DCIT (TDS)-2(1), MUMBAI v. KONIGA INTERANATIONAL P. LTD, MUMBAI

ITA 1857/MUM/2010 | 2008-2009
Pronouncement Date: 31-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 185719914 RSA 2010
Bench Mumbai
Appeal Number ITA 1857/MUM/2010
Duration Of Justice 10 month(s) 21 day(s)
Appellant DCIT (TDS)-2(1), MUMBAI
Respondent KONIGA INTERANATIONAL P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2008-2009
Appeal Filed On 09-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGHA VAN (JM) I.T.A.NO.1857/MUM/2010 (A.Y. 2008-09) DY.COMMR. OF INCOME-TAX-2(1) R.NO.702 SMT.K.G.MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI RD. MUMBAI-400 002. VS. KONIGA INTERNATIONAL P.LTD. PLOT NO.25 MAROL CO- OP.INDL.ESTATE M.V. ROAD MUMBAI-400 059. APPELLANT RESPONDENT APPELLANT BY SHRI SANDEEP GOYAL. RESPONDENT BY SHRI VI JAY MEHTA. O R D E R PER R.S. SYAL AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 30-12-2009 IN RELATION TO THE ASSTT. YEAR 2008-0 9. 2. ALL THE GROUNDS TAKEN IN THIS APPEAL ARE AGAINST THE ADMISSION OF ADDITIONAL EVIDENCE BY THE CIT(A) IN VIOLATION OF RULE 46A OF I.T. RULES. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AO RECEIVED SOME INFORMATI ON ABOUT THE ASSESSEE NOT COMPLYING WITH THE PROVISIONS OF TDS. NOTICE U/S.13 3(6) WAS ISSUED. IN THE ORDER PASSED U/S.201 READ WITH SEC. 40 (A)(IA) THE AO NO TED THAT THE ASSESSEE MADE PAYMENTS OF RS.97 04 607/- TO VARIOUS PARTIES FOR S ERVICES WHICH WERE PRESUMED AS PROFESSIONAL SERVICES AS NATURE OF SERVICES WAS NOT SPECIFIED IN TAX AUDIT REPORT. AS THE ASSESSEE DID NOT DEDUCT ANY TAX AT SOURCE ON THE SAID AMOUNT THE AO TREATED THE ASSESSEE AS IN DEFAULT FOR A SUM OF RS.10 99 532/- @ 11.33% ITA 1857/MUM/10 2 ON RS.97 04 607/-. IN ADDITION TO THAT THE ASSESSE E WAS ALSO HELD TO BE LIABLE FOR INTEREST U/S.201(1A). 3. IN THE FIRST APPEAL THE ASSESSEE FURNISHED DETA ILS OF PAYMENTS MADE TOTALING RS.97 04 607/- AS REPRODUCED ON PAGE 3 OF THE IMPUGNED ORDER CLASSIFYING SUCH PAYMENTS UNDER THREE BROAD HEADS. IT WAS CLAIMED THAT WHEREAS HEAD A CONSISTED OF PAYMENTS MADE TO CONTRACTORS COVERED U/S.194C HEAD B CONSISTED OF PAYMENT OF INTEREST; AND HEAD C COM PRISED OF PAYMENT OF PROFESSIONAL CHARGES COVERED U/S.194J. THE LD. CIT (A) ADMITTED THESE DETAILS WHICH WERE FILED BEFORE HIM FOR THE FIRST TIME AND DIRECTED THE AO TO APPLY THE PROVISIONS OF SEC. 194C IN RESPECT OF PAYMENTS UNDE R CATEGORY A DEDUCT TAX AT SOURCE @ 20.60% ON THE PAYMENT OF INTEREST COVERED UNDER CATEGORY B AND AT 10.3% U/S.194J IN RESPECT OF PAYMENTS UNDER CATEGO RY C. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED FROM THE ORDER OF THE DCIT (T DS) THAT THE ASSESSEE DID NOT FURNISH ANY DETAILS OF THE PAYMENTS OF RS.97.04 LAK HS. IN THE ABSENCE OF SUCH DETAILS THE AO CONSIDERED THESE PAYMENTS AS COVERE D U/S.194J IN THE NATURE OF PROFESSIONAL SERVICES. IT WAS FOR THE FIRST TIME TH AT THE ASSESSEE CAME OUT WITH DETAILS OF SUCH PAYMENTS TO VARIOUS PARTIES BEFORE THE LD. CIT(A) WITH THE CONTENTION THAT THE PAYMENTS UNDER CATEGORY A WER E LIABLE TO BE CONSIDERED U/S.194C. THE LD. CIT(A) WITHOUT ALLOWING ANY OPPO RTUNITY TO THE AO ADMITTED THIS ADDITIONAL EVIDENCE AND ACCEPTED THE ASSESSEE S CONTENTION FOR CONSIDERING THESE PAYMENTS UNDER CATEGORY A AS LIABLE TO TAX U/S.194C @ 2.06%. THERE IS NO DISPUTE ON THE ITEMS INCLUDED UNDER CATEGORY B AND C AS THE ASSESSEE ITSELF SUBMITTED THAT CATEGORY B REPRESENTED PAYMENT OF INTEREST AND CATEGORY C AS ITA 1857/MUM/10 3 PAYMENT OF PROFESSIONAL CHARGES DEDUCTION OF TAX A T SOURCE ON WHICH PAYMENTS OUGHT TO HAVE BEEN MADE AT A RATE EQUAL TO OR HIGHE R THAN 11.33% U/S.194J. 5. THE LD. A.R. HAS PLACED ON RECORD A COPY OF THE ORDER PASSED BY THE AO GIVING EFFECT TO THE CIT(A)S ORDER ACCEPTING PAYM ENTS TO THE TUNE OF RS.74.24 LAKHS UNDER CATEGORY A AS COVERED U/S.194C. IT WA S SUBMITTED THAT SINCE THE AO HAD ACCEPTED THESE PAYMENTS AS HAVING BEEN MADE TO CONTRACTORS SO NO INTERFERENCE SHOULD BE MADE IN THE IMPUGNED ORDER ON THIS SCORE. WE ARE NOT SATISFIED WITH THIS SUBMISSION FOR THE OBVIOUS REAS ON THAT THE AO ACCEPTED THESE PAYMENTS AS COVERED U/S.194C IN THE ORDER GIVING EF FECT TO THE CIT(A)S ORDER IN WHICH THE FIRST APPELLATE AUTHORITY DIRECTED THE AO TO CONSIDER THESE PAYMENTS AS HAVING BEEN COVERED U/S.194C. THERE WAS NO OPTION W ITH THE AO TO TINKER WITH THE DIRECTION OF THE LD. CIT(A) AND CONSIDER THEIR INCLUDIBILITY WITHIN THE PURVIEW OF SEC. 194J AS IT WOULD HAVE AMOUNTED TO GOING B EYOND THE ORDER OF THE FIRST APPELLATE AUTHORITY. AS THE REVENUE IS AGGRIEVED AG AINST THE DIRECTION OF THE LD. CIT(A) GIVEN IN THE IMPUGNED ORDER TO THE EXTENT TH AT ADDITIONAL EVIDENCE WAS ADMITTED AND THE CASE WAS DECIDED IN VIOLATION OF R ULE 46A IN OUR CONSIDERED OPINION THERE IS MERIT IN THE APPEAL OF THE REVENU E. IN THE ABSENCE OF THE ASSESSEE HAVING FILED ANY DETAIL BEFORE THE AO HE COULD NOT AT ANY STAGE OF THE PROCEEDINGS COULD GET OPPORTUNITY OF EXAMINING WH ETHER THE PAYMENTS OF RS.74.24 LAKHS ACTUALLY FELL U/S.194C OR 194J. UNDE R SUCH CIRCUMSTANCES WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF AO FOR CONSIDERING THE INCLUDIBILITY OF RS.74.24 LAKHS BEING THE PAYM ENTS UNDER CATEGORY A WITHIN THE PURVIEW OF SEC. 194C OR 194J AS PER LAW. NEED LESS TO SAY THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF HEARING BY T HE AO AND WILL BE AT LIBERTY TO LEAD ANY EVIDENCE IN ITS DEFENCE. ITA 1857/MUM/10 4 6. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THE 31ST DAY OF JANUARY 2011. SD/- SD/- (SMT. ASHA VIJAYARAGHAVAN) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 31ST JANUARY 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSE. 3.CIT(A)-14 MUMBAI. 4 CIT (TDS) MUMBAI. 5.DR A BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA 1857/MUM/10 5 DETAILS DATE INITIALS DESIGNA TION 1. DRAFT DICTATED ON 25-01-2011 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 25-01-2011 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *