ACIT, Nashik v. The General manager, Latur

ITA 1487/PUN/2012 | 2008-2009
Pronouncement Date: 23-10-2013 | Result: Dismissed

Appeal Details

RSA Number 148724514 RSA 2012
Assessee PAN AABCB5576G
Bench Pune
Appeal Number ITA 1487/PUN/2012
Duration Of Justice 1 year(s) 3 month(s) 18 day(s)
Appellant ACIT, Nashik
Respondent The General manager, Latur
Appeal Type Income Tax Appeal
Pronouncement Date 23-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-10-2013
Assessment Year 2008-2009
Appeal Filed On 05-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R. K. PANDA ACCOUNTANT MEMBER ITA NOS. 1479 TO 1487/PN/2012 (ASSESSMENT YEARS : 2000-01 TO 2008-09) ASST. COMMISSIONER OF INCOME TAX TDS CIRCLE NASHIK. . APPELLANT VS. THE GENERAL MANAGER BHARAT SANCHAR NIGAM LIMITED TELEPHONE BHAVAN LATUR. PAN : AABCB5576G . RESPONDENT DEPARTMENT BY : MR. P. L. PATHADE ASSESSEE BY : MR. BHUPENDRA SHAH DATE OF HEARING : 17-10-2013 DATE OF PRONOUNCEMENT : 23-10-2013 ORDER PER SHAILENDRA KUMAR YADAV JM : ALL THESE APPEALS PERTAINING TO SAME ASSESSEE HAVE BEEN FILED BY THE REVENUE WHICH IN TURN HAS ARISE N FROM A CONSOLIDATED ORDER. THEREFORE THEY HAVE BEEN CLUBB ED AND HEARD TOGETHER AND A COMMON ORDER IS BEING PASSED F OR THE SAKE OF CONVENIENCE. 2. FIRSTLY WE TAKE-UP ITA NO.1479/PN/2012 WHICH IS TAKEN AS A LEAD CASE. THE SAID APPEAL HAS BEEN PREF ERRED BY THE REVENUE ON THE FOLLOWING GROUNDS:- ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS NOT IN DEFAULT FOR NON-DEDUCTION OF TA X U/S 194H IN RESPECT OF COMMISSION PAYMENTS TO PCO FRANCHISES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) ERRED IN HOLDING THAT TAX W AS NOT DEDUCTIBLE U/S 194H ON THE BASIS OF DECISION OF COD NOT PERMITTING CBDT TO PURSUE THESE APPEALS IN THE COURTS WHEN INFACT THE COMMITTEE STANDS WOUND U P W.E.F. 17-2-2011 IN VIEW OF OFFICE MEMORANDUM NO.A- 12034/01/2011-AD.I DATED 1-9-2011 ISSUED BY DIRECTOR (ADMINISTRATION) GOVT. OF INDIA CABINET SECRETARIATE (MANTRI MANDAL SACHIVALAYA) NEW DELHI . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HE FACT THAT PROVISO WAS INSERTED BY THE FINANCE ACT 2007 TO SECTION 194H W.E.F. 1-6-2007 EXEMPTING DEDUCTION OF TAX ON COMMISSION PAYMENTS WHILE FOR THE YEARS UND ER CONSIDERATION THE PROVISO WAS NOT APPLICABLE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HE FACT THAT WHEN CBDT'S LETTER DATED 10-12-2004 WAS COMMUNICATED TO THE ASSESSEE THE ASSESSEE ACCEPTED IN PRINCIPLE TO DEDUCT THE TAX AT SOURCE BUT ASKED FOR TIME FOR CREATING INFRASTRUCTURE AND ALSO CBDT'S INSTRUCTION DATED 16-7-2002 ONLY DIRECTED THAT TAX RECOVERY MAY NOT BE ENFORCED. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A GOVERNMENT OF INDIA UNDERTAKING FORMED BY DEMERGER OF DEPARTMENT OF TELECOMMUNICATION (DOT) IN OCTOBER 2 000. DURING THE ASSESSMENT PROCEEDINGS AO (TDS) HELD BS NL AS AN ASSESSEE IN DEFAULT FOR NOT DEDUCTING AND DEPOSI TING TDS ON COMMISSION PAID TO STD/PCO HOLDERS AND RAISED TH E COMPOSITE DEMAND OF TDS AT RS.1 07 87 872/- U/S.194 H ALONG WITH THE INTEREST OF RS.1 01 57 167/- U/S. 20 1(1A) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). TOTA L DEMAND ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 OF RS.2 09 45 039/- FOR A.YRS. 2000-01 TO 2008-09 I S DETAILED AS UNDER :- SR. NO. FINANCIAL YEAR TOTAL TAX SOUGHT TO BE DEDUCTED INCLUDING SURCHARGE TOTAL INTEREST TOTAL AMOUNT PAYABLE 1. 1999 - 2000 1434864 2094901 3529765 2. 2000 - 2001 1357330 1737382 3094712 3. 2001 - 2002 1375458 1554268 2929726 4. 2002 - 2003 1301088 1275067 2576155 5. 2003 - 2004 684131 574670 1258801 6. 2004 - 2005 2614965 1882775 4497740 7. 2005 - 2006 758566 455140 1213706 8. 2006 - 2007 1073623 515339 1588962 9. 2007 - 2008 187847 67625 255472 TOTAL 10787872 10157167 20945039 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER FOR A.YRS. 2000-01 TO 2008-09 MATTER WAS CARRIED BEFOR E THE FIRST APPELLATE AUTHORITY WHEREIN CIT(A) HELD AS U NDER : 5. THE CASE OF THE AO IN BRIEF IS THAT THE ASSES SEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE UNDER SECTION 194H FROM THE COMMISSION SO ALLOWED TO THE PCO OPERATORS. IT IS IN RESPECT OF THIS ALLEGED LAPSE O F NON DEDUCTION OF TAX AT SOURCE THAT THE AO HAS RAISED DEMANDS UNDER SECTION 194H READ WITH SECTION 201. I HAVE TAKEN INTO CONSIDERATION THE ORDERS U/S 201(1 ) & 201(1A) AND THE ORDER OF THE HON'BLE ITAT PUNE (29/05/2009) WHO DECIDED THE MATTER IN FAVOUR OF TH E APPELLANT HOLDING INTERALIA AS FOLLOWS: 'THE STAND TAKEN BY THE AUTHORITIES BELOW IS THUS CONTRARY TO THE STAND TAKEN BY THE CENTRAL BOARD OF DIRECT TAXES. WHILE AUTHORITIES BELOW HAVE TAKEN A STAND THAT THE PROSPECTIVE AMENDMENT IN SECTION 194H BY ITSELF DEMONSTRATES THAT THE TAXES WERE REQUIRED TO BE DEDUCTED AT SOURCE IN RESPECT OF PCO COMMISSION FOR EARLIER YEARS THE CENTRAL BOARD OF DIRECT TAXES IS OF THE VIEW THAT EXCEPT IN ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 CASES WHERE BSNL OR MTNL HAS DEDUCTED THE TAXES BUT NOT PAID OVER THE SAME TO THE TREASURY DEMANDS ARE NOT BE ENFORCED TILL THE MATTER IS SORTED OUT BY THE BOARD. WHEN SUCH IS THE STAND TAKEN BY THE CBDT ITSELF IT CANNOT BE SAID THAT IN VIEW OF THE INSERTION OF PROVISO TO SECTION 194H WI TH EFFECT FROM 1 ST JUNE 2007 IT IS BEYOND DOUBT OR CONTROVERSY THAT SO FAR AS PERIOD PRIOR TO THIS AMENDMENT IS CONCERNED THE TAX DEDUCTION AT SOURCE REQUIREMENTS UNDER SECTION 194H APPLIED ON PAYMENTS OF COMMISSION TO PCO FRANCHISEES. LEARNED COMMISSIONER (APPEALS) DID NOT THEREFORE HAVE ANY GOOD REASONS TO DISREGARD THE BINDING JUDICIAL PRECEDENT. IT CANNOT BE OPEN TO SUBORDINATES OR COORDINATE JUDICIAL FORUM TO DISREGARD THE DECISION OF THE TRIBUNAL IN ASSESSEE'S OWN CASE MERELY ON THE GROUND THAT THE LATER AMENDMENT IN LAW WITH EFFECT FROM 1 ST JUNE 2007 MUST BE INFERRED TO BE CLARIFYING THE POSITION PRIOR TO THE SAID AMENDMENT. THE DISTINCTION MADE OUT BY THE LEARNED CIT(A) THEREFORE DOES NOT MEET OUR APPROVAL. HAVING REGARD TO THE DISCUSSIONS ABOUT BE IMPACT OF CBDT CIRCULARS WE MAY ALSO ADD THAT IT IS ONLY ELEMENTARY THAT THE CIRCULARS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES ARE BINDING ON THE ASSESSEE ONLY TO THE LIMITED EXTENT OF THESE CIRCULARS BEING BENEFICIAL IN NATURE. IN OTHER WORDS AN ASSESSEE CANNOT BE SADDLED WITH A LIABILITY ONLY ON THE GROUND THAT CIRCULAR ISSUED BY THE CBDT HOLDS SO; SUCH A LIABILITY HAS TO BE SUPPORTED BY THE CLEAR PROVISIONS OF STATUTE. REVENUE THUS CANNOT DERIVE ANY SUPPORT FORM RELIANCE ON THE CIRCULARS ISSUED BY THE CBDT. WE HAVE ALSO NOTED THAT THE COMMITTEE ON DISPUTES VIDE MINUTES OF MEETING DATED 18 TH MARCH 2008 HAS DECLINED PERMISSION TO THE CENTRAL BOARD OF DIRECT TAXES TO PURSUE LITIGATION AGAINST THE ASSESSEE ON THE GROUND THAT 'NO QUESTION OF FACTS OR LAW WERE INVOLVED' AND THEREBY ASKED THE CENTRAL BOARD OF DIRECT TAXES TO LET THE MATTER REACH FINALITY BY ACCEPTING THE ORDER PASSED BY THE TRIBUNAL. IN THIS BACKGROUND WE ARE REMINDED OF THE OBSERVATIONS MADE BY THE HON'BLE SUPREME COURT IN THE CASE OF RADHASWAMI SATSANG VS CIT(193 ITR 321) THAT 'WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RES JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEEDING.' AND THAT 'AGAIN EACH YEAR BEING A UNIT WHAT IS DECIDED IN ONE YEAR MAY OR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUNDS AS FACT ONE WAY OR THE OTHER AND THE PARTIES HAVE ALLOWED THE POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER IT WOULD NOT BE APPROPRIATE TO ALTER THE POSITION IN THE SUBSEQUENT YEAR.' THE FACTS OF THE PRESENT CASE ARE THAT NOT ONLY FOR DIFFERENT ASSESSMENT YEARS BUT FOR THE SAME ASSESSMENT YEARS BUT IN RESPECT OF DIFFERENT UNITS OF THE ASSESSEE DIFFERENT TREATMENT IS BEING GIVEN . SUCH AN INCONSISTENCY AND HYPER TECHNICAL APPROACH PARTICULARLY WHEN THE ASSESSEE IS A PUBLIC SECTOR UNDERTAKING IS RATHER INAPPROPRIATE AND IT IS CONTRARY TO THE SPIRIT BEHIND FORMATION O F COMMITTEE ON DISPUTES IN THE CABINET SECRETARIAT. WHEN ON THE SAME SET OF FACTS AND WITHOUT ANY CHANGES IN LAW THE COMMITTEE ON DISPUTES HAVE DECLINED PERMISSION TO THE CENTRAL BOARD OF DIRECT TAXES TO PURSUE THE MATTER AGAINST ASSESSEE'S GURGAON UNIT IT IS NOT APPROPRIATE TO RAISE SIMILA R DEMANDS ON ASSESSEE'S OTHER UNITS. BE THAT AS IT MAY HAVING HELD THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY TRIBUNAL'S ORDER AND THAT THE SAID ORDER HAS BINDING PRECEDENCE VALUE FOR THAT REASON ALONE THE APPEAL FILED BY ASSESSEE MUST BE ALLOWED.' 5. IT WAS ALSO OBSERVED THAT REVENUES APPEAL HAS B EEN DISMISSED BY THE HONBLE MUMBAI HIGH COURT (AURANGA BAD BENCH) AGAINST THE ORDER OF THE ITAT. IT WAS ALSO P OINTED OUT THAT CIT(A) ON DISPUTES HELD ON 10.02.2011 ON REFER ENCE BY CBDT/PSU IN THE CASE OF M/S. BHARAT SANCHAR NIGAM L TD. A.YRS. 2002-03 TO 2008-09 2000-01 2002-03 TO 2008 -09 REVEALS THAT COD DECIDED NOT TO PERMIT CBDT TO PURS UE THESE APPEALS BEFORE THE HIGH COURT. IN VIEW OF THI S IT WAS HELD THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MA KING THE DEMANDS U/S.194H R.W.S. 201 OF THE ACT. THE DEMANDS FOR ABOVE YEARS U/S. 201(1) & 201(1A) R.W.S.194H OF THE ACT WAS DELETED. ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 6. BEFORE US THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THIS ISSUE IS COVERED BY THE ORDER O F CO-ORDINATE BENCH AND THE CIT(A) WAS JUSTIFIED IN A LLOWING THE APPEAL IN FAVOUR OF ASSESSEE BY FOLLOWING THE C O-ORDINATE BENCH DECISION. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. IN VIEW OF OUR ABOV E DISCUSSION WE ARE NOT INCLINED TO INTERFERE WITH T HE FINDING OF THE CIT(A) WHO HAS RIGHTLY HELD THAT THE ASSESS ING OFFICER WAS NOT JUSTIFIED IN MAKING DEMANDS U/S.194H R.W.S. 201 OF THE ACT AND CONSEQUENTLY DEMANDS U/S. 201(1) & 201( 1A) R.W.S.194H OF THE ACT WHICH WAS RIGHTLY DELETED BY CIT(A). WE UPHOLD THE SAME AND THE GROUNDS TAKEN BY THE REV ENUE ARE DISMISSED. FACTS BEING SIMILAR IN OTHER REVENUE S APPEALS SO FOLLOWING THE SAME REASONING WE DISMISS THE REVENUES APPEALS FOR THE REMAINING ASSESSMENT YEAR S AS WELL. 7. AS A RESULT ALL THE APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF OCTOBER 2013. SD/- SD/- (R. K. PANDA) (SHAILENDRA KUMA R YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED : 23 RD OCTOBER 2013 SUJEET ITA NOS. 1479 TO 1487/PN/2012 A.YS. 2000-01 TO 2008-09 COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II NASHIK; 4) THE CIT-II NASHIK; 5) THE DR A BENCH I.T.A.T. PUNE; 6) GUARD FILE. //TRUE COPY// BY ORDER SR. PRIVATE SECRETARY I.T.A.T. PUNE