAT SANCHAR NIGAM LIMITED 3 THUS, THE AMOUNT OF ` 2,60,45,169, CONSISTED OF DEMAND ARISING OUT OF TDS LIABILITY UNDER SECTIONS 194H AND 194J. 4. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS)II, THANE. THE LEARN ED COMMISSIONER (APPEALS), IN HIS ORDER, HAS DISCUSSED, MAINLY THE ISSUE OF PAYME NT OF COMMISSION TO VARIOUS STD/ISD/PCO HOLDERS UNDER SECTION 194H AND NO FINDI NG WAS RECORDED ON 194J. IN THE FINAL CONCLUSION, THE LEARNED COMMISSIONER (APP EALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR CONFIRMING THE SHORT D EDUCTION ALONG WITH THE INTEREST FOR THE ENTIRE SUMS AGGREGATING TO ` 2,60,45,169, WITHOUT DISCUSSING THE ISSUE OF TDS LIABILITY UNDER SECTION 194J. 5. BEFORE THE TRIBUNAL ALSO, THE ASSESSEE, THOUGH CONT ESTED THE ENTIRE DEMAND OF ` 2,60,45,169, BUT HAS MAINLY MENTIONED ABOUT THE IS SUE REGARDING 194H, AS THE LEARNED COMMISSIONER (APPEALS) HAS DECIDED THE ISSU E ON 194H ONLY. THE LEARNED COUNSEL, BEFORE THE TRIBUNAL HAD SUBMITTED THAT THE ISSUE INVOLVED IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL, PUNE BENCH , IN ASSESSEES OWN CASE AND OTHER SIMILAR BUNCH OF APPEALS WHICH HAS NOW BEEN C ONFIRMED BY THE HONBLE BOMBAY HIGH COURT ALSO. ON THE OTHER HAND, THE LEAR NED DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS). 6. THE TRIBUNAL THOUGH, IN PARA5 HAS INCORPORATED THE NATURE OF PAYMENT, TAX SOUGHT TO BE DEDUCTED UNDER SECTIONS 194H AND 194J, AMOUNT OF INTEREST AND SHORT DEDUCTION CHARGED BY THE ASSESSING OFFICER BUT HAS DECIDED THE ISSUE MAINLY RELYING UPON THE DECISION OF THE TRIBUNAL, PUNE BENCH, AND THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT. THE FINDINGS OF THE TRIBUNAL HAV E BEEN DISCUSSED IN PARAS10 TO 13, WHICH ARE MAINLY ON THE ISSUE OF SECTION 194 H. 7. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE ISSUE OF SECTION 194J HAS NOT BEEN DISCUSSED AT ALL BY THE TRIBUNAL IN THE FINDING EVEN THOUGH THE ASSESSING OFFICER HAS WORKED OUT TH E SHORT DEDUCTION AND INTEREST ON ACCOUNT OF TDS LIABILITY UNDER SECTION 194J ALSO , AS THE COMPONENT OF DEMAND CONSISTED OF SHORT DEDUCTION AND INTEREST UNDER SEC TIONS 194H AND 194J. 8. THE LEARNED COUNSEL, ON THE OTHER HAND, SUBMITTED T HAT THERE IS NO MISTAKE APPARENT ON RECORD SO AS TO BE HELD TO BE RECTIFIAB LE WITHIN THE MEANING OF SECTION BHARAT SANCHAR NIGAM LIMITED 4 254(2), WHICH DESERVES TO BE RECTIFIED. MOREOVER, T HE DEPARTMENT HAS ALREADY CHALLENGED THE ORDER OF THE TRIBUNAL UNDER SECTION 260A BEFORE THE HIGH COURT. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND THE MATERIAL PLACED ON RECORD. AS POINTED OUT IN THE FORGOING PARAGRAPH, T HE ASSESSING OFFICER, IN HIS ORDER DATED 30 TH MARCH 2009, HAS CLEARLY WORKED OUT THE SHORT DEDUC TION OF TAX AND INTEREST LEVIED ON ACCOUNT OF VARIOUS PAYMENTS MADE BY THE ASSESSEE. HE HAS CATEGORICALLY BIFURCATED THE NATURE OF PAYMENT AND THE TDS LIABILITY UNDER SECTIONS 194H AND 194J. THE TOTAL SHORT DEDUCTION ALONG WITH INTEREST WITH REGARD TO THE PAYMENT OF TDS TO BE DEDUCTED UNDER SECTION 194H AG GREGATED TO ` 2,45,80,261 AND PAYMENTS WHICH WERE LIABLE FOR TDS UNDER SECTIO N 194J TO VARIOUS CELLULAR OPERATORS, BASIC SERVICE OPERATORS AND FOR REPAIR & MAINTENANCE OF OPERATORS AND PLANTS AGGREGATED TO ` 14,64,908. BOTH THESE SUMS ADDS UP TO ` 2,60,45,169, ON WHICH DEMAND WAS RAISED. THE LEARNED COMMISSIONER ( APPEALS), IN HIS ENTIRE ORDER, HAS MAINLY DISCUSSED THE ISSUE OF TAXABILITY OF TDS UNDER SECTION 194H AND THERE IS NOT A WHISPER ABOUT THE TDS LIABILITY UNDER SECTION 194J. HOWEVER, HE HAS CONFIRMED THE ENTIRE AMOUNT OF ` 2,60,45,169. ON A PERUSAL OF THE TRIBUNAL ORDER, WHICH IS THE SUBJECT MATTER OF THE PRESENT APPLICAT ION, IT IS SEEN THAT THE TRIBUNAL TOO HAS NOT DECIDED THE ISSUE OF TAXABILITY OF TDS ON THE PAYMENTS MADE TO CELLULAR OPERATORS, BASIC SERVICE OPERATORS AND FOR REPAIR & MAINTENANCE OF PLANTS, FOR WHICH THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS LI ABLE TO DEDUCT TDS UNDER SECTION 194J. THE TRIBUNAL HAS MAINLY PROCEEDED ON THE ISSU E WHICH WAS DECIDED BY THE LEARNED COMMISSIONER (APPEALS) AND HAS FOLLOWED THE DECISION OF THE TRIBUNAL, PUNE BENCH, AND THE DECISION OF THE BOMBAY HIGH COURT. T HESE DECISIONS WERE RENDERED ONLY IN THE CONTEXT OF DEDUCTIBILITY OF TAX AT SOUR CE ON COMMISSION PAYMENT UNDER SECTION 194H. THUS, THE ISSUE OF SECTION 194J WAS O MITTED TO BE CONSIDERED BY THE TRIBUNAL. SUCH AN OMISSION TO DEAL AND DECIDE THE I SSUE COMES WITHIN THE PURVIEW OF MISTAKE APPARENT FROM RECORD UNDER SECTION 254(2) A ND, THEREFORE, FOR THE LIMITED PURPOSE OF DECIDING THE ISSUE OF LIABILITY TO DEDUC T TDS UNDER SECTION 194J, ON THE PAYMENTS MADE TO CELLULAR OPERATORS, BASIC SERVICE OPERATORS AND FOR REPAIR & MAINTENANCE OF PLANTS, THE ORDER DATED 18 TH APRIL 2012, IS RECALLED FOR FRESH HEARING. HOWEVER, SUCH A RECALL OF ORDER IS FOR THE LIMITED PURPOSE ONLY AS INDICATED ABOVE. THUS, MISC. APPLICATION FILED BY THE DEPARTMENT IS TREATED AS ALLOWED. BHARAT SANCHAR NIGAM LIMITED 5 10. 7 #< ! 5 (!(! !) !# = ) # >? @ 10. IN THE RESULT, REVENUES MISC. APPLICATION IS T REATED AS ALLOWED. $ 5 / A B)< 17 TH MAY 2013 5 C @ ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY 2013 SD/- SANJAY ARORA ACCOUNTANT MEMBER SD/- '# '# '# '# $% $% $% $% & & & & AMIT SHUKLA JUDICIAL MEMBER MUMBAI, B) B) B) B) DATED: 17 TH MAY 2013 $ 5 2&#'( D(/# / COPY OF THE ORDER FORWARDED TO : (1) &) .7# / THE ASSESSEE; (2) ! / THE REVENUE; (3) E() / THE CIT(A); (4) E / THE CIT, MUMBAI CITY CONCERNED; (5) (!HC 2&#&) , , / THE DR, ITAT, MUMBAI; (6) CI. J / GUARD FILE. 3(# 2&# / TRUE COPY $) / BY ORDER 2 . KL / PRADEEP J. CHOWDHURY !7M &) K! / SR. PRIVATE SECRETARY + / > / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI