Nirma Limited,, Ahmedabad v. The Dy.CIT, Centralized Processing Cell-TDS,, Gaziabad

ITA 1379/AHD/2015 | 2012-2013
Pronouncement Date: 27-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 137920514 RSA 2015
Assessee PAN AAACN5350K
Bench Ahmedabad
Appeal Number ITA 1379/AHD/2015
Duration Of Justice 1 year(s) 5 month(s) 12 day(s)
Appellant Nirma Limited,, Ahmedabad
Respondent The Dy.CIT, Centralized Processing Cell-TDS,, Gaziabad
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 27-10-2016
Assessment Year 2012-2013
Appeal Filed On 15-05-2015
Judgment Text
I.T.A. NO. 137 9 /AHD/201 5 ASSESSMENT YEAR: 20 1 2 - 13 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD [CORAM: R.P. TOLANI J.M. AND PRAMOD KUMAR A . M . ] I.T.A. NO. 137 9 /AHD/201 5 ASSESSMENT YEAR: 20 1 2 - 13 NIRMA LIMITED .. . . APPELLANT NIRMA HOUSE ASHRAM ROAD AHMEDABAD. [PA N: AA ACN 5350 K ] VS. DY. COMMISSIONER OF INCOME TAX CENTRALISED PROCESSING CELL TDS GHAZIABAD. ... . . RESPONDENT APPEARANCES BY: H.C. SHAH FOR THE APPELLANT K. MADHUSUDAN FOR THE RESPONDENT DATE OF CONCLUDING T HE HEARING : 2 9 .07.2016 DATE OF PRONOUNC ING THE ORDER : 27 . 10.2016 O R D E R PER PRAMOD KUMAR AM : 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF LEARNED C IT(A) S ORDER DATED 2 4 TH FEBRUARY 2015 IN THE MATTER OF PROCESSI NG OF T DS RETURN UNDER SECTION 200A OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 201 2 - 1 3 ON THE FOLLOWING GROUNDS : - 1. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN P OINTS OF LAW AND FACTS. 2. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS GROSSLY ERRED IN CONFIRMING THAT WITHHOLDING TAX IS APPLICABLE @ 20% AS PE R SECTION 206AA I.T.A. NO. 137 9 /AHD/201 5 ASSESSMENT YEAR: 20 1 2 - 13 PAGE 2 OF 4 OF INCOME TAX ACT IRRE SPECTIVE OF NON APPLICABILITY OF WITHHOLDING TAX A S PER TREATY BETWEEN GOVERNMENT OF INDIA AND GOVERNMENT OF NEPAL. 3. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS GROSSLY ERRED IN CO NFIRMING THE INTEREST ON SHORT DEDUCTION FOR RS.1 7 7 84 / - 2. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. ONE OF THE ADJUSTMENTS MADE DURING THE COURSE OF PROCESSING OF TDS RETURNS UNDER SE CTION 200A WAS ON ACCOUNT O F SHORT DEDUCTION OF TAX A T SOURCE FROM PAYMENT TO A NON - RESIDENT. THERE IS NO DISPUTE THAT THIS NON - RESIDENT HAD NO TAX LIABILITY UNDER THE RELEVANT TAX TREATY BUT SINCE HE HAD NOT FURNISHED THE PERMANENT ACCOUNT NUMBER THE TAX WITHHOLDING LIABILITY WAS HELD APPLICABLE @ 20% IN VIEW OF THE PROVISIONS OF SECTION 206AA. ON THIS BASIS SHORT DEDUCTION OF TAX WAS COMPUTED UNDER SECTION 201(1) AND CONSEQUENTIAL INTEREST LIABILITY UNDER SECTION 201(1A). AGGRIEVED ASSESSEE RAISED THE ISSUE ABOUT INCORRECTNES S OF THIS ADJUSTMENT ON ACCOUNT OF ALLEGED SHORT DEDUCTION. LEARNED CIT ( A ) JUSTIFIED THE ADJUSTMENT ON THE GROUND THAT THE APPELLANT HAD NOT C LAIMED ANY DTAA BENEFIT IN THE TDS STATEMENT FILED BY THE ASSESSEE AND SO IN THE ABSENCE OF PAN T HE TDS @ 20% AS PER SECTION 206AA WAS RIGHTLY CHARGED . THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION 4. IT IS ONLY ELEMENTARY THAT IN A CASE IN WHICH A TAX TREATY (I.E. DOUBLE TAXATION AVOIDANCE AGREEMENT) IS APPLICABLE THE PROVISIONS OF THE INCOME TAX ACT 1961 A RE APPLICABLE ONLY TO THE EXTENT THESE PROVISIONS ARE MORE BENEFICIAL TO THE ASSESS EE. SECTION 90(2) WHICH IS QUITE CATEGORICAL IN THIS REGARD PROVIDE AS FOLLOWS : - I.T.A. NO. 137 9 /AHD/201 5 ASSESSMENT YEAR: 20 1 2 - 13 PAGE 3 OF 4 SECTION 90(2) (2) WHERE THE CENTRAL GOVERNMENT HAS ENTERED INTO AN AGREEMENT WITH THE GOVERNMENT OF ANY COUNTRY OUTSIDE INDIA OR SPECIFIED TERRITORY OUTSIDE INDIA AS THE CASE MAY BE UNDER SUB - SECTION (1) FOR GRANTING RELIEF OF TAX OR AS THE CASE MAY BE AVOIDANCE OF DOUBLE TAXATION THEN IN RELATION TO THE ASSESSEE TO WHOM SUCH AGREEMENT APPLIES THE PROVISIONS OF THIS ACT SHALL APPLY TO THE EXTENT THEY ARE MORE BE NEFICIAL TO THAT ASSESSEE. 5. CLEARLY THE PROVISIONS OF SECTION 206AA CANNOT BE FORCED ON AN ASSESSEE TO WHOM A DOUBLE TAXATION AVOIDANCE AGREEMENT APPLIES. THIS LEGAL POSITION IS UNAMBIGUOUS AND NOT DEPENDENT ON A SPECIFIC CLAIM BY THE ASSESSEE. ON CE THIS LEGAL POSITION IS BEYOND ANY DOUBT OR CONTROVERSY AS CERTAINLY THIS POSITION IS APPLICATION OF SECTION 206AA IN SUCH A CASE IS MISTAKE APPARENT FROM RECORD AND BEYOND THE SCOPE OF PERMISSIBLE ADJUSTMENTS UNDER SECTION 200A. THE IMPUGNED ADJUSTME NT WAS CLEARLY VITIATED IN LAW AND OUGHT TO H AVE BEEN DELETED BY THE LEARNED CIT(A). AS A COROLLARY TO THE DELETION OF THIS ADJUSTMENT THE RELATED INTEREST DEMAND UNDER SECTION 201(1A) MUST ALSO BE DELETED. 6. IN VIEW OF THE ABOVE DISCUSSIONS AS ALSO BE ARING IN MIND ENTIRETY OF THE CASE WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNE D ADJUSTMENTS. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7 . IN THE RESULT THE APPEAL IS PARTLY A LLOWED IN THE TERMS INDICA TED A BOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 27 TH DAY OF OCTOBER 2016. SD/ - SD/ - R.P. TOLANI PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 27 TH DAY OF OCTOBER 2016. I.T.A. NO. 137 9 /AHD/201 5 ASSESSMENT YEAR: 20 1 2 - 13 PAGE 4 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD