M/s. Power and Control Systems , Bangalore V. The Deputy Commissioner of Income Tax, Circle-1(2), Bangalore

SA 135/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5955 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Application of stay; Reasonable cause; TDS
• Section: 131; 201(1); 195; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, B ENGALURU BEFORE S HRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER SP NO S . 131 TO 135 /BANG/201 8 (IN I TA NO S . 883 TO 887 / BANG/2 0 1 8 ) (ASSESSMENT YEAR S : 2011 - 12 TO 2015 - 16 ) M/S.POWER & CONTROL SYSTEMS, D - 7, 1 ST FLOOR, UNITY BUILDINGS, J C ROAD CORPORATION, BENGALURU - 560002. PAN: AACFP 7897 E VS. PETITIONER DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 1(2), BENGALURU. RESPONDENT PETITI O NER BY : SHRI H. N.KHINCHA, CA. RESPONDENT BY : DR.PRADEEP KUMAR, ADDL.CIT(DR) DATE OF HEARING : 13 /0 4 /2018 DATE OF PRONOUNCEMENT : 18 / 0 4 /201 8 O R D E R PER I NTURI RAMA RAO, AM : TH ESE PETITION S ARE FILED BY THE ASSESSEE SEEKING STAY OF DEMAND OF RS . 7,19,029/ - FOR THE ASSESSMENT YEAR 2011 - 12, RS.6,85,062/ - FOR THE ASSESSMENT YEAR 2012 - 13, RS.9,75,226/ - FOR ASSESSMENT YEAR 2013 - 14, RS.10,57,397/ - FOR ASSESSMENT YEAR 2014 - 15 AND RS.21,00,074/ - FOR ASSESSMENT YEAR 2015 - 16 . IT IS SUBMITTED THAT THE DEMAND IN QUES TION HAD ARISEN ON ACCOUNT OF HOLDING THE ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AT SOURCE U/S 195 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. IT IS SUBMITTED THAT IN RESPECT OF TAX PORTION, THE LIABILITY CAME TO BE DE LETED AS THE RECIPIENT HAS ALREADY DISCHARGED THE TAX LIABILITY AND THEREFORE, APPLYING THE PROVISO TO SECTION 201(1) OF THE ACT, THE ASSESSEE - COMPANY WAS ABSOLVED THE LIABILITY OF THE TAX. HOWEVER, INTEREST LIABILITY HAS BEEN SUSTAINED BY THE LOWER AUTHO RITIES. IT IS SUBMITTED THAT IN VIEW OF LOSS INCURRED BY THE PAYEE, THE QUESTION OF TDS DOES SP NO S . 131 TO 135 /BAN G/201 8 PAGE 2 OF 2 NOT ARISE IN VIEW OF THE SETTLED P O SITION OF LAW. IF THE AMOUNT IS NOT CONSIDERED TO BE INCOME IN THE HANDS OF THE DEDUCTEE, THE PROVISIONS OF TAX DEDUCTION AT SO URCE WOULD NOT BE MADE APPLICABLE. IT IS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF THE HON BLE APEX COURT IN THE CASE OF M/S GE INDIA TECHNOLOGY CENTRE P. LTD. VS. CIT AND ANOTHER ( 327 ITR 456 ) (SC) WHEREIN THE H ON BLE APEX COURT HELD THAT IF PAYMENT IS NOT ASSESSABLE TO TAX THERE IS NO QUESTION OF TAX AT SOURCE BEING DEDUCTED. O N THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE STAY PETITION. 2. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. SINCE THE ASSESSEE HAD MADE OUT A STRONG PRIMA FACIE CASE IN HIS FAVOUR, WE ARE OF THE CONSIDERED OPINION THAT IT IS A FIT CASE TO STAY THE DEMAND TILL 19 TH APRIL 2018, ON WHICH DATE THE APPEALS ARE POSTED FOR HEARING. WE DIRECT THE REGIST RY TO POST THE APPEALS FOR HEARING OUT - OF - TURN ON 19 TH APRIL, 2018. THE STAY IS ALSO SUBJECT TO CONDITION THAT THE ASSESSEE SHALL NOT SEEK ADJOURNMENT OF THE CASE FROM HEARING WITHOUT ANY JUST AND REASONABLE CAUSE. 4. IN THE RESULT, THE STAY PETITIONS AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH APRIL, 2018 SD/ - SD/ - (SUNIL KUMAR YADAV) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLAC E : BENGALURU. D A T E D : 18 / 04 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE