District Education Officer UT, Chandigarh v. ITO, (TDS-1), Chandigarh

ITA 1215/CHANDI/2017 | 2009-2010
Pronouncement Date: 29-11-2017 | Result: Allowed

Appeal Details

RSA Number 121521514 RSA 2017
Bench Chandigarh
Appeal Number ITA 1215/CHANDI/2017
Duration Of Justice 3 month(s) 22 day(s)
Appellant District Education Officer UT, Chandigarh
Respondent ITO, (TDS-1), Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-11-2017
Last Hearing Date 27-11-2017
First Hearing Date 27-11-2017
Assessment Year 2009-2010
Appeal Filed On 07-08-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA CHANDIGARH BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND DR. B.R.R. KUMAR ACCOUNTANT MEMBER ITA NOS.1215 & 1216/CHD/2017 ASSESSMENT YEARS: 2009-10 & 2011-12 DISTRICT EDUCATION OFFICER UT VS. THE ITO SECTOR 19-B CHANDIGARH TDS WARD-1 CHANDIGARH TAN NO. PTLD11220G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. M.R. SHARMA DEPARTMENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 27/11/2017 DATE OF PRONOUNCEMENT : 29/11/2017 ORDER PER DR. B.R.R. KUMAR AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER OF LD. CIT(A)-1 GURGAON DT. 19/05/2017 & 17/ 05/2017 RESPECTIVELY. 2. SINCE THE GROUNDS RAISED AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL THE SAME WERE HEARD TOGETHER AND ARE BEI NG DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. WE SHALL BE TAKING ITA NO. 1215/CHD/2017 AS THE LEAD CASE FOR DISPOSING OF ALL THE APPEALS TOGETHER. 3. THE GROUNDS RAISED IN ITA NO. 1215/CHD/2017 ARE AS UNDER: 1. THAT THE ORDER PASSED BY THE ASSESSING OFFICER A S UP HELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND IS AGAINST ALL THE CANNONS OF LAW AND JUSTICE. 2. THAT THE ORDER OF THE ASSESSING OFFICER AS UP H ELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) HOLDING THE APPELLANT AS ASSES SEE IN DEFAULT U/S 201(1) AND CREATING ADDITIONAL DEMAND ON ACCOUNT OF NON DEDUCT ION OF TAX AT SOURCE AMOUNTING TO RS. 186848/- UNDER SECTION 194 -J BEING THE AMOUNT OF HONOURARIUM PAID TOWARDS RENDERING PART TIME SERVICES IN THE VA RIOUS SCHOOLS OF THE GOVT IN THE U.T .CHANDIGARH UNDER THE SCHEME OF THE GOVT IS BAD IN LAW AND NEEDS TO BE SET- ASIDE 3. THAT THE ORDER OF THE ASSESSING OFFICER AS UP HE LD BY THE COMMISSIONER OF INCOME TAX (APPEALS) HOLDING THE APPELLANT AS ASSES SEE IN DEFAULT U/S 201(1) AND CREATING ADDITIONAL DEMAND ON ACCOUNT OF NON DEDUCT ION OF TAX AT SOURCE AMOUNTING TO RS. 25123/- UNDER SECTION 194-C BEING THE AMOUNT OF PAID ON ACCOUNT OF HIRING CHARGES OF THE STUDENTS IN THE BU SES IS BAD IN LAW AND NEEDS TO BE SET-ASIDE 4. THAT THE ORDER OF THE ASSESSING OFFICER AS UP H ELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) LEVYING INTEREST U/S 201(1 A) AMOUNTING TO RS. 183556/- RS 227802/- RS 3278/- AND RS 24290/- WITHOUT EVEN SPEC IFYING THE PERIOD FOR WHICH THE SAME HAS BEEN LEVIED AND THAT TOO IN CASES WHER E THERE WAS NO LIABILITY OF THE APPELLANT FOR DEDUCTION OF THE TDS IS BAD IN LA W AND NEEDS TO BE SET ASIDE. 4. GROUND NO. 2 DEALS WITH CREATING ADDITIONAL DEMAND ON ACCOUNT OF NON DEDUCTION OF TDS U/S 201(1). 5. BRIEF FACTS ARE THAT IN THE CASE THE AO CREATED A DEMAND OF RS. 1 86 848/- FOR NON DEDUCTION OF TDS U/S 194J BEING AMOUNT PAID TO INSPECTORS AND SUPERVISORS OF THE MID DAY MEAL PROGRAMME. 6. THE LD. CIT(A) CONFIRMED THE INTEREST LEVIED UND ER SECTION 201(1A). 7. BEFORE US THE LD. AR ARGUED THAT THESE PAYMENTS HAVE BEEN MADE AS WAGES TO THOSE ENGAGED ON PART TIME BASIS. SINCE IN EACH CASE THE TOTAL PAYMENT DID NOT EXCEED THE MINIMUM AMOUNT WHICH IS SUBJECTED TO TAX AND THE PROVISIONS OF 194J HAVE BEEN WRONGLY APPLIED. T HE LD. AR FURTHER ARGUED THAT THE PAYMENT IS IN CONSIDERATION OF SERVICES RE NDERED AND THEY ARE NOT PROFESSIONAL OR TECHNICAL SERVICES WITHIN THE MEANI NG UNDER SECTION 194J. THE LD. AR HAS PRODUCED BEFORE US THE DETAILS OF PAYMENTS M ADE. 8. WE FIND THAT THE AMOUNTS HAVE BEEN PAID AS REMUN ERATION TO VARIOUS PART TIME WORKERS BASED ON THE NUMBER OF DAYS WORKED AND THE PAYMENTS RANGED FROM RS. 38702/- TO RS. 64 000/- TO DIFFERENT INDI VIDUALS. THESE ARE THE PAYMENTS MADE TO MID DAY MEALS SCHEME WORKERS WHICH DO NOT A TTRACT SECTION 194J PRECISELY. FOR THE SAKE OF CONVENIENCE SECTION 194 J REPRODUCED HEREUNDER: SECTION 194J READS AS UNDER: FEES FOR PROFESSIONAL OR TECHNICAL SERVICES. 194J. (1) ANY PERSON NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF ( A ) FEES FOR PROFESSIONAL SERVICES OR ( B ) FEES FOR TECHNICAL SERVICES [OR] [( BA ) ANY REMUNERATION OR FEES OR COMMISSION BY WHATEVE R NAME CALLED OTHER THAN THOSE ON WHICH TAX IS DEDUCTIBLE UNDER SECTION 192 TO A DIRECTOR OF A COMPANY OR] [( C ) ROYALTY OR ( D ) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 28 ] SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CH EQUE OR DRAFT OR BY ANY OTHER MODE WHICHEVER IS EARLIER DEDUCT AN AMOUNT EQUAL TO [TEN] PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN : PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION ( A ) FROM ANY SUMS AS AFORESAID CREDITED OR PAID BEFOR E THE 1ST DAY OF JULY 1995; OR ( B ) WHERE THE AMOUNT OF SUCH SUM OR AS THE CASE MAY BE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE AFORESAID PERSON TO THE ACCOU NT OF OR TO THE PAYEE DOES NOT EXCEED ( I ) [THIRTY THOUSAND RUPEES] IN THE CASE OF FEES FO R PROFESSIONAL SERVICES REFERRED TO IN CLAUSE ( A ) OR ( II ) [THIRTY THOUSAND RUPEES] IN THE CASE OF FEES FO R TECHNICAL SERVICES REFERRED TO IN [CLAUSE ( B ) OR] [( III ) [THIRTY THOUSAND RUPEES] IN THE CASE OF ROYALTY REFERRED TO IN CLAUSE ( C ) OR ( IV ) [THIRTY THOUSAND RUPEES] IN THE CASE OF SUM REF ERRED TO IN CLAUSE ( D ) :] [ PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY WH OSE TOTAL SALES GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING TH E FINANCIAL YEAR IN WHICH SUCH SUM BY WAY OF FEES FOR PROFESSIONAL SERV ICES OR TECHNICAL SERVICES IS CREDITED OR PAID SHALL BE LIABLE TO DEDUCT INCOME- TAX UNDER THIS SECTION :] [ PROVIDED ALSO THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FAMILY REF ERRED TO IN THE SECOND PROVISO SHALL BE LIABLE TO DEDUCT INCOME-TAX ON THE SUM BY WAY OF FEES FOR PROFESSIONAL SERVICES IN CASE SUCH SUM IS CREDI TED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY.] (2) [***] (3) [***] EXPLANATION. FOR THE PURPOSES OF THIS SECTION ( A ) 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERED B Y A PERSON IN THE COURSE OF CARRYING ON LEGAL MEDICAL ENGINEERING OR ARCHITEC TURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADVERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSES OF SECTION 44AA OR OF THIS SECTION; ( B ) 'FEES FOR TECHNICAL SERVICES' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE ( VII ) OF SUB-SECTION (1) OF SECTION 9 ; [( BA ) 'ROYALTY' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE ( VI ) OF SUB- SECTION (1) OF SECTION 9 ;] ( C ) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS C REDITED TO ANY ACCOUNT WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER NAME IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH SUM SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH SUM TO THE ACCOUNT OF THE PAYEE AND THE PROVIS IONS OF THIS SECTION SHALL APPLY ACCORDINGLY. 9. ON PERUSAL OF THE ABOVE SECTION 194J THE PAYMENT S MADE TO MID DAY MEAL WORKERS AT NO STRETCH OF IMAGINATION CAN BE TR EATED AS FEES PAID FOR PROFESSION OR TECHNICAL SERVICES. HENCE THE INTERES T LEVIED UNDER SECTION 201(1A) IS UNWARRANTED. 10. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWE D. 11. REGARDING GROUND NO. 3 RELATES TO CREATION OF A DDITIONAL DEMAND ON ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE OF RS. 25 123/- UNDER SECTION 194C. THIS DEMAND HAS BEEN CONFIRMED BY THE LD. CIT(A). 12. BEFORE US IT WAS SUBMITTED THAT THE PAYMENT TO THE BUSES WERE USED IN CONNECTION WITH THE ARRANGEMENT FOR THE SPORTS IN T HE SCHOOL WHERE CHILDREN ARE PICKED AND DROP AFTER THE ANNUAL GAMES. IT WAS SUBM ITTED THAT THE BUSES WERE NOT USED REGULARLY FOR THE SCHOOLS. IT WAS ALSO SUB MITTED THAT THE CHARGES PAID WERE TO REGISTERED TRAVEL AGENTS WHO ARE REGULAR AS SESSEES AND CONFIRMATION REGARDING THEIR FILING OF RETURNS COULD NOT BE FILE D AS SUM OF THEM LEFT THE BUSINESS. 13. WE HAVE CONSIDERED THE SUBMISSION OF THE ASSESS EE. 14. IN THIS CASE THE BUSES WERE USED TO PICK AND DR OP THE CHILDREN FOR ANNUAL GAMES AND RELATED ACTIVITIES. IT IS NOT A CASE OF E NTERING INTO A CONTRACT FOR REGULAR USE OF BUSES. SINCE THE AMOUNTS WERE MINIMA L AND THE TAX EFFECT IS ONLY OF RS. 25 123/-. FURTHER THE HONORARIUM PAID TO COU NSELORS UNDER THE HEAD WAGES ALSO DO NOT ATTRACT PROVISIONS OF SECTION 194C. KEE PING IN VIEW THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE THE ADDITION MADE IS HEREBY DELETED. THIS DELETION CANNOT BE TAKEN AS PRECEDENCE IN ANY OTHER CASE. 15. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWE D 16. GROUND NO. 4 RELATES TO NON DEDUCTION OF TAX ON PAYMENT MADE UNDER MID DAY MEAL PROGRAMME AND PAYMENTS FOR COMPUTER IN STRUCTORS AND DATA ENTRY OPERATORS. 17. BEFORE US THE ASSESSEE SUBMITTED THAT THE PAYM ENTS WERE MADE TO INSTITUTIONS WHICH WERE REGISTERED UNDER SECTION 12 A. THE LD. CIT(A) HAS REMANDED THE MATTER BACK TO THE FILE OF ASSESSING O FFICER FOR VERIFICATION. HENCE WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. C IT(A) AS ITS A MATTER OF VERIFICATION ONLY AT THE ASSESSING OFFICERS END. 18. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES . 19. IN THE RESULT BOTH THE APPEAL OF THE ASSESSEE A RE ALLOWED. THE ORDER IS PRONOUNCED ON . IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUMA R) JUDICIAL MEMBER ACCOUNTANT MEMBER AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE