ACIT, New Delhi v. M/s Moradabad Toll Road Company, New Delhi

ITA 1683/DEL/2011 | misc
Pronouncement Date: 25-11-2011 | Result: Dismissed

Appeal Details

RSA Number 168320114 RSA 2011
Assessee PAN AABCM9154B
Bench Delhi
Appeal Number ITA 1683/DEL/2011
Duration Of Justice 7 month(s) 18 day(s)
Appellant ACIT, New Delhi
Respondent M/s Moradabad Toll Road Company, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 25-11-2011
Date Of Final Hearing 15-11-2011
Next Hearing Date 15-11-2011
Assessment Year misc
Appeal Filed On 07-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NOS. 1682 1683/DEL/11 ASSTT. YEARS 2002-03 & F.Y. 2003-04 ACIT CIRCLE 50(1) ROOM NO. 503 AAYAKAR BHAWAN LAXMI NAGAR NEW DELHI. VS M/S. MORADABAD TOLL ROAD COMPANY G-5 & 6 (NHAI CAMPUS) SEC-10 DWARKA NEW DELHI. AABCM9154B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI A.K. MONGA SR. DR RESPONDENT BY: SHRI S.S. GUPTA CA ORDER PER RAJPAL YADAV JM: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTAN CE OF REVENUE AGAINST THE COMMON ORDER OF LD. CIT(A) DATE D 24 TH JANUARY 2011 PASSED FOR ASSTT. YEAR 2002-03 & 2003 -04. THE GROUNDS OF APPEAL TAKEN BY REVENUE ARE VERBATIM SAM E. ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 2 THEREFORE FOR THE FACILITY OF REFERENCE WE TAKE N OTE OF THE GROUNDS RAISED IN ITA NO. 1682/DEL/11 WHICH READ AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN 1. HOLDING THAT THE TAX AUDIT REPORT ONLY STATES TH AT CERTAIN LIABILITIES HAVE NOT BEEN PROVIDED FOR AND DOES NOT STATE THAT ANY PAYMENT MADE BY THE ASSESSEE TO THE CONTRACTOR S. 2. IGNORING THE FINDINGS IN THE AUDIT REPORT (ANNEX URE-III) THAT AMOUNTS WERE CREDITED IN THE ACCOUNTS OF THE CONTRA CTORS ON 31.3.2003 BUT NO TDS WAS DEDUCTED ON SUCH CREDITS. 3. HOLDING THAT AS THE DEDUCTEES HAVE ALREADY PAID TAX AND THEIR ASSESSMENT HAVE BECOME FINAL THERE IS NO ENFORCEABL E DEMAND U/S 201(1) THEREFORE INTEREST CHARGED U/S 20 1(1A) IS LIABLE TO BE STRUCK DOWN WHICH IS IN CONTRAVENTION TO THE FINDINGS OF THE APEX COURT IN THE CASE OF M/S. HIND USTAN COCA COLA BEVERAGES P. LTD. IN FACT THE HBLE APEX COURT HAS HELD THAT THE LIABILITY U/S 201(1A) REMAIN UNALTERED. 4. THE REVENUE INVOLVED IN THIS CASE IS LESS THAN THE MONETARY LIMITS FIXED BY THE CBDT FOR FILING APPEAL BUT SINC E THE ORDER IS IN CONTRAVENTION OF APEX COURTS JUDGEMENT IN THE C ASE OF HINDUSTAN COCA COLA BEVERAGES LTD. THE APPEAL IS BE ING FILED IN VIEW OF THE PARA 8(B) OF CBDT INSTRUCTION NO. 03 /2011 DATED 9.2.2011. 2. LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUB MITTED THAT LD. AO HAS PASSED A COMMON ORDER FOR BOTH THE ASSTT. YEARS U/S 201(1) 201(1A) OF THE INCOME TAX ACT ON 4 TH MARCH 2009 WHEREBY HE TREATED THE ASSESSEE IN DEFAULT ON ACCOUNT OF SHORT DEDUCTION OF TAX IN F.Y. 2002-03 AND 2003-04. HE WORKED OUT THE AMOUNT AT `7 76 786/- FOR BOTH THE ASSTT. Y EARS WHICH INCLUDES THE INTEREST COMPONENTS. THE AO HAS OBSERV ED THAT ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 3 THE TOTAL TAX SOUGHT DEDUCTED BY THE ASSESSEE IN F. Y. 2002-03 IS ` 3 78 874/-. THE INTEREST ON THIS AMOUNT HAS BE EN WORKED OUT AT ` 2 39 638/- AND THEREFORE TOTAL DEMAND IN F.Y. 2002-03 HAS BEEN WORKED OUT AT RS. 6 18 512./-. IN F.Y. 20 03-04 TOTAL AMOUNT OF TAX DEDUCTED SHORT BY ASSESSEE HAS BEEN W ORKED OUT AT `.1 05 450/- AN INTEREST ON THIS AMOUNT HAS BEEN WORKED OUT AT `. 52 725/-. A TOTAL DEMAND IN F.Y. 2003-04 REL EVANT TO ASSTT. YEAR 2004-05 HAS BEEN WORKED OUT AT `. 1 58 175/-. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITT ED THAT AS FAR AS ASSTT. YEAR 2004-05 THE APPEAL OF THE REVEN UE IS NOT MAINTAINABLE BECAUSE THE TAX EFFECT IS LESS THAN `. 2 LACS. APART FROM THIS ASPECT HE FURTHER POINTED OUT THAT ISSUE IN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. NH K JAPAN BROADCASTING CORPORATION REPORTED IN 305 ITR 137 ( DELHI). IN THIS DECISION HONBLE HIGH COURT HAS UPHELD THE CO NCLUSION OF THE TRIBUNAL WHEREIN TRIBUNAL HAS HELD THAT WHERE N O TIME LIMIT HAS BEEN PROVIDED IN THE ACT FOR INITIATION OF A PR OCEEDING THEN IT SHOULD BE INITIATED IN A REASONABLE TIME. THE RE ASONABLE TIME FOR TAKING ACTION U/S 201 HAS BEEN LAID DOWN AS FOU R YEARS. THE ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 4 HONBLE HIGH COURT AFTER REFERRING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BHATINDA DISTRICT CO-O P. MILK PRODUCERS UNION LTD. REPORTED IN (2007) 11 SCC 363 HAS OBSERVED THAT TIME LIMIT OF FOUR YEARS PROVIDED BY THE TRIBUNAL IS MORE THAN A REASONABLE TIME AND IF ANY ACTION HA S BEEN TAKEN AFTER EXPIRY OF THIS PERIOD THEN SUCH ACTION WOULD BE BARRED BY THE LIMITATION. LD. COUNSEL FOR THE ASSES SEE ON THE STRENGTH OF THIS DECISION HAS OBSERVED THAT IN BOTH THE YEARS ACTION OUGHT TO HAVE BEEN TAKEN BY 31 ST MARCH 2007 AND 31 ST MARCH 2008. THE ORDER U/S 201 HAS BEEN PASSED ON 4 TH MARCH 2009 WHICH IS BEYOND THE PERIOD OF FOUR YEARS. HENC E NOT SUSTAINABLE IN BOTH THE YEARS. THE LD. DR WAS UNABL E TO CONTROVERT THE CONTENTION OF LD. COUNSEL FOR THE AS SESSEE. 3. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. WITHOUT GOING INTO AN Y OTHER ASPECT WE FIND THAT ORDER PASSED BY THE AO U/S 201 READ WITH SECTION 201A IS NOT SUSTAINABLE ON ACCOUNT OF EXPIR Y OF LIMITATION FOR TAKING ANY ACTION UNDER THESE SECTIO NS. THE HONBLE DELHI HIGH COURT HAS CONSIDERED THIS ASPECT ELABORATELY ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 5 IN THE CASE OF NHK JAPAN BROADCASTING CORPORATION. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT ARE AS UNDER :- 16. 16. 16. 16. INSOFAR AS BHATINDA DISTRICT CO-OP. MILL (P.) U NION LTD.S CASE (SUPRA) IS CONCERNED THE QUESTION THAT AROSE BEFOR E THE SUPREME COURT WAS REGARDING INITIATION OF PROCEEDINGS BY EX ERCISE OF JURISDICTION BY THE STATUTORY AUTHORITY. THE SUPREM E COURT HELD THAT EXERCISE OF JURISDICTION MUST BE WITHIN A REASONABL E PERIOD OF TIME AND CONSIDERING THE PROVISIONS OF THE PUNJAB GENERA L SALES TAX ACT 1948 IT WAS HELD THAT A REASONABLE PERIOD OF TIME FOR INITIATING PROCEEDINGS WOULD BE FIVE YEARS. 17. 17. 17. 17. THERE IS A QUALITATIVE DIFFERENCE BETWEEN BHARA T STEEL TUBES LTD.S CASE (SUPRA) AND BHATINDA DISTRICT CO-OP. MI LL (P.) UNION OF LTD.S CASE (SUPRA ). IN THE FORMER CASE THE QUEST ION PERTAINED TO COMPLETION OF PROCEEDINGS WHILE IN THE LATTER CASE IT PERTAINED TO INITIATION OF PROCEEDINGS. WE ARE CONCERNED WITH IN ITIATION OF PROCEEDINGS. 18. 18. 18. 18. INSOFAR AS THE INCOME-TAX ACT IS CONCERNED OUR ATTENTION HAS BEEN DRAWN TO SECTION 153(1)(A) THEREOF WHICH PRESC RIBES THE TIME- LIMIT FOR COMPLETING THE ASSESSMENT WHICH IS TWO Y EARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. IT IS WELL-KNOWN THAT THE ASSESSMENT YE AR FOLLOWS THE PREVIOUS YEAR AND THEREFORE THE TIME-LIMIT WOULD BE THREE YEARS FROM THE END OF THE FINANCIAL YEAR. THIS SEEMS TO B E A REASONABLE PERIOD AS ACCEPTED UNDER SECTION 153 OF THE ACT TH OUGH FOR COMPLETION OF ASSESSMENT PROCEEDINGS. THE PROVISION S OF RE- ASSESSMENT ARE UNDER SECTIONS 147 AND 148 OF THE AC T AND THEY ARE ON A COMPLETELY DIFFERENT FOOTING AND THEREFORE D O NOT MERIT CONSIDERATION FOR THE PURPOSES OF THIS CASE. EVEN THOUGH THE PERIOD OF THREE YEARS WOULD BE A RE ASONABLE PERIOD AS PRESCRIBED BY SECTION 153 OF THE ACT FOR COMPLETION OF PROCEEDINGS WE HAVE BEEN TOLD THAT THE INCOME-TAX APPELLATE TRIBUNAL HAS IN A SERIES OF DECISIONS SOME OF WHI CH HAVE BEEN MENTIONED IN THE ORDER WHICH IS UNDER CHALLENGE BEF ORE US TAKEN THE VIEW THAT FOUR YEARS WOULD BE A REASONABLE PERI OD OF TIME FOR INITIATING ACTION IN A CASE WHERE NO LIMITATION IS PRESCRIBED. ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 6 THE RATIONALE FOR THIS SEEMS TO BE QUITE CLEAR - I F THERE IS A TIME-LIMIT FOR COMPLETING THE ASSESSMENT THEN THE T IME-LIMIT FOR INITIATING THE PROCEEDINGS MUST BE THE SAME IF NOT LESS. NEVERTHELESS THE TRIBUNAL HAS GIVEN A GREATER PERI OD FOR COMMENCEMENT OR INITIATION OF PROCEEDINGS. WE ARE NOT INCLINED TO DISTURB THE TIME-LIMIT OF FO UR YEARS PRESCRIBED BY THE TRIBUNAL AND ARE OF HE VIEW THAT IN TERMS OF THE DECISION OF THE SUPREME COURT IN BHATINDA DISTRICT CO-OP. MIL (P.) UNION LTD.S CASE (SUPRA) ACTION MUST BE INITIATED BY THE COMPETENT AUTHORITY UNDER THE INCOME-TAX ACT WHERE NO LIMITAT ION IS PRESCRIBED AS IN SECTION 201 OF THE ACT WITHIN THAT PERIOD OF FOUR YEARS. LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT THE DEPARTMENT CAME TO KNOW THAT THE ASSESSEE WAS AN AS SESSEE IN DEFAULT ONLY IN NOVEMBER 1998 WHEN A SURVEY WAS CO NDUCTED AND IT CAME TO BE KNOWN ONLY THEN THAT WHEN THE ASSESSEE H AD NOT DEDUCTED TAX AT SOURCE ON THE GLOBAL SALARY. WE ARE OF THE OPINION THAT THE DATE OF KNOWLEDGE IS NOT RELEVANT FOR THE PURPOSES OF EXERCISING JURISDICTION INSOFAR AS THE PROVISIONS O F THE INCOME-TAX ACT ARE CONCERNED. IF IT WERE SO THE LIMITATION PE RIOD AS FOR EXAMPLE PRESCRIBED UNDER SECTION 147/148 OF THE ACT WOULD B ECOME MEANINGLESS IF THE CONCEPT OF KNOWLEDGE IS IMPORTED INTO THE SCHEME OF THE ACT. 4. SINCE THE LD. CIT(A) HAS DECIDED THE ISSUES IN F AVOUR OF THE ASSESSEE THOUGH ON OTHER POINTS BUT WE ARE OF THE VIEW THAT UNDER RULE 27 OF ITAT RULES ASSESSEE CAN SUPPORT T HE ORDER OF LD. CIT(A) ON ANY OTHER ISSUES WHICH HAS BEEN OTHER WISE DECIDED AGAINST IT. ASSESSEE HAS EVERY RIGHT TO RAI SE THE QUESTION OF LIMITATION. WE FIND THAT BOTH THE ORDER S ARE PASSED BEYOND A PERIOD OF FOUR YEARS WHICH HAS BEEN LAID D OWN IN THE HONBLE HIGH COURTS DECISION. THE COMMON ORDER PAS SED U/S 201 READ WITH SECTION 201A IN BOTH THE ASSTT. YEARS IS NOT ITA NOS. 1682 1683/DEL/11 A.Y YEAR 2003-04& F.Y. 2004-05 7 SUSTAINABLE. CONSEQUENTLY THE APPEALS OF THE REVEN UE ARE DEVOID OF ANY MERIT. HENCE REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH NOVEMBER 2011. SD/- SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.11.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT