M/s Jeevan Telecasting Corpn Ltd, Cochin v. ACIT, Cochin

ITA 611/COCH/2010 | 2004-2005
Pronouncement Date: 10-02-2010

Appeal Details

RSA Number 61121914 RSA 2010
Bench Cochin
Appeal Number ITA 611/COCH/2010
Appellant M/s Jeevan Telecasting Corpn Ltd, Cochin
Respondent ACIT, Cochin
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2010
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 10-02-2010
Assessment Year 2004-2005
Appeal Filed On 18-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NOS.606 TO 615/COCH/2010 ASST. YEARS:2004-05 TO 2008-09 JEEVEN TELECASTING CORPN. LTD. 32/24901- B RASHTHRA DEEPIKA BLDG. PALARIVATTOM. PA NO.CHNJO 0431E VS. THE ASST. COMMISSIONER OF INCOME-TAX (TDS) KOCHI. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI K.I. JOHN C.A. RESPONDENT BY SHRI T.J.VINCENT JR.D.R. O R D E R PER N.VIJAYAKUMARAN J.M: ITA NOS.606 607 608 609 610/COCH/2010 RELATE TO LEVY OF TAX U/S.201(1) AND LEVY OF INTEREST U/S.201 (1A) OF I.T.ACT 1961. ITA NOS. 611 TO 615/COCH/2010 RELATE TO 271C PENALTY FOR NON COMPLIANCE OF TDS PROVISIONS. 2. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A ND LD. D.R. 3. THE FACTS RELEVANT ARE THAT THE ASSESSEE JEEVAN /TELECASTING CORPORATION LTD. PALARIVATTOM CAUSED BY A ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 2 SHOW CAUSE NOTICE WHY TAX U/S.201(1) AND CONSEQUENT IAL INTEREST THERETO U/S.201(1A) SHOULD NOT BE LEVIED. FOR THE PURPOSE OF DISCUSSION WE ARE TAKING ASSESSMENT YEA R 2004- 05 AS THE FOLLOWING ASSESSMENT YEARS 2005-06 2006- 07 2007-08 AND 2008-09 ARE ON IDENTICAL ISSUE. SO AL SO LEVY OF PENALTY U/S.271C FOR THE SAME ASSESSMENT YEARS WHI CH WE SHALL DEAL SUBSEQUENTLY TAKING ASSESSMENT YEAR 2004 -05 AS THE BASE YEAR. AS PER TABULAR SUMMARY TAX LEVY IS FOR UPLINK CHARGES AND BACK HAUL CHARGES ACCORDING TO THE DEPA RTMENT COMES U/S.194J AS TECHNICAL SERVICE. THE ASSESSEE IS CONTESTING THAT THERE IS NO BASIS FOR THIS AND AS P ER TABULAR SUMMARY INTEREST IS FOR THE ABOVE CHARGES AS TDS AR REARS RELATING TO THE FIVE HEADS AS PER ANNEXURE-I TO THE COMMON ORDER AND ANNEXURE-II RELATES TO LEVY OF TAX AND IN TEREST FOR NON DEDUCTION OF TDS. IT WAS FURTHER EXPLAINED TH AT IT IS NOT THE CASE OF THE DEPARTMENT THAT PAYEES ARE NOT INCOME- TAX ASSESSES. THE ASSESSEES CONTENTION IS THAT T HEREFORE THERE CANNOT BE LEVY BOTH FROM THE ASSESSEE AND THE PAYEE. THE LEVY IS WITHOUT AUTHORITY OF LAW AND LACING IN DETAILS IS THE ALTERNATE CONTENTION. 4. DURING THE COURSE OF SURVEY U/S.133A DEFAULTS IN TAX DEDUCTION AT SOURCE WERE DETECTED IN THE CASE OF TH E ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 3 ASSESSEE. HENCE NOTICE U/S.201(1) AND 201(1A) WER E ISSUED ON THE ASSESSEE FOR THE ASSESSMENT YEAR 2004 -05 ON 10-03-2008. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE IS INVOLVED IN THE BUSINESS OF PRODUCING A ND TELECASTING TELEVISION PROGRAMMES THROUGH ITS OWN T V CHANNEL JEEVAN TV. IN THE COURSE OF ITS BUSINESS O PERATIONS THE ASSESSEE IS MAKING VARIOUS PAYMENTS WHICH ARE L IABLE FOR TAX DEDUCTION AT SOURCE. ACCORDING TO THE ASSESSIN G OFFICER THIS INCLUDES CONTRACTS COMMISSION PROFESSIONAL A ND CONSULTANCY CHARGES RENT AND SALARIES. FURTHER THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS AL SO PAID RENT FOR UNIQUE STUDIO EQUIPMENT HIRE CHARGE ETC. WITHOUT DEDUCTING TAX WHICH IS TO BE DEDUCTED U/S.194J. T HE ASSESSING OFFICER FOUND THAT WHILE PAYING BACKHAUL CHARGES TO VARIOUS PARTIES SUCH AS ASIANET COMMUNICATIONS ESSEL SHYAM COMMUNICATIONS LTD. AND PRERNA CONSULTANTS ASSESSEE HAS NOT DEDUCTED THE TAX. ACCORDING TO T HE ASSESSING OFFICER AS CLARIFIED BY THE TECHNICAL ST AFF OF THE ASSESSEE BACKHAUL LINK USAGE CHARGES ARE SIMILAR I N NATURE TO SATELLITE UPLINK CHARGES. HENCE THE ASSESSING OFFICER WAS OF THE VIEW THAT TAX SHOULD HAVE BEEN DEDUCTION FOR PAYMENT OF SUCH FEES FOR TECHNICAL SERVICE WHICH ATTRACTS THE PROVISIONS OF SECTION 194J. HOWEVER NO TAX HAS B EEN ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 4 DEDUCTED IN ANY OF THE YEARS IN QUESTION ACCORDING TO THE ASSESSING OFFICER. HE LISTED OUT THE TAX DEFAULT AS UNDER: A) TAX DEDUCTED FROM PAYMENT OF CONTRACTS COMMISSION RENT SALARY AND PROFESSIONAL AND CONSULTANCY CHARG ES AND NOT DEPOSITED OR DEPOSITED LATE FOR THE F.YS.20 03- 04 TO 2007-08; B) TAX NOT DEDUCTED U/S.194J FROM PAYMENT OF UPLINK CHARGES FOR F.YS.2003-04 TO 2007-08; C) TAX NOT DEDUCTION U/S.194J FROM PAYMENT OF BACKHAUL LINK USAGE CHARGES TO VARIOUS PARTIES FOR F.YS.2003 -04 TO 2005-06; D) TAX NOT DEDUCTED ON EQUIPMENT HIRE CHARGES PAID TO JEEVAN SATELLITE COMMUNICATIONS FOR F.YS.2003-04 TO 2007-08; E) TAX NOT DEDUCTED ON CAMERA RENTAL PAYMENTS TO UNIQU E STUDIO FOR F.Y.2007-08. THIS RESULTED IN THE LEVY OF TAX U/S.201(1) AND CON SEQUENTIAL INTEREST U/S.201(1A). ON APPEAL THE LD. CIT(APPE ALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. HENC E THE ASSESSEE IS ON SECOND APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. SECTION 201(1) SPELL S OUT THE CONSEQUENCES OF FAILURE TO DEDUCT OR PAY THE TAX. SECTION ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 5 201(1A) ENABLES THE ASSESSING OFFICER TO CHARGE INT EREST AS SIMPLE INTEREST ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS ACTUALLY PAID. THE LD. COUNSEL FOR THE ASSESS EE WHILE ADVANCING HIS ARGUMENTS RELIED ON THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ELI LILLY AND CO.(INDIA) P.LTD. (2009) 312 ITR 225 WHEREIN THE HONBLE SUPREME COURT IN THE LAST PAGE OF ITS ORDER AT PAGE 253 HELD AS UNDER: WE ARE DIRECTING THE ASSESSING OFFICER TO EXAMINE EACH CASE TO ASCERTAIN WHETHER THE EMPLOYEE-ASSESSEE (RECIPIENT) HAS PAID THE TAX DUE ON THE HOME SALARY/SPECIAL ALLOWANCE(S) RECEIVED FROM THE FOREI GN COMPANY. IN CASE TAXES DUE ON HOME SALARY/SPECIAL ALLOWANCE(S) STAND PAID THEN THE ASSESSING OFFICER SHALL NOT PROCEED U/S.201(1). IN CASES WHERE THE TAX HA S NOT BEEN PAID THE ASSESSING OFFICER SHALL PROCEED UNDE R SECTION 201(1) TO RECOVER THE SHORTFALL IN THE PAYM ENT OF TAX. SIMILARLY IN EACH OF THE 104 APPEALS THE ASSESSI NG OFFICER SHALL EXAMINE AND FIND OUT WHETHER INTEREST HAS BEEN PAID/RECOVERED FOR THE PERIOD BETWEEN THE DATE ON WHICH TAX WAS DEDUCTIBLE TILL THE DATE ON WHICH THE TAX WAS ACTUALLY PAID. IF IN ANY CASE INTEREST ACCR UES FOR THE AFORE-STATED PERIOD AND IF IT IS NOT PAID THEN THE ADJUDICATING AUTHORITY SHALL TAKE STEPS TO RECOVER INTEREST FOR THE AFORE-STATED PERIOD UNDER SECTION 201(1A). ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 6 FOR THE REASONS MENTIONED HEREINABOVE HOWEVER NO PENALTY PROCEEDINGS U/S.271C SHALL BE TAKEN IN ANY OF THESE CASES AS THE ISSUE INVOLVED WAS A NASCENT ISS UE. ACCORDINGLY WE QUASH THE PENALTY PROCEEDINGS UNDER SECTION 271C. FURTHER THE LD. COUNSEL FOR THEE ASSESSEE RELIED U PON ONE MORE DECISION OF THE HONBLE SUPREME COURT IN THE C ASE OF CIT VS. BHARTI CELLULAR LTD.(2010) 234 CTR 146 WHICH IS ON THE TDS U/S.194J WHEREIN ALSO THE APEX COURT OBSERV ED AT PARA 10 THAT : ACCORDINGLY WE ARE DIRECTING THE AO(TDS) IN EACH OF THESE CASES TO EXAMINE A TECHNICAL EXPERT FROM THE SIDE OF THE DEPARTMENT AND TO DECIDE THE MATTER WITHIN A PERIOD OF FOUR MONTHS. SUCH EXPERT(S) WILL BE EXAM INED (INCLUDING CROSS-EXAMINED) WITHIN A PERIOD OF FOUR WEEKS FROM THE DATE OF RECEIPT OF THE ORDER OF THIS COURT . LIBERTY IS GIVEN TO RESPONDENT NO.1 TO EXAMINE ITS EXPERT AND TO ADDUCE ANY OTHER EVIDENCE. FURTHER THEIR LORDSHIPS DIRECTED THE CBDT TO IS SUE DIRECTIONS TO ITS OFFICERS AS ENVISAGED IN PARA.11 OF ITS ORDER AT PAGE 150 OF THE SAID DECISION. THE OBSERVATION OF THE HONBLE APEX COURT HAS TO BE FOLLOWED AT THE LEVEL OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS TO VERIFY THE ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 7 SAME WHETHER UNDER THE GIVEN SET OF FACTS AND CIRCU MSTANCES THE ASSESSEE CAN BE TREATED AS ASSESSEE IN DEFAULT. ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDERS OF THE INCOME- TAX AUTHORITIES AND REMIT THE MATTER BACK TO THE FI LE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF ABOVE OBSERVATIONS. WHILE DOING SO THE ASSESSING O FFICER MAY KEEP IN MIND THE DECISION OF THE HONBLE SUPREM E COURT IN THE CASE OF TRANSMISSION CORPORATION OF A.P.LTD. VS. CIT - 239 ITR 587 . IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHOULD BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HE ARD. 6. COMING TO THE PENALTY LEVIED U/S.271C FOR THE VE RY SAME ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2004-0 5 2005-06 2006-07 2007-08 AND 2008-09 AS WE HAVE S ET ASIDE THE ORDERS OF THE AUTHORITIES U/S.201(1) AND 201(1A) THE LEVY OF PENALTY U/S.271C SHOULD ALSO GO BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION AS THIS IS CONSEQUENTIAL AND ONLY TO BE TAKEN AFTER THE DECISI ON IN THE QUANTUM APPEAL U/S.201(1) AND 201(1A) FOR THE RELE VANT ASSESSMENT YEARS. ACCORDINGLY THE IMPUGNED ORDERS OF THE ASSESSING OFFICER AS WELL AS THE LD. CIT(APPEALS) A RE SET ASIDE AND REMITTED BACK TO ASSESSING OFFICER FOR PR OPER ITA NOS. 606 TO 615/COCH/2010 JEEVEN TELECASTING CORPORATION LTD. 8 ADJUDICATION ON MERITS AFTER GIVING REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT ALL THESE 10 APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. (SANJAY ARORA) (N.VIJAYKUMA RAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM DATED THE FEBRUARY 2011. PM. COPY FORWARDED TO: 1. JEEVEN TELECASTING CORPN. LTD. 32/24901-B RASHTHRA DEEPIKA BLDG. PALARIVATTOM. 2. THE ASST. COMMISSIONER OF INCOME-TAX (TDS) KOCHI. 3. CIT(A)-III KOCHI. 4. CIT KOCHI. 5. D.R.