Ramkrishna Vedanta Math, Kolkata v. ITO, Ward-59(1), Kolkata, Kolkata

ITA 477/KOL/2012 | 2005-2006
Pronouncement Date: 31-07-2012 | Result: Allowed

Appeal Details

RSA Number 47723514 RSA 2012
Assessee PAN AAATR2793M
Bench Kolkata
Appeal Number ITA 477/KOL/2012
Duration Of Justice 4 month(s) 1 day(s)
Appellant Ramkrishna Vedanta Math, Kolkata
Respondent ITO, Ward-59(1), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 31-07-2012
Assessment Year 2005-2006
Appeal Filed On 29-03-2012
Judgment Text
I.T.A. NO.: 477 478 AND 479/KOL /2012 ASSESSMENT YEAR: 2005 - 06 2006 - 07 2008 - 09 PAGE 1 OF 5 IN THE INCOME TAX APPELLA TE TRIBUNAL KOLKATA C BENCH KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SHRI MAHAVIR SINGH (JUDICIAL MEMBER) I.T.A. NO. : 477 478 AND 479/ KOL/2012 ASSESSMENT YEAR : 2005 - 06 2006 - 07 2008 - 09 RAMAKRISHNA VEDANTA MATH .APPELLANT 19A AND B RAJA RAJAKRISHNA STREET KOLKATA 700 006 PAN : AAATR2793M VS. INCOME TAX OFFICER WARD 59 (1) KOLKATA . RESPONDENT APPEARANCES BY: MIRAJ D SHAH FOR THE APPELLANT AMITAVA RAY FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JULY 27 2012 DATE OF PRONOUNCING THE ORDER : JULY 31 2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THESE APPEAL S THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF CIT(A)S SEPARATE BUT MATERIALLY IDENTICAL ORDER S DATED 5 TH AUGUST 2011 IN THE MATTER OF DEMANDS RAISED UNDER SECTION 201(1) AND 201(1A) R.W.S. 194 OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YE ARS 2005 - 06 2006 - 07 AND 2008 - 09. 2. THE APPEALS ARE TIME BARRED BY 93 DAYS BUT THE ASSESSEE HAS MOVED A PETITION SEEKING CONDONATION OF THIS DELAY. LEARNED COUNSEL ALSO POINTS OUT THAT IN IDENTICAL SET OF CIRCUMSTANCES AND IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 08 AN SMC BENCH OF THIS TRIBUNAL VIDE ORDER DATED 18 TH JUNE 2012 HAS CONDONED THE DELAY. WE HAVE ALSO HEARD L EARNED DEPARTMENTAL REPRESENTATIVE ON THE CONDONATION PETITION . R ESPECTFULLY FOLLOWING THE VIEWS OF THE SMC BENCH IN ASSESSEES OWN CASE WITH WHICH WE ARE IN CONSIDERED AGREEMENT WE CONDONE THE DELAY AND PROCEED TO TAKE UP THE MATTER ON MERITS. I.T.A. NO.: 477 478 AND 479/KOL /2012 ASSESSMENT YEAR: 2005 - 06 2006 - 07 2008 - 09 PAGE 2 OF 5 3. THE CO MMON ISSUE IN ALL THE THREE APPEALS WHICH REQUIRES OUR ADJUD ICATION IS WHETHER A DEMAND UNDER SECTION 201(1A) R.W.S. 194 C CAN BE ENFORCED EVEN IN A SITUATION IN WHICH THE RECIPIENT OF INCOME EMBEDDED IN THE PAYMENTS HAS PAID DUE TAXES THEREON AND IF N OT WHO HAS THE ONUS TO DEMONSTRATE THAT STATUS ABOUT PAYMENT OF SUCH TAXES. 4. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US IS A CHARITABLE TRUST SET UP IN THE YEAR 1939 DOING SIGNIFICANT PUBLIC SERVICE. DURING THE RELEVANT PERIOD THE ASSESSEE HAS MADE SEVERAL PAYMENTS IN RESPECT OF BOOK BINDING CHARGES PRINTING CHARGES ADVERTISEMENT AND PUBLICITY AND BUS HIRE CHARGES ETC BUT HAD NOT DEDUCTED TAX AT SOURCE FROM THESE PAYMENTS. ON THESE FACTS THE AS SESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSESSEE NOT BE TREATED AS ASSESSEE IN DEFAULT IN RESPECT OF SUCH NON DEDUCTION OF TAX AT SOURCE AND THE SAME NOT BE RECOVERED FROM THE ASSESSEE UNDER SECTION 201(1) ALONG WITH INTEREST UND ER SECTION 201(1A). THE STAND OF THE ASSESSEE IS THAT THE RECIPIENTS HAVE PAID TAX ON INCOME EMBEDDED IN THESE PAYMENTS AND IN THE LIGHT OF HONBLE SUPREME COURTS DECISION IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES PVT LTD VS CIT (293 ITR 226) THE TA XES CANNOT ONCE AGAIN BE RECOVERED FROM THE ASSESSEE. THIS CONTENTION IS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE IS NOT ABLE TO PROVE THAT TAXES ON INCOME EMBEDDED IN THESE PAYMENTS HAVE BEEN DULY BEEN PAID BY THE RECIPIENTS. THE ASSESSEES REQUEST TO THE ASSESSING OFFICER TO USE HIS STATUTORY POWERS TO CORROBORATE FROM THE PAYERS WHETHER THEY HAVE PAID TAX ON THEIR ACCOUNT WAS ALSO REJECTED. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. I.T.A. NO.: 477 478 AND 479/KOL /2012 ASSESSMENT YEAR: 2005 - 06 2006 - 07 2008 - 09 PAGE 3 OF 5 6. LEARNED COUNSELS VEHEMENT RELIANCE IS ON HONBLE ALLAHABAD HIGH COURTS JUDGMENT IN THE CASE OF JAGRAN PRAKASHAN LTD VS DCIT [ (2012) 21 TAXMANN.COM 489 ALL] WHEREIN TH EIR LORDSHIPS HAVE INTER ALIA OBSERVED AS FOLLOWS: ..IT IS CLEAR THAT DEDUCTOR CANNOT BE TREATED AN ASSESSEE IN DEFAULT TILL IT IS FOUND THAT ASSESSEE HAS ALSO FAILED TO PAY SUCH TAX DIRECTLY. IN THE PRESENT CASE THE INCOME TAX AUTHORITIES HAD NOT ADVERTED TO THE EXPLANATION TO SECTION 191 NOR HAD APPLIED THEIR MIND AS TO WHETHER THE ASSESSEE HAS ALSO FAILED TO PAY SUCH TAX DI RECTLY. THUS TO DECLARE A DEDUCTOR WHO FAILED TO DEDUCT THE TAX AT SOURCE AS AN ASSESSEE IN DEFAULT CONDITION PRECEDENT IS THAT ASSESSEE HAS ALSO FAILED TO PAY TAX DIRECTLY. THE FACT THAT ASSESSEE HAS FAILED TO PAY TAX DIRECTLY IS THUS FOUNDATIONAL AND JURISDICTIONAL FACT AND ONLY AFTER FINDING THAT ASSESSEE HAS FAILED TO PAY TAX DIRECTLY DEDUCTOR CAN BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX.. 7. IT IS THUS ARGUED THAT THE ONUS IS ON THE REVENUE TO DEMONSTRATE THAT THE TAXES HAVE NOT BEEN RECOVERED FROM THE PERSON WHO HAD THE PRIMARILY LIABILITY TO PAY TAX AND IT IS ONLY WHEN THE PRIMARY LIABILITY IS NOT DISCHARGED THAT VICARIOUS RECOVERY LIABILITY CAN BE INVOKED. LEARNED COUNSEL CONTENDS THAT ONCE ALL THE DETAILS OF THE PERSONS TO WHOM PAYMENTS HAVE BEEN MADE IT IS FOR THE ASSESSING OFFICER WHO HAS ALL THE POWERS TO REQUISITION THE INFORMATION FROM SUCH PAYERS AND FROM THE INCOME TAX AUTHORITIES TO ASCERTAIN WHETHER OR NOT TAXES HAVE BEEN PAID BY THE PERSONS IN RECEIPT OF THE AMOUNTS FROM WHICH TAXES HAVE NOT BEEN WITHHELD. IT IS LEARNED COUNSELS SUBMISSION THAT AS A RESULT OF HONBLE ALLAHABAD HIGH COURTS JUDGMENT IN THE CASE OF JAGARAN PRAKASHAN (SUPRA) THIS PARADIGM SHIFT IN THE INTERPRETATION OF SECTION 201(1) HAS BEEN B ROUGHT ABOUT. 8. THE PLEA IS INDEED WELL TAKEN. LEARNED COUNSEL IS QUITE RIGHT IN HIS SUBMISSION THAT AS A RESULT OF THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN JAGRAN PRAKASHANS CASE (SUPRA) AND IN THE ABSENCE OF ANYTHING CONTRARY THERETO FROM HON BLE JURISDICTIONAL HIGH COURT THERE IS A PARADIGM SHIFT IN THE MANNER IN WHICH RECOVERY PROVISIONS UNDER SECTION 201(1) CAN BE INVOKED. AS OBSERVED BY THEIR LORDSHIPS THE PROVISIONS OF SECTION 201(1) CANNOT BE INVOKED AND THE TAX DEDUCTOR CANNOT BE TREATED AN ASSESSEE IN DEFAULT TILL IT IS FOUND THAT ASSESSEE HAS ALSO I.T.A. NO.: 477 478 AND 479/KOL /2012 ASSESSMENT YEAR: 2005 - 06 2006 - 07 2008 - 09 PAGE 4 OF 5 FAILED TO PAY SUCH TAX DIRECTLY. ONCE THIS FINDING ABOUT THE NON PAYMENT OF TAXES BY THE RECIPIENT IS HELD TO A CONDITION PRECEDENT TO INVOKING SECTION 201(1) THE ONUS IS O N THE ASSESSING OFFICER TO DEMONSTRATE THAT THE CONDITION IS SATISFIED. NO DOUBT THE ASSESSEE HAS TO SUBMIT ALL SUCH INFORMATION ABOUT THE RECIPIENT AS HE IS OBLIGED TO MAINTAIN UNDER THE LAW ONCE THIS INFORMATION IS SUBMITTED IT IS FOR THE ASSESSING OF FICER TO ASCERTAIN WHETHER OR NOT THE TAXES HAVE BEEN PAID BY THE REC IPIENT OF INCOME. THIS APPROACH IN OUR HUMBLE UNDERSTANDING IS IN CONSONANCE WITH THE LAW LAID DOWN BY HONBLE ALLAHABAD HIGH COURT. 9. IT IS IMPORTANT TO BEAR IN MIND THAT THE LAPSE ON ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE IS TO BE VISITED WITH THREE DIFFERENT CONSEQUENCES PENAL PROVISIONS INTEREST PROVISIONS AND RECOVERY PROVISIONS. THE PENAL PROVISIONS IN RESPECT OF SUCH A LAPSE ARE SET OUT IN SECTION 271 C. SO FAR AS PENA L PROVISIONS ARE CONCERNED THE PENALTY IS FOR LAPSE ON THE PART OF THE ASSESSEE AND IT HAS NOTHING TO DO WITH WHETHER OR NOT THE TAXES WERE ULTIMATELY RECOVERED THROUGH OTHER MEANS. THE PROVISIONS REGARDING INTEREST IN DELAY IN DEPOSITING THE TAXES ARE SE T OUT IN SECTION 201(1A). THESE PROVISIONS PROVIDE THAT FOR ANY DELAY IN RECOVERY OF SUCH TAXES IS TO BE COMPENSATED BY THE LEVY OF INTEREST. AS FAR AS RECOVERY PROVISIONS ARE CONCERNED THESE PROVISIONS ARE SET OUT IN SECTION 201(1) WHICH SEEKS TO MAKE GO OD ANY LOSS TO REVENUE ON ACCOUNT OF LAPSE BY THE ASSESSEE TAX DEDUCTOR. HOWEVER T HE QUESTION OF MAKING GOOD THE LOSS OF REVENUE ARISES ONLY WHEN THERE IS INDEED A LOSS OF REVENUE AND THE LOSS OF REVENUE CAN BE THERE ONLY WHEN RECIPIENT OF INCOME HAS NOT PAID TAX. THEREFORE RECOVERY PROVISIONS UNDER SECTION 201(1) CAN BE INVOKED ONLY WHEN LOSS TO REVEN UE IS ESTABLISHED AND THAT CAN ONLY BE ESTABLISHED WHEN IT IS DEMONSTRATED THAT THE RECIPIENT OF INCOME HAS NOT PAID DUE TAXES THEREON. IN THE ABSENCE OF THE STATUTORY POWERS TO REQUISITION ANY INFORMATION FROM THE RECIPIENT OF INCOME THE ASSESSEE IS INDEED NOT ALWAYS ABLE TO OBTAIN THE SAME. THE PROVISIONS TO MAKE GOOD THE SHORTFALL IN COLLECTION OF TAXES MAY THUS END UP BEING INVOKED EVEN WHEN THERE IS N O SHORTFALL IN FACT. ON THE OTHER HAND ONCE I.T.A. NO.: 477 478 AND 479/KOL /2012 ASSESSMENT YEAR: 2005 - 06 2006 - 07 2008 - 09 PAGE 5 OF 5 ASSESSEE FURNISHES THE REQUISITE BASIC INFORMATION THE ASSESSING OFFICER CAN VERY WELL ASCERTAIN THE RELATED FACTS ABOUT PAYMENT OF TAXES ON INCOME OF THE RECIPIENT DIRECTLY FROM THE RECIPIENTS OF INCOME. IT I S NOT THE REVENUES CASE BEFORE US THAT O N THE FACTS OF THIS CASE SUCH AN EXERCISE BY THE ASS ESSING OF FICER IS NOT POSSIBLE. IT DOES PUT AN ADDITIONAL BURDEN ON THE ASSESSING OFFICER BEFORE HE CAN INVOKE SECTION 201(1) BUT THATS HOW HONBLE HIGH COURT HAS VISUALIZED THE SCHEME OF ACT AND THATS HOW THEREFORE IT MEETS THE END OF JUSTICE. 10. THE MATTER THUS STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW AND IN THE LIGHT OF OUR OBSERVATIONS ABOVE. WHILE DOING SO THE ASSESSING OFFICER WILL GIVE A DUE AND FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE AND DISPOSE OF THE MATTER BY WAY OF A SPEAKING ORDER. WE DIRECT SO. 11. IN THE RESULT THE APPEALS ARE ALLOWED FOR STATISTICAL PURPO SES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COUR T TODAY ON 31ST DAY OF JULY 2012. SD/XX SD/XX MAHAVIR SINGH PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA THE 31 ST DAY OF JULY 2012 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL LAHA SR PS KOLKATA BENCHES KOLKATA