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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI M. BALAGANESH & SHRI SANDEEP SINGH KARHAIL
PER SANDEEP SINGH KARHAIL, J.M.
The present appeal has been filed by the assessee challenging the impugned order dated 20/09/2022, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2005–06.
In its appeal, the assessee has raised the following grounds:–
“1) In the facts and circumstances of the case and in law, the Learned AO erred in passing order u/s 201(1)/201(1A) in the name of M/s GAD Shipping & Transport Pvt. Ltd. having PAN AABCG2816N instead of M/s GAD Logistics (I)
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
Pvt. Ltd. having PAN AACPK8068J thereby passing an order which is not tenable in law. Without prejudice to the above and alternatively, 2) In the facts and circumstances of the case and in law, the Learned AO erred in passing order u/s 201(1)/201(1A) thereby raising demand of Rs. 20,84,018/- by passing the order beyond the directions of the order of ITAT in which it was specified that, "we restore the matter back to the file of Assessing Officer for limited purpose" and therefore such additions is bad in law. Without prejudice to the above and alternatively, 3) In the facts and circumstances of the case and in law, the Learned AO erred in raising demand of Rs. 20,84,018/- inclusive of interest payable on alleged non deduction of tax by overlooking the fact that the same was already added in the A.Y. 2004-05. 4) In the facts and the circumstances of the case and in law, the learned A.O. erred in wrongly initiating penalty u/s 271C and 272A(2)(c). 5. In the facts and the circumstances of the case and in law, the learned CIT(A) erred in wrongly confirming the same without considering the above facts and that too by passing an ex parte order by overlooking the fact that adjournment letter was already filed online and was appearing on the website. [B] Relief Prayed: The appellant therefore prays Your Honour 1. To quash the order passed in the name and PAN of the Appellant which are wrong. 2. To quash the order passed the directions of the ITAT. 3. To delete the demand of Rs.20,84,018/-. 4. To delete the initiation of penalty u/s 271C and 272A(2)(c). [C] General:- The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. This appeal is filed in time and may please be allowed in full. A Detailed paper book along with case laws will be submitted at the time of hearing.
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
At the outset, during the hearing, the learned Authorised Representative (“learned AR”) wishes not to press ground No. 1 raised in assessee’s appeal. Accordingly ground No. 1 is dismissed as not pressed.
The grievance of the assessee, in the present appeal, is against the demand raised under section 201(1)/201(1A) of the Act twice for the very same default in the year under consideration as well as in the preceding assessment year. The assessee has also challenged the additional demand raised vide order passed under section 201(1)/201(1A) of the Act beyond the directions of the coordinate bench of the Tribunal.
We have considered the rival submissions and perused the material available on record. The brief facts of the case as emanating from the record are that the assessee is a company engaged in the business of handling and transporting containers for MSWC (Maharashtra State Warehousing Corporation), PSWC (Punjab State Warehousing Corporation), and other private contractors. Pursuant to the survey under section 133A of the Act for verification of deduction of TDS, an order under section 201(1)/201(1A) of the Act was passed on 28/03/2011 treating the assessee as an assessee in default and raising a demand of Rs.3,24,179 as under:
Amount Paid TDA Amount Nature of Payment TDS Rate Interest (Rs) (Rs) (Rs) Contractor 29,65,597 2.24% 66,429 47,829 Rent 5,19,639 22.44% 1,16,607 83,957 Professional Fees 1,06,666 5.10 5,440 3,917 Total: 1,88,476 1,35,703
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
The learned CIT(A) dismissed the appeal filed by the assessee. In further appeal, the coordinate bench of the Tribunal vide order dated 12/04/2017 passed in ITA No. 6693/Mum/2014 restored the matter to the file of the Assessing Officer for the limited purpose of verifying whether both the demand relates to the same default and whether the assessee has settled demand for the assessment year 2004-05. The relevant findings of the coordinate bench of the Tribunal, in the aforesaid decision, are as under: –
“4. We have heard the rival contentions and perused relevant material on record. A perusal of orders of Ld. AO for 2004-05 & 2005-06 passed u/s 201(1)/201(1A) prima facie reveals that exactly the same demand has been raised and further the figures are also identical. Therefore, while holding that the assessee could not be penalized twice for the same default, we restore the matter back to the file of AO for limited purpose of verifying whether both the demand relates to same default and whether the assessee has settled demand for AY 2004-05. If so, the demand for impugned AY may be deleted. The Assessee, in turn, is also directed to substantiate the same before AO failing which the AO shall be at liberty to decide the matter after perusal of available material on record.”
Pursuant to the directions issued by the coordinate bench of the Tribunal, the Assessing Officer (TDS) issued notices and called for details in order to carry out the verification as directed by the Tribunal. However, as evident from the record, the Assessing Officer (TDS), in absence of any details submitted by the assessee, proceeded to compute the demand of TDS and interest of Rs.20,84,018 vide order dated 26/12/2018 passed under section 201(1)/201(1A) of the Act.
The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee by observing as under:
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
“74. In view of above, it is observed that the assessee has completely failed to stablish the claim made by it before ITAT, that the demand raised by he AO in AY 2004-05 and AY 2005-06 were related to same identical expenses on which default of non deduction of TDS was committed by the assessee. Not only before AO, but even during these appellate proceedings absolutely no documentary evidences have been produced by the assessee to establish the said claim. Therefore, it is quite evident that the TDS default committed in respect of expenses incurred in FY under consideration ie F.Y. 2004-05 were not the same as the TDS default committed in respect of expenses incurred in FY under consideration ie. F.Y. 2003-04 Consequently, Ground no. 3 stands dismissed where the assessee has contended that the AO has erred in raising demand of Rs.20,84,018/-inclusive of interest payable on alleged non deduction of tax by overlooking the fact that the same was already added in the A.Y. 2004-05. While dismissing this Ground, it is worthwhile to note that AO has also brought on record that there was no payment made by the assessee corresponding to the demand raised by the AO in the order passed for A.Y. 2004-05, therefore the assessee had not settled the demand for A.Y. 2004-05 as well, as specifically directed by the ITAT to verify the same. 7.5. As regard the other contention raised in Ground no.2 that the AO has erred in passing order uls 201(1)/201(1A) thereby raising demand of Rs.20,84,018/- by passing the order beyond the directions of the order of ITAT in which it was specified that, we restore the matter back to the file of Assessing Officer for limited purpose and therefore such additions is bad in law, it is observed that AO in the present order under consideration in the present appeal has observed that in the original order passed by AO on 28-03-2011 u/s 201(1)/201(1A) of the IT Act [in which total amount of Rs. 3,24,179/- was determined by AO], the figure of Transport charges (Contract charge) were wrongly adopted at Rs. 29,65,593/- instead of correct figure of Rs. 2.96.59.597/-, therefore AO rectified this mistake in the present order and considered the correct figure of Rs.2,96,59,597/-, and accordingly worked out TDS liability and interest payable thereon. I have considered the mistake corrected by AO. It is observed that in the original order passed by AO on 28-03-2011, the figure of expenses incurred under Transport charges (Contract charge) was inadvertently wrongly adopted at Rs. 29,65,593/- instead of correct figure of Rs. 2,06,59,597/-. This mistake has now been corrected by AO and the correct amount of TDS liability and interest payable thereon has been worked out by AO. This approach of AO can in no manner be treated as travlling beyond the directions given in the order of ITAT. Consequently, Ground no. 2 stands dismissed.”
Being aggrieved, the assessee is in appeal before us.
We find that vide order dated 28/03/2011, passed under section 201(1)/201(1A) of the Act, for the assessment year 2004-05, the ITO (TDS)
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
treated the assessee as an assessee in default in respect of the following payments and computed the demand of Rs.3,24,179 as under:
Amount Paid TDA Amount Nature of Payment TDS Rate Interest (Rs) (Rs) (Rs) Contractor 29,65,597 2.24% 66,429 47,829 Rent 5,19,639 22.44% 1,16,607 83,957 Professional Fees 1,06,666 5.10 5,440 3,917 Total: 1,88,476 1,35,703
In the 1st round of proceedings, it was the plea of the assessee that the 10. demand of TDS and interest raised in the assessment year 2004-05 under section 201(1)/201(1A) of the Act is in respect of the same default for which demand for the assessment year 2005-06 under section 201(1)/201(1A) of the Act has been raised. We find that the coordinate bench of the Tribunal vide order dated 12/04/2017 accepted the submission of the assessee, however, restored the matter to the file of the Assessing Officer for the limited purpose of verifying whether both the demand relates to the same default and whether the assessee has settled demand for the assessment year 2004-05. If so, the coordinate bench also directed that the demand for the year under consideration may be deleted. During the hearing before us, the learned AR submitted that in the assessment year 2004-05, the learned CIT(A) granted partial relief to the assessee, in respect of non-deduction of TDS on warehousing charges, rent, and professional fees. The learned AR further submitted that the demand raised pursuant to the order giving effect to the order passed by the learned CIT(A) has been paid by the assessee. From the perusal of the table in paragraph 5 and paragraph 9 above, it is prima facie Page | 6
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
evident that the same demand has been raised in respect of the same payment. Further, the amount is also the same. However, the assessee has not brought any satisfactory evidence on record to prove that the demand raised pursuant to the order giving effect to the order passed by the learned CIT(A) for assessment year 2004-05 is paid by the assessee. Accordingly, we deem it appropriate to remand this matter to the Assessing Officer (TDS) limited to the extent of verification of whether the demand raised pursuant to order passed by the learned CIT(A) for assessment year 2004-05 has been paid by the assessee. We further direct that if upon verification the aforesaid submission of the assessee is found to be true, the demand raised twice, i.e. in the year under consideration as well as in the preceding assessment year, be deleted.
We further find that the Assessing Officer (TDS) vide its order dated 26/12/2018 passed under section 201(1)/201(1A) of the Act, pursuant to the direction of the Tribunal, has raised a demand of Rs.20,84,018, which is more than the demand of Rs.3,24,179 raised in the 1st round vide order dated 28/03/2011 passed under section 201(1)/201(1A) of the Act. As noted above, the coordinate bench of the Tribunal vide order dated 12/04/2017 remanded the matter to the file of the Assessing Officer only for the limited purpose of verifying whether both the demands relate to the same default and whether the assessee has settled demand in the preceding year. Thus, in view of the above, we are of the considered opinion that the enhanced demand of TDS and interest raised by the Assessing Officer (TDS) is not in conformity with the directions of the coordinate bench of the Tribunal and therefore is directed to
GAD Logistics India Pvt. Ltd. ITA no.2930/Mum./2022
be deleted. It is also further pertinent to note that the order dated 26/12/2018 passed under section 201(1)/201(1A) of the Act was passed only pursuant to the directions passed by the coordinate bench of the Tribunal and the same is not passed in any rectification proceedings under section 154 of the Act. It is trite that the appellant cannot be placed in a worse position as a result of filing an appeal. Therefore, the Assessing Officer (TDS) is directed to delete the enhanced demand raised vide order dated 26/12/2018 passed under section 201(1)/201(1A) of the Act.
With the above directions, the impugned order passed by the learned CIT(A) is set aside and the matter is restored to the file of the Assessing Officer (TDS). As a result, grounds No. 2 and 3 raised in assessee’s appeal are allowed for statistical purposes.
The issue arising in ground No. 4 is pertaining to the initiation of penalty proceedings, which is premature in nature. Accordingly, ground No. 4 is dismissed.
Ground No. 5 is general in nature and needs no separate adjudication, in view of our aforesaid findings.
In the result, the appeal by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 24/02/2023 Sd/- Sd/- M. BALAGANESH SANDEEP SINGH KARHAIL ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 24/02/2023 Page | 8
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Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai