PNC SPSCPL (JV),AGRA V. NATIONAL FACELESS APPEAL CENTRE (NFAC), COMMISSIONER OF INCOME-TAX (APPEALS), INCOME-TAX DEPARTMENT, DELHI, DELHI

ITA 100/AGR/2023

AI Insights

The case revolves around the dispute concerning the non-deduction of TDS on subcontract payments made by the assessee, PNC SPSCPL (JV), during the financial year 2016-17. The Assessing Officer treated the assessee as an 'assessee-in-default' under sections 201(1) and 201(1A) of the Income-tax Act, 1961, for not deducting TDS on payments totaling Rs.1,69,73,793 to subcontractors. The assessee contested this decision, claiming that the TDS was duly deducted and deposited, which was initially not substantiated to the satisfaction of the lower authorities. However, upon presenting additional evidence at the Tribunal, the Tribunal found merit in the assessee's claims and allowed the appeal, directing the Assessing Officer to verify the documents and grant appropriate credit.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 475377 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-12-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-06-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Assessee Lawyers: DEEPENDRA MOHAN
• Keywords: Additional evidence; TDS; Non compliance
• Section: 201(1); 194C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 100/Agr/2023 Assessment Year: 2017-18 PNC SPSCPL (JV), 3/22D, PNC Tower, Civil Lines, Agra. PAN: AAABP1868R TAN: AGRP11947F v. DCIT (TDS), Kanpur. (Appellant) (Respondent) Assesseeby : Sh. Deependra Mohan, CA Revenue by :Sh. Shailendra Srivastava, Sr. DR Date of hearing : 02.12.2024 Date of Pronouncement : 04.12.2024 ORDER This appeal in ITA No.100 /Agr/2023 for the assessment year 2017-18 has arisen from the appellate order dated 28.04.2023 (DIN& Order No. ITBA/NFAC/S/250/2023-24/1052431790(1)) passed by learned Commissioner of Income-tax(Appeals),NFAC, Delhi, whichin turnhas arisen from the order dated 26.02.2020 passed by Assessing Officer u/s. 201(1) & 201(1A) of the Income-tax Act, 1961, holding assessee as assessee-in-default for non compliance of provisions of Section 194C of the Income-tax Act,1961.. ITA No. 100/Agr/2023 2 2. The grounds of appeal raised by the assessee in Memo of Appeal filed with Income Tax Appellate Tribunal, Agra Bench, Agra, reads as under: “1. That the learned Commissioner of Income Tax(NFAC) has erred in law and on facts in sustaining the assessment order passed by the Ld. AO under Section 201(1) and 201(1A) of the IT Act, 1961. 2. That the learned Authorities has erred in law and on facts in treating the appellant as “assessee in default’ for non-deduction of TDS on the payment made on account of subcontracting and raising a demand of Rs. 4,99,030. 3. That the learned Authorities has erred in law and on facts in passing the order without considering that the due TDS was duly deducted and deposited within stipulated time. 4. That the learned Commissioner of Income Tax(NFAC) has erred in law and on facts in arbitrary imposing interest u/s 201(1A) of the Income-tax Act, 1961 amounting to Rs. 1,59,554/-. 5. That the order is bad in law and against the facts of the case. 6. That any other relief or reliefs deemed fit in the facts and circumstances of the case may be granted. The appellant craves leave to add , alter or vary the grounds of appeal before or at the time of hearing.” 3.Brief facts of the case are that the assessee is engaged in the business of road construction. It acquires road construction contracts and further sub contracts them to other concerns. Assessee filed an online application for lower deduction of TDS certificate u/s. 197(1) for F.Y. 2019-20 along with audit report and other supporting ITA No. 100/Agr/2023 3 evidences. The Assessing Officer observed from the documents furnished onlinei.e. Form No. 3CB Report Point No. 34 ,furnished by the assesseethat the assessee has not deducted any TDS in respect of any of the transactions for F.Y. 2016-17. From the perusal of P&L Account of the audit report, the AO observed that the assessee has provided sub-contracts amounting to Rs.1,69,73,793/- to M/s. PNC Infratech Limited and S.P. Singla Constructions Pvt. Ltd. without deducting TDS on the payments. Assessing Officer asked the assessee to submit the details, but no explanation were furnished. The Assessing Officer treated the assessee as assessee-in-default u/s. 201(1) and 201(1A) of the Act for non-deduction of TDS on the sub-contract payments, detailed as under : Sl. No. Particulars Amount of expenditure Applicable section& TDS rate Short Charge u/s. 201(1) Interest u/s. 201(1A) @ 1% per month from April 2016 to Feb 2020 (Total 47 months) Total Default u/s. 201(1) & 201(1A) 1 Sub- contract Rs.1,69,73,793 194C @ 2% Rs.3,39,476/- Rs.1,59,554/- Rs.4,99,030/- 3.2 Thus, the AO treated assessee as assessee-in-default u/s 201(1) and 201(1A) of the Income-tax Act,1961 Act ,and the assessee was ITA No. 100/Agr/2023 4 directed to pay demand of Rs.4,99,030/-. Notice of demand was issued by the Assessing Officer to the assessee. 4. Aggrieved, Assessee filed first appeal with ld. CIT(Appeals) ,and the ld. CIT(Appeals) dismissed the appeal of the assessee vide appellate order dated 28.04.2023. During Appellate proceedings, Ld. CIT(Appeals) issued five notices to the assessee which remained un- complied with by the assessee, and Ld. CIT(Appeals) affirmed the order of the Assessing Officer . The ld. CIT(A) observed that the assessee could not submit verifiable proof to substantiate that TDS was duly deposited by it.Thus, the appeal filed by the assessee was dismissed by ld. CIT(A). 5. Still aggrieved, the assessee has filed second appeal with the Tribunal . The ld. Counsel for the assessee Shri Deepender Mohan, CA appeared before the Bench, and submitted that the assessee has filed paper book containing 4 pages. The ld. Counsel for the assessee at the outset submitted that the assessee has duly deposited the income-tax deducted atsource(TDS) u/s 194C along with interest , on 19.05.2017 vide challan Identification No. 02029761905201740772( challan Sl. No. 40772) with Bank of ITA No. 100/Agr/2023 5 Baroda, Sanjay Place, Agra(BSR Code 0202976). It was submitted that copy of challan is enclosed in Paper Book at page no. 3. It was further submitted that TDS return in Form No. 26Q for 4th quarter(01.01.2017 to 31.03.2017)of the financial year 2016-17 (AY 2017-18) was duly filled in on 25.05.2017 with the department ( File Hash 9925446 / No. 17052518002809925446) , and Form No. 27A is filed in paper book at page 2 which is placed on record in file. It was submitted that the assessee has paid TDS of Rs.3,39,476/- and interest amount of Rs.15,276/-, totalling to Rs.3,54,752/-, for which challan and Form No. 27A are enclosed (PB/Page 2 & 3). Assessee has also produced on record Form. No. 16A issued by the assessee in favour of PNC Infratech Limited (PAN AACCP0377Q) as downloaded from Traces for the fourth quarter of financial year 2016- 17 (assessment year 2017-18) (Certificate No. DNYYWOO), wherein said TDS amount of Rs.3,39,476/- is found credited to the credit of PNC Infratech Ltd. for deduction of tax at source u/s. 194C on amount paid/credited of Rs.1,69,73,793/- by the assessee in favour of PNC Infratech Limited . The said Form No. 16A is placed at page ITA No. 100/Agr/2023 6 4/paper book.Thus, it was prayed that the appeal of the assessee be allowed. 5.2 Ld. Sr. DR submitted that the assessee has produced these documents in paper book at page 1-4 for the first time before the ITAT and these are additional evidences which requires verification. The ld. Sr. DR prayed that the matter can be restored back to the file of Assessing Officer for verification. 6.I have considered rival contentions and perused the material on record. I have observed that the Assessing Officer has treated the assessee as an assessee-in-default u/s. 201(1) and 201(1A) of the Act for non-compliance of TDS provisions u/s. 194C with respect to payment of Rs.1,69,73,793/- made by the assessee to its sub- contractors PNC Infratech Limited and S.P. Singla Construction Pvt. Ltd. The assessee is in the business of road construction. During the proceedings conducted by the AO , the assessee did not comply with the notices issued by the AO. The AO treated the assessee as assessee-in-default and raised demand of Rs. 4,99,030/- against the assessee u/s 201(1) and 201(1A) of the 1961 Act, as detailed hereunder: ITA No. 100/Agr/2023 7 Sl. No. Particulars Amount of expenditure Applicable section& TDS rate Short Charge u/s. 201(1) Interest u/s. 201(1A) @ 1% per month from April 2016 to Feb 2020 (Total 47 months) Total Default u/s. 201(1) & 201(1A) 1 Sub- contract Rs.1,69,73,793 194C @ 2% Rs.3,39,476/- Rs.1,59,554/- Rs.4,99,030/- 6.2 Aggrieved, the assessee filed first appeal with ld. CIT(Appeals), but despite issuance of 5 notices by the ld. CIT(Appeals), there was no compliance. The appeal of the assessee was dismissed by ld. CIT(A) for want of submissions of evidences to substantiate deposits of the TDS.: 6.3 While dismissing the appeal of the assessee, the learned CIT(A) has recorded in his appellate order grounds of appeal raised by the assessee, wherein , inter-alia, ground no 2 reads as under: “1.**** 2. That the learned A.O. has erred in law and on facts in passing the order u/s 201(1)/201(1A) of the Income Tax Act without considering that the due TDS was duly deducted and deposited within stipulated time. 3……. 4……. 5…….” ITA No. 100/Agr/2023 8 6.4 The learned CIT(A) has also recorded at para 5 of his appellate order , which reads as under: 5…………. During the appellate proceedings, as per the information provided by the appellant in Form No. 35 , it is observed that the appellant is contending that the relevant TDS claimed to have been deducted as per the Form No. 16A originally generated through TRACES on 15.06.2017 covering the details of TDS. However , with reference to this, appellant could not provide any further supporting proofs to adduce that the relevant TDS as claimed having deducted on these payments made to sub-contractors. In spite of availing sufficient time and opportunities , appellant could not provide any supporting workings/proofs which adduce appellant’s fulfilment of TDS provisions u/s 194C of I.T. Act resulting in final deposit of such TDS to Government account so that provisions u/s 201(1) and 201(1A) of I.T Act are not attracted as claimed in Form 35………” 6.5 Thus, the learned CIT(A) has observed the claim of the assessee that it has duly deposited TDS amount to the credit of government , but ld. CIT(A) dismissed the appeal of the assessee for want of evidences substantiating deposit of TDS , as was contended by the assessee in its ground of appeal and in Form No. 35 filed with ld. CIT(A). The assessee on its part has also did not complied with the notices issued by ld. CIT(A) , and no replies were submitted. 6.6. Aggrieved by the appellate order passed by ld. CIT(A), the assessee has filed appeal before ITAT. The assessee has duly filed ITA No. 100/Agr/2023 9 before ITAT, evidences in the form of copy of challan for depositing income-tax deducted at source(TDS) u/s 194C along with interest , on 19.05.2017 vide challan Identification No. 02029761905201740772 with challan Sl. No. 40772 with Bank of Baroda, Sanjay Place, Agra(BSR Code 0202976)(Paper Book at page no. 3). The assessee has also filed evidence by way of copy of TDS return in Form No. 26Q for 4 quarter(01.01.2017 to 31.03.2017) of the financial year 2016-17 (AY 2017-18) filled on 25.05.2017 with the department ( File Hash 9925446 / No. 17052518002809925446) and Form No. 27A (Paper book at page 2). The assessee has also filed copy of challan of payment of TDS of Rs.3,39,476/- and interest amount of Rs.15,276/-, totalling to Rs.3,54,752/-, for which challan and Form No. 27A are enclosed PB/Page 2 & 3). Assessee has also produced on record Form. No. 16A issued by Revenue as downloaded from Traces for the fourth quarter of financial year 2016- 17 (assessment year 2017-18) (Certificate No. DNYYWOO), wherein said TDS amount of Rs.3,39,476/- is found credited to the credit of PNC Infratech Ltd. (PAN AACCP0377Q) for deduction of tax at source u/s. 194C on amount paid/credited of Rs.1,69,73,793/- by the ITA No. 100/Agr/2023 10 assessee in favour of PNC Infratech Limited . The said Form No. 16A is placed at page 4/paper book. These documents/evidences are filed for the first time before ITAT. Thus, based upon these documents /evidences , which are now filed before me for the first time and the statement made by ld. Counsel for the assessee before the Bench, I am of the considered view that the assesseemust succeed in this appeal. However, since the documents are filed for the first time before me, they require verification. I allow the appeal of the assessee and direct AO to grant appropriate credit for TDS/Interest deposited by the assesseafter verifying the documents. Before Parting, I would also like to highlight unfortunate manner in which the authorities below has dismissed the contentions of the assessee. The department is well equipped with the latest technologies and the filing and processing etc are now being done electronically by department. Almost all the data’s are now available digitally with the department and the relevant officers can access these digital data online. The contentions of the assessee could have been easily verified by the authorities with the help of the technology the department is equipped with instead of relegating assessee to litigation , and the assessee as ITA No. 100/Agr/2023 11 well statutory authorities could have been saved with precious time and costs in persuing this matter at various legal forums. The appeal of the assessee is allowed in the manner indicated above. 7. In the result, appeal of the assessee is allowed subject to above directions. Order pronounced in the open court on 04/12/2024. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 04/12/2024 *aks/- "