COMMISSIONER OF INCOME TAX (TDS) CHANDIGARH vs. CHIEF PROJECT MGR., RAILWAY ELECTRIFICATION, AMBALA CANTT

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ITA/106/2012HC Punjab & HaryanaPHHC01099168201211 December 2014Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE MAHABIR SINGH SINDHU2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted the statement made by the counsel for the revenue, withdrawing the assessment order. Consequently, the orders passed by the Commissioner of Income Tax (Appeals) and the ITAT were deemed to have ceased to exist. The appeals were disposed of as infructuous. The Assessing Officer was granted liberty to proceed afresh from the stage of service of the show cause notice by serving a detailed show cause notice outlining the parameters for consideration. All legal objections relating to the assumption of jurisdiction, delay, if any, were expressly left open to be raised by the respondent (assessee). The specific findings of the ITAT regarding Section 194C were rendered moot by the withdrawal of the assessment order.

What were the facts?

The Revenue (Commissioner of Income Tax) filed appeals against orders passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had held that the assessee (Chief Project Manager, Railway Electrification) was not liable to pay tax under Section 194C of the Income Tax Act, 1961, due to a lack of proof of a works contract and failure to demonstrate the creation of tangible assets or infrastructure. The appeals under challenge were ITA Nos. 106 to 112 of 2012 and ITA Nos. 185, 200, 252 of 2014. The High Court was hearing these appeals.

What were the issues?

1. Whether the assessee is liable to pay tax under Section 194C of the Income Tax Act, 1961, for want of proof of a works contract and failure to prove creation of tangible assets/infrastructure. (Question of law and fact, concerning Section 194C). Assessee's Contentions: - The revenue has withdrawn the assessment order. - The question of delay in assuming jurisdiction under Section 201(1) of the Act should be left open. - In case the department takes assistance of technical experts, the respondent should be granted adequate opportunity to produce its own experts to prove that electricity supplied by Electricity Boards does not fall within the ambit of Section 194J of the Act. Revenue's Contentions: - The assessee does not fall under Section 194C of the Act. - The assessee's income falls under Section 194J of the Act. - Instructions have been received to withdraw the assessment order but with liberty to proceed under Section 201(1A) of the Act from the stage of service of the show cause notice and examine the matter in its entirety under Section 194J of the Act.

Which sections of the Income-tax Act were involved?

Section 194C,Section 194J,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

ITA No.106 of 2012 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.106 of 2012 (O&M) Date of Decision:11.12.2014 Commissioner of Income Tax, Chd. .... Appellant Versus Chief Project Manager, Railway Electrification, Ambala .... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE B.S.WALIA Present: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. Brijeshwar Singh Kanwar, Advocate for the respondent. ***** Rajive Bhalla, J. (Oral) By way of this order, we will decide ITA Nos.106 to 112 of 2012 and ITA Nos.185, 200, 252 of 2014 filed by the revenue challenging order passed by the Income Tax Appellate Tribunal holding that for want of proof of a works contract and failure to prove creation of tangible assets/infrastructure, the assessee is not liable to pay tax under Section 194(C) of the Income Tax Act, 1961 (hereinafter to be referred as the Act). Counsel for the revenue submits on instructions based upon letter dated 01.12.2014, issued by Commissioner of Income Tax (TDS)-2, Chandigarh that though is true that the assessee does not fall under Section 194(C) of the Act but as the assessee's income falls under Section 194(J) of the Act, she has instructions to withdraw the assessment order but with liberty to proceed under Section 201(1A) of SONIA BURA 2014.12.19 16:55 I attest to the accuracy and integrity of this document chandigarh

ITA No.106 of 2012 (O&M) -2- the Act from the stage of service of the show cause notice and examine the matter in its entirety under Section 194(J) of the Act. Counsel for the respondent states that though the revenue has withdrawn the assessment order, the question of delay in assuming jurisdiction under Section 201(1) of the Act may be left open and it may be directed that in case the department takes assistance of technical experts etc. the respondent should be granted adequate opportunity to produce its own experts to prove that the electricity supplied by Electricity Boards does not fall within the ambit of Section 194(J) of the Act. We have heard counsel for the parties. In view of statement made by counsel for the revenue, withdrawing the assessment order, the orders passed by CIT(A) and the ITAT shall cease to exist. The appeals are therefore, disposed of as infructuous. The Assessing Officer shall be at liberty to proceed afresh from the stage of service of show cause by serving a detailed show cause notice setting out parameters for his proposed consideration. All legal objections relating to assumption of jurisdiction, delay, if any, etc. shall be open to the respondents.

(RAJIVE BHALLA) JUDGE (B.S.WALIA) JUDGE 11.12.2014 sonia SONIA BURA 2014.12.19 16:55 I attest to the accuracy and integrity of this document chandigarh

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