M/s Punjab National Bank,, Gurgaon v. ACIT, TDS, Gurgaon

ITA 5503/DEL/2013 | 2009-2010
Pronouncement Date: 09-04-2014 | Result: Allowed

Appeal Details

RSA Number 550320114 RSA 2013
Assessee PAN AAACP0165G
Bench Delhi
Appeal Number ITA 5503/DEL/2013
Duration Of Justice 6 month(s)
Appellant M/s Punjab National Bank,, Gurgaon
Respondent ACIT, TDS, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 09-04-2014
Date Of Final Hearing 07-04-2014
Next Hearing Date 07-04-2014
Assessment Year 2009-2010
Appeal Filed On 09-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SH. R. S. SYAL AM AND SH. A. T. VARKEY JM ITA NO. 5503/DEL/2013 : ASS TT. YEAR : 2009-10 PUNJAB NATIONAL BANK RAMLILA GROUND GURGAON-122001 VS ASSISTANT COMMISSIONER OF INCOME TAX (TDS) GURGAON (APPELLANT) (RESPONDENT) PAN NO. AAACP0165G ASSESSEE BY : SHRI PANKAJ MANOCHA REVENUE BY : MS ME ENAKSHI VOHRA DATE OF HEARING : 7.4.2014 DATE OF PRONOUNCEMENT : 9.4.2014 ORDER PER R. S. SYAL AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY CIT(A) ON 14.8.2013 DISMISSING THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER U/S 201(1) AND 201(1A) OF THE INCOME TAX ACT 1961 (THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2009-10. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE BANK FILED ITS E-TDS STATEMENT. ON THE PERUSAL OF THE SAME IT WAS OBSERVED THAT THERE WAS NON-PAYMENT OF TDS NON/LOW DEDUCTION OF TAX AT SOURCE AND LATE PAYMENT OF TAX DEDUCTED AT SOURCE IN CERTAIN C ASES. ON THE BASIS OF A CHART CONSISTING OF 39 ENTRIES WHICH IS ANNEXURE TO THE ORDER PASSED BY THE ACIT(TDS) IT WAS CONCLUDED THAT THERE WAS TOTA L SHORT DEDUCTION OF ITA NO. 5503/DEL/2013 PUN JAB NATIONAL BANK 2 TAX AT SOURCE ON INTEREST AMOUNTING TO RS. 5 71 910 /-. THE ASSESSEE WAS HELD TO BE IN DEFAULT IN RESPECT OF THIS AMOUNT U/S 201(1) AND ALSO INTEREST U/S 201(1A) AMOUNTING TO RS. 1 37 300/- THEREBY DETERMINING THE TOTAL LIABILITY AT RS. 7 09 210/-. THE ASSESSEE ARGUED BE FORE THE LD. FIRST APPELLATE AUTHORITY THAT THE DEDUCTEES HAD SHOWN SU CH INTEREST AS INCOME IN THEIR RESPECTIVE RETURNS AND ALSO PAID TAX THERE ON. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. VS CIT 2007 243 ITR 226 (SC) TO CONTEND THAT THE ASSESSEE COULD NOT BE TREATED A S IN DEFAULT. THE LD. CIT(A) NOTICED THAT SINCE NO EVIDENCE WAS PLACED BY THE ASSESSEE ON RECORD ABOUT THE PAYMENT OF TAX ON INTEREST INCOME BY THE PAYEES THE JUDGMENT OF THE HONBLE SUPREME COURT IN HINDUSTAN COCA COLA BEVERAGES (P) LTD. (SUPRA) COULD NOT BE INVOKED. IN THE PENULTIMATE PARA OF THE IMPUGNED ORDER THE LD. CIT(A) OBSERVED THAT: IN VIEW OF THESE FACTS THE APPELLANT IS DIRECTED TO CO-ORDINA TE WITH THE TDS OFFICER TO DO NECESSARY VERIFICATION AND ALLOW APPELLANTS CONTENTION ON THIS ISSUE AS PER LAW. HOWEVER IN THE FINAL PARA TH E LD. CIT(A) RECORDED: IN THE RESULT THE APPEAL IS DISMISSED. THE ASSE SSEE IS AGGRIEVED AGAINST THE FINAL FINDING GIVEN BY THE LD. CIT(A) IN DISMIS SING THE APPEAL. IT WAS STATED ON BEHALF OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS REFUSED TO PASS ANY ORDER IN VIEW OF THE FACT THAT THE CIT(A) HAS NO POWER TO SEND THE MATTER BACK TO THE A.O. ITA NO. 5503/DEL/2013 PUN JAB NATIONAL BANK 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE HONBLE SUPREME COURT IN HINDUSTAN COCA COLA BEVERAGES (P) LTD. (SUPRA) HAS HELD THAT WHERE THE PAYEE HAS ALREADY PAID TAX ON INCOME OF WHICH THERE WAS A SHORT DEDUC TION OF TAX AT SOURCE RECOVERY OF TAX CANNOT BE MADE ONCE AGAIN FROM THE TAX DEDUCTOR. THE LD. AR CONTENDED THAT 39 INSTANCES IN RESPECT OF WH ICH THE ASSESSEE SHORT DEDUCTED TAX AT SOURCE THE PAYEES HAD ALREADY INCL UDED SUCH INTEREST IN THEIR RESPECTIVE TOTAL INCOMES AND PAID TAX THEREON . IT APPEARS THAT IMPRESSED WITH THIS SUBMISSION THE LD. CIT(A) DIRE CTED THE ASSESSEE TO CO-ORDINATE WITH THE TDS OFFICER FOR NECESSARY VERI FICATION IN THIS REGARD. HOWEVER THE FACT OF THE MATTER IS THAT THE LD. CIT(A) HAS NO POWER TO REMAND THE PROCEEDINGS BEFORE THE A.O. IN VIEW OF THE FOREGOING PRECEDENT FROM THE HONBLE SUPREME COURT IT IS CLEAR THAT IF THE PAYEES HAVE INCLUDED SUCH INTEREST INCOME EARNE D FROM THE ASSESSEE- BANK IN THEIR TOTAL INCOME AND PAID TAX THEREON TH E ASSESSEE CANNOT BE CONSIDERED AS IN DEFAULT IN TERMS OF SECTION 201(1) . 4. IT IS FURTHER RELEVANT TO NOTE THAT EXPLAN ATION TO SEC. 191 NOW MAKES IT UNEQUIVOCAL THAT WHERE THE PERSON WHO IS R EQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THIS A CT DOES NOT DEDUCT OR AFTER SO DEDUCTING FAILS TO PAY OR DOES NOT PAY TH E WHOLE OR ANY PART OF THE TAX AS REQUIRED BY OR UNDER THIS ACT HE MAY BE DEEMED TO BE AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SEC. 201( 1) IN RESPECT OF SUCH ITA NO. 5503/DEL/2013 PUN JAB NATIONAL BANK 4 TAX IF THE DEDUCTEE HAS ALSO FAILED TO SUCH TAX D IRECTLY. THUS IT IS OBVIOUS THAT THE PERSON RESPONSIBLE FOR DEDUCTION O F TAX AT SOURCE ON AN INCOME PAID CAN BE CONSIDERED AS IN DEFAULT ONLY WH ERE THE PAYEE HAS NOT PAID ANY TAX ON SUCH INCOME. TO PUT IT SIMPLY IF THE PAYEE HAS PAID TAX ON SUCH INCOME THEN THE PAYER CANNOT BE CONSID ERED AS THE ASSESSEE IN DEFAULT. THE INSERTION OF THIS EXPLANATION BY TH E FINANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 1.6.2003 IS THE REIT ERATION OF THE MANDATE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD. (SUPRA). IN THE LIGHT OF THE ABOVE DISCUSSION WE SET ASIDE THE IMPUGNED ORDER AND SEND THE MATTER BACK TO THE A.O FOR NECESSARY VERIFICATION. THE ASSESSEE IS DIRECTED TO PRODUCE THE RELEVANT EVIDENCE IN SUPPORT OF ITS CONTENTION THAT ALL THE PAYEES INCLUDED SUCH INTEREST INCOME IN THEIR TOTAL INCOME AND PAID TAX THEREON. 5. IN SO FAR AS THE QUESTION OF INTEREST U/S 201(1A ) IS CONCERNED THE SAME IS CHARGEABLE FOR THE PERIOD BETWEEN THE DATE ON WHICH TAX WAS DEDUCTIBLE TILL THE DATE ON WHICH THE TAX WAS ACTUA LLY PAID BY THE PAYEE NOTWITHSTANDING THE FACT THAT THE PAYEE CEASES TO B E AN ASSESSEE IN DEFAULT FOR THE PURPOSE OF SEC. 201(1). THE HONBLE SUPREME COURT IN CIT VS ELI LILLY AND COMPANY (INDIA) (P) LTD. AND O THERS 2009 312 ITR 225 (SC) HAS LAID DOWN TO THIS EXTENT. THE MATTER OF CHAR GING INTEREST WHEREVER CHARGEABLE IS ALSO REMITTED TO THE ASSES SING OFFICER FOR FRESH DETERMINATION IN LINE WITH HIS VERIFICATION OF THE LIABILITY OF THE ASSESSEE U/S 201(1). ITA NO. 5503/DEL/2013 PUN JAB NATIONAL BANK 5 6. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9/4/2014. SD/- SD/- (A. T. VARKEY) (R. S . SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 9/4/2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 7.4.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 7.4.2014 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 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *