THE EXECUTIVE ENGINEER, RCD , PATNA V. ACIT, TDS CIRCLE, PATNA

SA 03/PAT/2018

• Counselvise Citation: [2015] 117 COUNSELVISE.COM (IT) 9162 (ITAT-PATNA)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 19-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 15-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARCHANA SINHA SR S C
• Assessee Lawyers: A K RASTOGI SH ABHI SARKAR; A K SARKAR ADVS
• Keywords: Recovery proceedings; Application of stay; TDS
• Section: 194C; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA BEFORE SH. N. K. SAINI, AM AND SH. SUDHANSHU SRIVASTAVA , JM S A NO . 03 /PAT. /201 8 (IN ITA NO S . 117/PAT./201 7 : ASSTT. YEAR : 2013 - 14 ) SA NO. 04/PAT./2018 (IN ITA NOS. 118/PAT./2017 : ASSTT. YEAR : 2014 - 15 ) SA NO. 05/PAT./2018 (IN ITA NOS. 119/PAT./2017 : ASSTT. YEAR : 2015 - 16 ) THE EXECUTIVE ENGINEER, RCD NAI RAJDHANI PATH, PRAMANDAL, ROAD CONSTRUCTION DEPARTMENT, CHAJJU BAGH, NEAR FIRE STATION, PATNA VS AS STT. COMMISSIONER OF INCOME TAX, TDS CIRCLE, PATNA (APPELLANT) (RESPONDENT) T AN NO. PTNE00146G ASSESSEE BY : SH. A. K. RASTOGI, SH. ABHI SARKAR & SH. A. K. SARKAR, ADVS. REVENUE BY : SMT. ARCHANA SINHA, SR. S.C. DATE OF HEARI NG : 16 .0 3 .201 8 DATE OF PRONOUNCEMENT : 16 .03 .201 8 ORDER PER N. K. SAINI, AM : THESE STAY APPLICATIONS HAVE BEEN FILED BY THE ASSESSEE FOR EXTENSION OF THE STAY OF OUTSTANDING DEMAND WHICH WAS ALREADY GRANTED IN SA NO. 6/PAT./2017 VID E ORDER DATED 06.10.2017. 2 . THE COMMON CONTENTION OF THE ASSESSEE IN ALL THESE APPLICATIONS DATED 14.03.2018 READ AS UNDER: MOST RESPECTFULLY SHEWETH: 1. THAT THIS IS IN AN APPLICATION FOR EXTENSION OF THE ORDER OF STAY GRANTED TO THE APPE LLANT VIDE ORD ER DATED 06.10.20 17 IN S.A. NO. 06/PAT/2017 (ARISING OUT OF APPEAL NO.117/ PAT/2017) WHEREBY THE NOTICE OF DEMAND U/S 156 OF S A NO S. 03 TO 05 /PAT. /201 8 THE EXECUTIVE ENGINEER 2 THE INCOME TAX ACT, 1951 (HEREAFTER CALLED THE ACT) DATED 12.03.2015 FOR RS.4,07,33,1 89 IN RESPECT OF ORDER U/S 201(1)/(1A) OF THE A CT DATED 12.03.2015 FOR T H E FINANCIAL YEAR 2012 - 13 WAS STAYED ON THE CONDITION THAT THE APPELLANT PAYS TAX TO THE TUNE OF RS.5,66,61,000 . 2. THAT THE APPELLANT STATES THAT AS DIRECTED BY THIS HON'BLE TRIBUNAL, THE APPELLANT HAD PAID THE TAX AND THE BALANC E TAX DEMAND WAS STAYED AS PER THE AFOREMENTIONED ORDER. 3. THAT THE APPELLANT STATES THAT IN THE ABOVEMENTIONED ORDER DATED 06.10.201 , IT WAS STATED THAT THE STAY WILL BE OPERATIONAL FOR A PERIOD OF 6 MONTHS OR DISPOSAL OF THE APPEAL, WHICHEVER IS EARLIE R. 4. THAT THE APPELLANT HUMBLY STATES THAT THE PERIOD OF 6 MONTHS IS ABOUT TO EXPIRE ON 06.04.2018. 5. THAT THE APPELLANT STATES THAT THE PRESENT APPEAL WAS FIXED FOR HEARING ON 05.03.2018, 09.03.2018 AND 13.03.2018. 6. THAT ON THE LAST DATE OF HEARING , I.E., ON 13.03.2018, THE ID . SENIOR STANDING COUNSEL OF THE INCOME TAX DEPARTMENT HAS SUBMITTED THAT THE MATTER NEEDS THROUGH EXAMINATION IN RESPECT OF THE VARIOUS ISSUES RAISED IN THE APPEAL. 7. THAT THE APPELLANT HUMBLY STATES THAT THE PRESENT ID. BEN CH WILL BE HOLDING THE HON'BLE TRIBUNAL TILL 16.03.2018.THEREAFTER, THE PRESENT MATTERS WILL BE HEARD BY NEXT BENCH. 8. THAT THE APPELLANT HUMBLY STATES AND SUBMITS THAT IT IS EXPECTED THAT THE NEXT BENCH WILL BE HELD AFTER THE DATE ON WHICH THE STAY GRAN TED WILL EXPIRE, I.E., ON 06.04.2018. 9. THAT THE APPELLANT STATES THAT ONCE THE STAY IS VACATED ON OR AFTER 06.04.2018, THE DEPARTMENT WILL TAKE COERCIVE MEASURES TO RECOVERY THE BALANCE TAX DEMAND. S A NO S. 03 TO 05 /PAT. /201 8 THE EXECUTIVE ENGINEER 3 10. THAT THE BRIEF FACT OF THE CASE IS THAT THE APPELLA NT - PETITIONER IS A DEPARTMENT OF GOVERNMENT OF BIHAR AND IS ENTRUSTED WITH THE DUTY TO DEVELOP INFRASTRUCTURE LIKE ROADS AND BRIDGES ILL TILL' SLATE OF BIHAR. 11. THAT THE PETITIONER STATES THAT DURING THE FINANCIAL YEAR 2012 - 13, 2013 - 14 AND 2014 - 15, THE STATE GOVERNMENT HAD ALLOW ED SUMS TO BIHAR RAJYA PUL NIRMAN NIGAM LIMITED AND B IHAR STATE ROAD DEVELOPMENT CORPORATION FOR DEVELOPMENT OF BRIDGE AND ROADS RESPECTIVELY. THE PETITIONER STATES THAT THE SUM ALLOTTED TO THESE ENTITIES ARE NOT IN THE NATURE OF PAYMENT AS PER THE PROVISIONS OF SECTION 194C FOR THE REASON THAT BIHAR RAJYA PUL NI RM AN NIGAM LIMITED AND BIHAR STATE ROAD DEVELOPMENT CORPORATION ARE NOT CONTRACTORS AS PER THE PROVISIONS OF SECTION 1 94C. FURTHER THE PETITIONER STATES THAT THE ALLOTMENT OF FUND TO THESE TWO ENTITIES IS CAPITAL IN NATURE AND NOT REVENUE. 12. THAT THE PETITIONER FURTHER STATES THAT THE ABOVE TWO CORPORATIONS ARE ALSO ASSESSE D UNDER THE INCOME TAX ACT. IT IS SLATED THAT IN THE CASE OF ASSESSMENT OF THESE TWO CORPORATIONS, T HE REVENUE HAS ACCEPTED THEIR BOOKS OF ACCOUNTS AND HAVE NOT TAKEN ANY ADVERSE INFERENCE IN RESPECT OF THE ALLOTMENT OF FUND BY THE STATE GOVERNMENT, DURING THE PERIODS CONCERNED, WHICH HAS BEEN TRANSFERRED THROUGH THE PETITIONER TO THE TWO CORPORATIONS. I N THE ASSESSMENT OF THESE TWO CORPORATIONS, THE DEPARTMENT HAS ACCEPTED THE RECEIPT TO BE CAPITAL IN NATURE AND NOT REVENUE (PLEASE REFER TO ASSESSMENT ORDERS PLACED AT PAGE 92 TO 113 OF PAPER BOOK DATED 07.09.2017). THUS, THERE IS NO DISPUTE SO FAR AS TRE ATMENT OF THE RECEIPT IN THE HANDS OF THE TWO CORPORATIONS BEING CAPITAL IN NATURE. 13. THAT IN VIEW OF THE FACTS ALRE ADY RECORDED, THERE IS NO LIABI LITY TO DEDUCT TAX ON TRANSFER OF FUND TO THE TWO CORPORATIONS. THE PRESENT CASE SQUARELY COVERED BY THE O RDER OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH, KOLKATA IN THE CASE OF ASANSOL DURGAPUR S A NO S. 03 TO 05 /PAT. /201 8 THE EXECUTIVE ENGINEER 4 DEVELOPMENT AUTHORITY VS ITO (TDS), DURGAPUR BEARING I .T.A NOS. 279 & 280/KO1/2016. 14.THAT EVEN IF THE CASE ON MERIT IS DECIDED AGAINST THE PETITIONER, THERE IS NO QUESTION OF ANY RECOVERY OF TAX IN TERMS OF THE JUDGMENT OF THE HON'BLE APEX COURT ILL THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P.) LTD VS CIT REPORTED IN 293 ITR 226 (SC) / 163 TAXMAN 355 (SC) AND THE CBD T CIRCULAR BEARING NO. 275/201/95 - IT( B) DATED 29.01.1997 AND THE PROVISO TO CLAUSE (B) OF SUB - SECTION (1) OF SECTION 201 OF THE ACT, AS THE DEDUCTEE HAS FILED ITS RETURN AND HAS PAID TAXES AND HAS FILED DECLARATION IN FORM 26A ON BEHALF OF THE CORPORATION PLACED AT PA GE 80 TO 91 OF PAPER BOOK DATED 07.09.2017. 15. THAT THE APPELLANT SUBMITS THA T IT IS REQUIRED T O TRANSFER FUNDS ON BEHALF OF T HE GOVERNMENT OF BIHAR, BEING IT NODAL AGENCY FOR TRANSFER OF FUND IN TERMS OF BIHAR TREASURY RULES, 2011 AND BIHAR FINANCIA L RULES, 2000. 16.THAT THE APPELLANT SUBMITS THAT IT HAD ALREADY FILED BEFORE THIS HON'BLE TRIBUNAL, WRITTEN SUBMISSIONS A LONG WITH PAPER BOOKS, WHEREIN ALL THE FACTS AND ARGUMENTS HAS BEEN PLACED. FOR SAKE OR BREVITY, THE SAME ARE NOT REPEATED HERE. THE AFORESAID PAPER BOOKS MAY BE CONSIDERED WHILE DISPOSING OR THIS ST AY APPLICATION. THE PETI TIONER, THEREFORE, PRAYS: A. THAT THE ORDER OF STAY GRANT ED LO THE APPELLANT VIDE ORDER DATED 06.10.2017 IN S.A. NO. 06/ PAT/20 17 (ARISING OUT OF APPEAL NO.117/PAT/2017), MAY BE EXTENDED TILL THE DISPOSAL OF THE APPEAL. B. THAT THE RECOVERY OF THE BALAN CE OUTSTANDING TAX DEMAND MAY BE STAYED TILL THE DISPOSAL OF APPEAL BY THE HON'BLE TRIBUNAL. C. THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME - TAX, TDS CIRCLE, PATNA OR THEIR SUBORDINATES OR THEIR SUCCESSORS MAY BE RESTRAINED FROM TAKING ANY ACTION AS S A NO S. 03 TO 05 /PAT. /201 8 THE EXECUTIVE ENGINEER 5 REGARDS RECOVERY OF TAX, INTEREST AND PENALTY LEVIED OR LEVIABLE FOR THE RELEVANT FINANCIAL YEAR. D. ANY OTHER RELIEF WHICH THE HON'BL E TRIBUNAL MAY DEEM F IT AND PROPER IN THE NATURE AND CIRC UMSTANCES OF THE CASE MAY BE GRANTED. I, UMESH KUMAR RAI, S / O LATE RADHA RAI, R/O KAUTILYA NAGAR, PO AND PS LAL BAHADUR SHASTRI NAGAR, PATNA, PIN - 800023, STATE THAT WHATEVER IS STATED HEREINABOVE IN THE STAY PETITION IS TRUE TO THE BEST OF MY KNOWLEDGE A ND INFORMATION. SD/ - (EXECUTIVE ENGINEER NEW CAPITAL ROAD DIV. RCD, PATNA DATED; 14.03.2018 3 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTS OF THE AFORESAID APPLICATIONS AND ALSO SUBMITTED THAT THE DIRECTIONS OF THE ITAT VIDE ORDER DATED 06.10.2017 TO DEPOSIT A SUM OF RS.5,66,61,000/ - HAS BEEN COMPLIED BY THE ASSESSEE AND THE ASSESSEE IS NOT RESPONSIBLE FOR NON - DISPOSAL OF THE APPEALS. HE, THEREFORE, REQUESTED TO EXTEND THE STAY OF THE OUTSTANDING DEMAND. 4 . IN HER RIVAL SUBMISSIONS, THE LD. STANDING COUNSEL ALTHOUGH OPPOSED THE EXTENSION OF THE STAY OF THE OUTSTANDING DEMAND BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION O F THE LD. COUNSEL F OR THE ASSESSEE. 5 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAD COMPLIED THE DIRECTIONS GIVEN BY THE ITAT WHILE GRANTING THE STAY VIDE ORDER DATED 06.10.2017 IN SA S A NO S. 03 TO 05 /PAT. /201 8 THE EXECUTIVE ENGINEER 6 NO. 6/PAT./2017 AND THE REASONS F OR NON - DISPOSAL OF THE APPEALS ARE NOT ATTRIBUTABLE TO THE ASSESSEE AS IS EVIDENT FROM PARA 6 OF THE APPLICATION. IT IS ALSO RELEVANT TO POINT OUT THAT REGULAR BENCH IS NOT FUNCTIONING AT PATNA AND THE PRESENT STAY GRANTED TO THE ASSESSEE WILL EXPIRE ON 06 .04.2018 . THEREFORE, IT IS A FIT CASE WHERE THE STAY FOR THE OUTSTANDING DEMAND ALREADY GRANTED VIDE ORDER DATED 06.10.2017 MAY BE EXTENDED. WE, THEREFORE, EXTEND THE STAY OF THE OUTSTANDING DEMAND FOR A FURTHER PERIOD OF SIX MONTHS OR TILL THE DISPOSAL OF THE APPEALS OF THE ASSESSEE WHICHEVER IS EARLIER. 6 . IN THE RESULT, THE STAY APPLICATION S FILED BY THE ASSESSEE ARE ALLOWED . (ORDER PRONOUNCED IN THE COURT ON 16 /0 3 /2018) SD/ - SD/ - ( SUDHANSHU SRIVASTAVA ) (N. K. SAIN I) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 16 /0 3 /2 018 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR