Central Sericultural Research & Training Institute, Mysore v. ITO (TDS), Mysore

ITA 1130/BANG/2010 | 2006-2007
Pronouncement Date: 19-09-2011 | Result: Allowed

Appeal Details

RSA Number 113021114 RSA 2010
Assessee PAN BLRDO1726E
Bench Bangalore
Appeal Number ITA 1130/BANG/2010
Duration Of Justice 11 month(s) 15 day(s)
Appellant Central Sericultural Research & Training Institute, Mysore
Respondent ITO (TDS), Mysore
Appeal Type Income Tax Appeal
Pronouncement Date 19-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 19-09-2011
Date Of Final Hearing 19-09-2011
Next Hearing Date 19-09-2011
Assessment Year 2006-2007
Appeal Filed On 04-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. JUDICIAL MEMBER ITA NO.1130/BANG/2010 ASSESSMENT YEAR : 2006-07 CENTRAL SERICULTURAL RESEARCH & TRAINING INSTITUTE CENTRAL SILK BOARD BY DIRECTOR SRIRAMPURA MANANDA VADI ROAD MYSORE 570 008. PAN : TAN BLRDO 1726 E VS THE INCOME TAX OFFICER TDS MYSORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SHRI PRATAP SINGH ADDL.CIT(DR) DATE OF HEARING : 19.09.2011 DATE OF PRONOUNCEMENT : 19.09.2011 O R D E R PER N.K. SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 31.8.2010 OF THE CIT(APPEALS) MYSORE. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL: ITA NO.1130/BANG/10 PAGE 2 OF 7 1. THE LEARNED COMMISSIONER (APPEALS) ON FACTS AN D IN LAW ERRED IN SUSTAINING THE ORDER PASSED BY THE ASSESSI NG OFFICER UNDER SECTIONS 201(1) & 201(1A) TREATING THE APPELL ANT AS AN ASSESSEE IN DEFAULT IN RESPECT OF ITS ALLEGED NON-D EDUCTION OF TAX AT SOURCE ON THE PERQUISITES VALUE OF UNFURNISHED A CCOMMODATION PROVIDED TO ITS EMPLOYEES AND LEVYING INTEREST THER EON. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHO LDING THE FINDINGS OF THE ASSESSING OFFICER THAT THE ASSE SSEE IS AN AUTONOMOUS BODY SUBSTANTIALLY FUNDED BY THE CENTRAL GOVERNMENT THAT IT WAS COMPLETELY GOVERNED BY ITS BYE-LAWS AND THAT ITS EMPLOYEES CANNOT BE TREATED AS EMPLOYE ES OF THE CENTRAL GOVERNMENT. 3. THE LEARNED COMMISSIONER (APPEALS) FAILED TO APP RECIATE THAT THE APPELLANT IS FINANCIALLY FUNCTIONALLY AND ADMINISTRATIVELY CONTROLLED BY THE MINISTRY OF TEXTILES GOVERNMENT OF INDIA THAT IT IS ENTIRELY AND EXCLUSIVELY FUNDED BY THE GOVERN MENT OF INDIA THAT IT IS NOT AN AUTONOMOUS BODY AND THAT IT DOES NOT HAVE BYE- LAWS FOR ITS FUNCTIONING AND ADMINISTRATION. 4. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT CONSTITUTED THE STA TE WITHIN THE MEANING OF ARTICLE 12 OF THE CONSTITUTION OF INDIA AND THAT THE SALARIES TO ITS EMPLOYEES ARE PAID FROM THE CONSOLI DATED FUND OF INDIA AND ACCORDINGLY OUGHT TO HAVE HELD THAT THE EMPLOYEES OF THE APPELLANT ARE EMPLOYEES OF THE CENTRAL GOVERNME NT. 5. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHO LDING THE FINDING OF THE ASSESSING OFFICER THAT IT WAS RE QUIRED TO VALUE THE UNFURNISHED ACCOMMODATION PROVIDED TO ITS EMPLO YEES IN TERMS OF SL.NO.2 OF TABLE I OF RULE 3 OF THE INCO ME TAX RULES 1962 WHICH IS APPLICABLE TO ACCOMMODATION PROVIDED BY PRIVATE EMPLOYERS. 6. THE LEARNED COMMISSIONER (APPEALS) FAILED TO APP RECIATE THAT THE EMPLOYEES OF THE APPELLANT ARE GOVERNED BY THE GOVERNMENT OF INDIA PAY & ALLOWANCES RULES CONDUCT RULES AND OTHER RULES AS APPLICABLE TO CENTRAL GOVERNMENT EMPLOYEES AS PER RULE 2B OF THE CENTRAL SILK BOARD RULES THA T THE PAY SCALES OF ITS EMPLOYEES AND THEIR SERVICE CONDITION S & RULES ARE ALLOTTED UNFURNISHED QUARTERS AS PER THE GOVERNMENT OF INDIA RULES FOR WHICH LICENCE FEE AS FIXED THEREUNDER IS RECOVE RED FROM THEM AND SURRENDERED TO THE GOVERNMENT OF INDIA AND ACCO RDINGLY OUGHT TO HAVE HELD THAT SL.NO.1 OF TABLE I OF RUL E 3 OF THE INCOME TAX RULES 1962 WAS APPLICABLE IN RESPECT OF VALUATION OF ITA NO.1130/BANG/10 PAGE 3 OF 7 UNFURNISHED ACCOMMODATION PROVIDED BY THE APPELLANT TO ITS EMPLOYEES. 7. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT CONSIDERING AND ADJUDICATING UPON GROUNDS 1 8 9 10 & 11 RAISED BY THE APPELLANT BEFORE HIM. 8. THE LEARNED COMMISSIONER (APPEALS) FAILED TO TAK E NOTE OF THE SUBMISSIONS MADE BY THE APPELLANT VARIOUS DECI SIONS RELIED UPON BY THE APPELLANT AND THE FACTS OF THE CASE. 9. THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 10. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS A CONSTITUENT UNIT OF THE CENTRAL SILK BOARD A STATUTORY BOARD F UNCTIONING DIRECTLY UNDER THE CONTROL OF THE MINISTRY OF TEXTILES GOVT. OF I NDIA. THE BOARD RECEIVES ANNUAL GRANTS ONLY FROM THE GOVERNMENT OF INDIA BAS ED ON BUDGET PROPOSALS FROM THE MINISTRY OF TEXTILES AFTER APPRO VAL OF THE PLANNING COMMISSION FOR IMPLEMENTATION OF ITS RESEARCH AND D EVELOPMENT ACTIVITIES THROUGH RESEARCH AND TRAINING INSTITUTES SPREAD ACR OSS THE COUNTRY. 4. THE ASSESSEE ALLOTTED UNFURNISHED QUARTERS AS PE R THE GOVT. OF INDIA RULES AND LICENCE FEE AS FIXED THEREIN WAS RECOVERE D ON MONTHLY BASIS FROM SUCH EMPLOYEES. THE EMPLOYEES WHO WERE ALLOTT ED UNFURNISHED QUARTERS WERE NOT ELIGIBLE FOR OR PAID HOUSE RENT A LLOWANCE. THE ITO(TDS) WAS OF THE VIEW THAT THE STATUS OF THE ASSESSEE COU LD NOT BE EQUATED WITH THAT OF A PURE GOVERNMENT DEPARTMENT AS IT WAS AN A UTONOMOUS BODY SUBSTANTIALLY FUNDED BY THE GOVT. OF INDIA AND WAS COMPLETELY GOVERNED BY ITS OWN BYE-LAWS. ACCORDING TO THE ITO(TDS) THE A SSESSEE HAD NOT ITA NO.1130/BANG/10 PAGE 4 OF 7 CORRECTLY WORKED OUT THE PERQUISITE VALUE OF THE AC COMMODATION IN ACCORDANCE WITH PROVISIONS OF RULE 3 OF THE INCOME- TAX RULES. HE TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] AND LEV IED INTEREST U/S. 201(1A) OF THE ACT FOR NON-DEDUCTING/REMITTING TDS ON THE AMOU NTS PAID. IT WAS HELD THAT THE ASSESSEE SHOULD REMIT THE CORRECT TDS ALON G WITH THE MANDATORY INTEREST U/S. 201(1A) UPTO THE DATE OF ACTUAL REMIT TANCE OF TAXES DUE. 5. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A PPEALS) WHO UPHELD THE VIEW TAKEN BY THE ITO(TDS) REGARDING PERQUISITE VALUE OF RESIDENTIAL ACCOMMODATION PROVIDED TO ITS EMPLOYEES BY THE ASSE SSEE AND ACCORDINGLY CONFIRMED THE ACTION OF THE ITO(TDS). NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. VIDE GROUND NO.7 THE ASSESSEE HAS STATED THAT TH E LD. CIT(APPEALS) HAD NOT ADJUDICATED GROUNDS 1 8 9 10 & 11. DUR ING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE STATED TH AT THOSE GROUNDS WERE CO-RELATED WITH THE MAIN ISSUE UNDER CONSIDERATION AND HAS DIRECT BEARING BUT HAVE NOT BEEN ADJUDICATED BY THE LD. CIT(APPEAL S). IT WAS PRAYED THAT THE MATTER MAY BE SENT BACK TO THE LD. CIT(APPEALS) TO ADJUDICATE THE GROUNDS RAISED BEFORE HIM. THE AFORESAID CONTENTIO N OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR WH O HAD NO OBJECTION IF THE MATTER IS SENT BACK TO THE FILE OF LD. CIT(APPE ALS). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE I NSTANT CASE IT IS NOTICED ITA NO.1130/BANG/10 PAGE 5 OF 7 THAT THE ASSESSEE HAD RAISED THE FOLLOWING GROUNDS BEFORE THE LD. CIT(APPEALS): 1. THE BASIS FOR VALUATION OF RENT-FREE ACCOMMODAT ION PROVIDED BY EMPLOYERS TO THEIR EMPLOYEES BEING SPEC IFIED IN EXPLANATION 4 TO SECTION 17(2) OF THE ACT WITH EFFE CT FROM 1.4.2006 AS A CONSEQUENCE OF WHICH RULE 3 HAS BECOM E OTIOSE FROM 1.4.2006 AND INOPERATIVE FOR AND FROM THE ASSE SSMENT YEAR 2006-07 THE LEARNED INCOME TAX OFFICER ERRED IN HO LDING THAT SL.NO.2 OF TABLE-I OF RULE 3 WAS APPLICABLE TO THE CASE OF THE APPELLANT AND IN PASSING THE ORDER UNDER SECTIONS 2 01(1) AND 201(1A). 2. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED INCO ME TAX OFFICER ON THE FACTS & CIRCUMSTANCES OF THE CASE A ND IN LAW ERRED IN PASSING THE ORDER UNDER SECTIONS 201(1) & 201(1A) OF THE ACT. 3. THE LEARNED INCOME TAX OFFICER ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE ERRED IN TREATING THE AP PELLANT AS AN ASSESSEE IN DEFAULT IN RESPECT OF ITS ALLEGED NON-D EDUCTION OF TAX AT SOURCE ON PERQUISITE VALUE OF UNFURNISHED ACCOMM ODATION PROVIDED TO ITS EMPLOYEES. 4. THE LEARNED INCOME TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT CANNOT BE EQUATED WITH THAT OF A PURE GOV ERNMENT DEPARTMENT THAT THE APPELLANT IS AN AUTONOMOUS BOD Y SUBSTANTIALLY FUNDED BY THE GOVERNMENT OF INDIA AND THAT IT WAS COMPLETELY GOVERNED BY ITS BYE-LAWS. 5. THE LEARNED INCOME TAX OFFICER OUGHT TO HAVE APP RECIATED THAT THE APPELLANT IS FUNCTIONING UNDER THE CONTROL OF THE MINISTRY OF TEXTILES GOVERNMENT OF INDIA THAT IT IS NOT AN AUTONOMOUS BODY AND THAT IT DOES NOT HAVE BYE-LAWS FOR ITS FUN CTIONING AND ACTIVITIES AND ACCORDINGLY OUGHT TO HAVE TREATED T HE APPELLANT ON PAR WITH THE CENTRAL GOVERNMENT. 6. THE LEARNED INCOME TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT WAS REQUIRED TO VALUE THE UNFURNISHED ACC OMMODATION PROVIDED TO ITS EMPLOYEES IN TERMS OF SL.NO.2 OF TA BLE-I OF RULE 3 OF THE INCOME TAX RULES 1962 WHICH IS APPLICABLE TO ACCOMMODATION PROVIDED BY PRIVATE EMPLOYERS. 7. THE LEARNED INCOME TAX OFFICER OUGHT TO HAVE APP RECIATED THAT THE EMPLOYEE OF THE APPELLANT ARE GOVERNED BY THE GOVERNMENT OF INDIA PAY & ALLOWANCES RULES CONDUCT RULES ITA NO.1130/BANG/10 PAGE 6 OF 7 AND OTHER RULES AS APPLICABLE TO CENTRAL GOVERNMENT EMPLOYEES THAT THE PAY SCALES OF ITS EMPLOYEES AND THEIR SERV ICE CONDITIONS & RULES ARE ON PAR WITH THE CENTRAL GOVERNMENT EMPLOY EES THAT ITS EMPLOYEES ARE ALLOTTED UNFURNISHED QUARTERS AS PER THE GOVERNMENT OF INDIA RULES FOR WHICH LICENCE FEE AS FIXED THEREUNDER IS RECOVERED FROM THEM AND SURRENDERED T O THE GOVERNMENT OF INDIA AND ACCORDINGLY OUGHT TO HAVE HELD THAT SL. NO.1 OF TABLE-I OF RULE 3 OF THE INCOME TAX RULES 1962 WAS APPLICABLE IN RESPECT OF VALUATION OF UNFURNISHED A CCOMMODATION PROVIDED BY THE APPELLANT TO ITS EMPLOYEES. 8. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED INCO ME TAX OFFICER ERRED IN DETERMINING THE SUM PAYABLE BY THE APPELLANT AT RS.1 17 002 AS PER THE STATEMENT FURNISHED BY THE A PPELLANT IN RESPECT OF THE FINANCIAL YEAR 2006-07 RELEVANT TO T HE ASSESSMENT YEAR 2007-08. 9. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED INCO ME TAX OFFICER ERRED IN TREATING THE APPELLANT AS AN ASSES SEE IN DEFAULT IN RESPECT OF THE SURCHARGE ON INCOME TAX. 10. THE LEARNED INCOME TAX OFFICER ERRED IN LEVYING INTEREST UNDER SECTION 201(1A). THE APPELLANT DENIES ITS LIA BILITY TO BE ASSESSED TO INTEREST UNDER SECTION 201(1A) OF THE A CT. 11. WITHOUT PREJUDICE TO THE ABOVE THE CASE OF THE APPELLANT BEING ONE TO WHICH THE COMPUTATION PROVISIONS DO NO T APPLY THE LEARNED INCOME TAX OFFICER OUGHT TO HAVE REFRAINED FROM LEVYING THE INTEREST UNDER SECTION 201(1A) OF THE ACT. 12. FOR THESE AND OTHER SIMILAR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE A PPEAL MAY BE ALLOWED. 8. HOWEVER THE LD. CIT(APPEALS) HAD NOT ADJUDICAT ED GROUNDS 1 8 9 10 & 11. THE SAID GROUNDS ARE CO-RELATED WITH THE MAIN GROUND OF THE ASSESSEE AND GO TO THE ROOT OF THE CONTROVERSY. W E THEREFORE DEEM IT APPROPRIATE TO REMAND THIS CASE BACK TO THE FILE OF THE LD. CIT(APPEALS) TO BE ADJUDICATED AFRESH AFTER CONSIDERING THE GROUNDS 1 8 9 10 & 11 RAISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL EARLIER FI LED BEFORE HIM. HE SHALL ITA NO.1130/BANG/10 PAGE 7 OF 7 ALSO PROVIDE DUE AND REASONABLE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. 9. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF SEPTEMBER 2011. SD/- SD/- ( GEORGE GEORGE K. ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 19 TH SEPTEMBER 2011. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.