M/s Visakhapatnam Port Trust, Visakhapatnam v. The ITO, Range-2(1) (TDS), Visakhapatnam

ITA 613/VIZ/2004 | misc
Pronouncement Date: 12-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 61325314 RSA 2004
Assessee PAN VIZAG2004V
Bench Visakhapatnam
Appeal Number ITA 613/VIZ/2004
Duration Of Justice 5 year(s) 9 month(s) 24 day(s)
Appellant M/s Visakhapatnam Port Trust, Visakhapatnam
Respondent The ITO, Range-2(1) (TDS), Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 12-08-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 12-08-2010
Assessment Year misc
Appeal Filed On 19-10-2004
Judgment Text
ITA NOS 611 TO 613/VIZAG 2004 VISAKHAPATNAM PORT TRU ST VISAKHAPATNAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS. 611 TO 613/VIZAG/2004 ASSESSMENT YEARS: 2001-02 TO 2003-04 (FINANCIAL YEARS: 2000-01 TO 2002-03) VISAKHAPATNAM PORT TRUST VISAKHAPATNAM VS. ITO RANGE-2(1) (TDS) VISAKHAPATNAM (APPELLANT) PAN NO: AAALV 0035 C (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI CA RESPONDENT BY: SHRI SUBRATA SARKAR CIT(DR) ORDER PER BENCH: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST THE ORDERS PASSED BY LEARNED CIT(A) VISAKHAPATNAM CONFIRMING THE TAX AND INTEREST LEVIED U/S 201 (1) AND 201 (1A) RESPECTIVELY BY TRE ATING THE ASSESSEE AS AN ASSESSEE IN DEFAULT. THESE APPEALS RELATE TO THE FI NANCIAL YEAR 2000-01 TO 2002-03 RELEVANT TO THE ASSESSMENT YEARS 2001-02 TO 2003-04. SINCE THE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATU RE THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HEREIN IS A LOCAL AUTHORITY. IT HAD TAKEN A LOAN FROM M/S DOCK LABOUR BOARD (HEREINAFTER M/S DLB) WHICH IS ASSESSED TAX UNDER THE STATUS OF ASSOCIATION OF PERSONS. THE ASSESSEE HAD PAID FOLLOWING AMOUNTS AS INTEREST ON THE SAID LOAN DURING THE FINANCIAL Y EARS AS PER THE DETAILS GIVEN BELOW: FINANCIAL YEAR INTEREST 2000-01 RS. 1 94 94 245 2001-02 RS.10 16 14 137 2002-03 RS. 3 38 35 007 ITA NOS 611 TO 613/VIZAG 2004 VISAKHAPATNAM PORT TRU ST VISAKHAPATNAM PAGE 2 OF 4 HOWEVER THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE O N THE SAID PAYMENTS AS REQUIRED U/S 194A OF THE ACT. FOR RECEIVING INTERE ST WITHOUT DEDUCTION OF TAX AT SOURCE M/S DLB AND THE ASSESSEE HEREIN HAVE TO COMPLY WITH THE PROCEDURES PRESCRIBED U/S 197 AND 197A OF THE ACT. THOUGH THE ASSESSEE CLAIMED TO HAVE RECEIVED A DECLARATION IN FORM NO.1 5H FROM M/S DLB FOR THE FINANCIAL YEARS 2000-01 AND 2001-02 THE ASSESS ING OFFICER NOTICED MANY DEFECTS IN IT AND ALSO LAPSES ON THE PART OF T HE ASSESSEE HEREIN. ACCORDINGLY THE AO CONCLUDED THAT THE SAID FORM NO .15H FILED BY M/S DLB CANNOT BE TAKEN COGNIZANCE OF. FOR THE FINANCIAL YE AR 2002-03 M/S DOCK LABOUR BOARD WAS NOT ENTITLED TO FURNISH FORM NO.15 H. M/S DLB ALSO DID NOT SUBMIT ANY CERTIFICATE OBTAINED FROM THE ASSESS ING OFFICER FOR NON DEDUCTION OF TAX AT SOURCE AS PROVIDED U/S 197 OF T HE ACT. IN THESE CIRCUMSTANCES THE ASSESSING OFFICER TREATED THE AS SESSEE HEREIN AS AN ASSESSEE IN DEFAULT FOR THESE THREE YEARS AND ACCOR DINGLY LEVIED TAX AND INTEREST U/S 201 (1) AND 201(1A) OF THE ACT RESPECT IVELY. THE SAID ORDER OF THE ASSESSING OFFICER WAS CONFIRMED BY THE LEARN ED CIT (A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PER USED THE RECORD. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THA T THE RECIPIENT OF INTEREST M/S DLB HAD FILED ITS RETURN OF INCOME FOR ALL THE THREE YEARS UNDER CONSIDERATION BY CLAIMING EXEMPTION U/S 11 OF THE I NCOME TAX ACT AND SINCE M/S DLB IS NOT LIABLE TO PAY TAX THE DEDUCTI ON OF TAX AT SOURCE AND CLAIMING OF REFUND THEREAFTER WILL AMOUNT TO MERE C OMPLIANCE OF TECHNICAL FORMALITIES PRESCRIBED UNDER THE ACT. ACCORDINGLY T HE LEARNED AUTHORISED REPRESENTATIVE CONTENDED THAT THE ASSESSEE HEREIN M AY NOT BE TREATED AS AN ASSESSEE IN DEFAULT. ALTERNATIVELY THE LEARNED AUTHORISED REPRESENTATIVE PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPR EME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LTD. VS. CIT (200 7) 293 ITR 226 TO CONTEND THAT THE ASSESSEE HEREIN COULD NOT BE TREAT ED AS AN ASSESSEE IN DEFAULT AS THE PAYEE IS DEEMED TO HAVE BEEN PAID TH E TAX ON THE IMPUGNED INCOME ON FILING OF ITS RETURN OF INCOME. ITA NOS 611 TO 613/VIZAG 2004 VISAKHAPATNAM PORT TRU ST VISAKHAPATNAM PAGE 3 OF 4 4. THE REQUIREMENT OF DEDUCTION OF TAX AT SOURCE ON THE INTEREST PAYMENT IS PRESCRIBED U/S 194A OF THE ACT. IN ORDER TO RECEIVE THE INTEREST INCOME WITHOUT DEDUCTION OF TAX AT SOURCE CERTAIN RECIPIENTS HAVE TO COMPLY WITH THE PROCEDURES PRESCRIBED U/S 197 OR 19 7A OF THE ACT. THOUGH THE RECIPIENT OF INTEREST M/S DLB HAS FILED FORM NO .15H AS PRESCRIBED U/S 197A OF THE ACT YET THE ASSESSING OFFICER HAS POIN TED OUT MANY MISTAKES AND LAPSES WITH REGARD TO THE COMPLIANCE OF PROCEDU RES PRESCRIBED U/S 197A OF THE ACT READ WITH RULES THEREON. HENCE EFFECTI VELY THE RECIPIENT OF INTEREST DID NOT COMPLY WITH THE PROCEDURES PRESCRI BED U/S 197 AND 197A OF THE ACT COMPELLING THE ASSESSEE HEREIN TO DEDUCT TA X AT SOURCE ON THE INTEREST PAID BY IT DURING THE FINANCIAL YEARS UNDE R CONSIDERATION. HOWEVER IT IS AN ADMITTED FACT THAT THE ASSESSEE HEREIN DID NOT DEDUCT TAX AT SOURCE ON THE IMPUGNED INTEREST PAYMENTS. 5. IT WAS BROUGHT TO OUR NOTICE THAT THE RECIPIENT M/S DLB HAS FILED ITS RETURN OF INCOME FOR ALL THE 3 YEARS UNDER CONSIDER ATION CLAIMING EXEMPTION U/S 11 OF THE ACT. THE COPIES OF RETURNS OF INCOME FOR ALL THE THREE YEARS HAVE BEEN INCLUDED IN THE PAPER BOOK FILED BY THE A SSESSEE. HENCE AS CONTENDED BY THE LEARNED AUTHORISED REPRESENTATIVE THE TAX ON THE IMPUGNED INTEREST INCOME SHALL BE DEEMED TO HAVE BE EN PAID ON THE DATE OF FILING OF RESPECTIVE RETURN OF INCOME. IN THAT CA SE AS DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P) LTD (SUPRA) THE ASSESSEE HEREIN CANNOT BE TREATED AS ASSESSEE IN DEFAULT. IT MAY BE NOTICED THAT WHILE ARRIVING AT THE SAID DE CISION THE HON'BLE SUPREME COURT PLACED MUCH RELIANCE ON THE CIRCULAR ISSUED BY THE CBDT. THE RELEVANT OBSERVATIONS OF HON'BLE SUPREME COURT ARE EXTRACTED BELOW: 10. BE THAT AS IT MAY THE CIRCULAR NO.275/201/95- IT(B) DT. 29 TH JAN. 1997 ISSUED BY THE CBDT IN OUR CONSIDERED OP INION SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES NO DEMAND VISUALIZED UNDER S. 201(1) OF THE IT ACT SHOULD BE ENFORCED AFTER THE TAX DEDUCTOR HAS SATISFIED TH E OFFICER-IN- CHARGE OF TDS THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER THIS WILL NOT ALTER THE LIABILITY TO CHARGE INTEREST UNDER S. 201(1A) OF THE ACT TILL TH E DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE OR THE LI ABILITY FOR PENALTY UNDER S.271C OF THE IT ACT. ITA NOS 611 TO 613/VIZAG 2004 VISAKHAPATNAM PORT TRU ST VISAKHAPATNAM PAGE 4 OF 4 6. WITH REGARD TO THE LEVY OF INTEREST U/S 201 (1A) OF THE ACT THE LEARNED AUTHORISED REPRESENTATIVE CONTENDED THAT TH E INTEREST IS NOT LEVIABLE AS THE ACTUAL DATE OF PAYMENT OF TAX IS NO T ASCERTAINABLE. WE ARE UNABLE TO AGREE WITH THE SAID CONTENTION. WE ARE OF THE VIEW THAT THE ASSESSEE WOULD BE LIABLE TO PAY INTEREST UP TO THE DATE OF FILING OF RESPECTIVE RETURN OF INCOME AS THE TAX ON THE IMPUGNED INCOME IS DEEMED TO HAVE BEEN PAID BY THE RECIPIENT ON THE DATE OF FILING OF RESPECTIVE RETURN OF INCOME. HENCE THE ASSESSEE HERE IN IS LIABLE TO PAY TAX UP TO THE DATE OF FILING OF RESPECTIVE RETURN OF INCOME BY M/S DLB AN D WE ORDER ACCORDINGLY. 7. IN THE RESULT ALL THE APPEALS FILED BY THE ASSES SEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 12-08-2010 COPY TO 1 M/S VISAKHAPATNAM PORT TRUST PORT AREA VISAKHAP ATNAM 530 035 2 THE INCOME TAX OFFICER RANGE-2(TDS) VISAKHAPATNA M 3 4. THE CIT 2 VISAKHAPATNAM THE CIT(A)-II VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM