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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI GAGAN GOYAL
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “H”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos.390 & 391/M/2022 Assessment Years: 2012-13 & 2013-14 Mr. Kamal Jafferali Income Tax Officer, Wadhwania, Ward 2(2)(4), Room No.716, 7th Floor, 504/A, Green Park, Usha Darshan CHSL, Smt K.G. Mittal Vs. Sjantivan MHADA, Ayurvedic Hospital Off Link Road, Building, Andheri West, Charni Road, Mumbai - 400053 Mumbai - 400002 PAN: AAHPW5049G (Appellant) (Respondent)
Present for: Assessee by : None Revenue by : Shri Tejinder Pal Singh, Sr. A.R. Date of Hearing : 13 . 07 . 2022 Date of Pronouncement : 25 . 08 . 2022 O R D E R Per : Kuldip Singh, Judicial Member: For the sake of brevity aforesaid appeals bearing common question of law and facts are being disposed of by way of composite order.
Appellant Mr. Kamal Jafferali Wadhwania (hereinafter referred to as the assessee) by filing aforesaid appeals sought to set aside the impugned order dated 27.12.2021 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax
ITA Nos.390 & 391/M/2022 2 Mr. Kamal Jafferali Wadhwania (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment years 2012-13 & 2013-14 on the grounds inter alia that:
“1. On facts and circumstances of the case and in law, the AO as well as CIT(A) are erroneous in holding that the TDS is deductible at 10% instead of 2% on the common area maintenance (CAM) service without appreciating the law settled on the issue in favour of appellant. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A), erred in treating the appellant in default u/s 201(1) and charging interest u/s 201(lA)of Income Tax Act. 3. On the facts and circumstances of the case and in law, the Apex Court judgment of Hindustan Coca Cola Beverages Ltd (293-ITR-26) applicable or not. 4. On the facts and circumstances of the case and in law, the Ld. CIT (A), further erred in not accepting the various case laws including the judgment of ITAT, New Delhi Bench. 5. The appellant pray that the Order of the Ld. CIT(A) on the above grounds be set aside in toto. 6. The appellant craves leave to amend or alter any ground or add a new ground.
Briefly stated facts necessary for adjudication of the controversy at hand are: on the basis of information received from office of DCIT(TDS) during the course of survey action in case of Runwal Group that one M/s. S.K. Trends the assessee in this case was one of the tenants of R. City Mall of R. Mall Developers Pvt. Ltd. during F.Y. 2010-11. It is noticed that payment of rent is also made by the assessee to R. Mall Developers Pvt. Ltd. by deducting the TDS on Common Area Maintenance (CAM) charges at 2% under section 194-i of the Income Tax Act, 1961 (for short ‘the Act’) and as such held the assessee in default to pay tax under section 201(1) of the Act for not deducting and depositing of TDS under section 193(1) of the Act on the amount of Rs.5,68,076/- and interest under section 201(1A) of the Act and thereby raised the demand of Rs.82,010/- (Rs.45,443 default + Rs.36,568 interest) by passing an order under section 201(1)/201(1A) of the Act.
ITA Nos.390 & 391/M/2022 3 Mr. Kamal Jafferali Wadhwania 4. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has upheld the order passed by the Assessing Officer (AO) by dismissing the appeal. Feeling aggrieved with the impugned order the assessee has come up before the Tribunal by way of filing present appeals.
Despite issuance and service of the notice to the assessee none appeared on behalf of him, so the Bench decided to decide these appeals on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
Bare perusal of the order passed by the Ld. CIT(A) goes to prove that the assessee has come up with specific defence that on entire rental he was not required to deduct the tax at source (TDS) at 10% because on amenity charges and CAM charges TDS @ 2% was to be deducted under section 194C of the Act. Assessee has given the detail of making payment of rent and amenity charges in the statement of facts as under:
"The appellant is an individual. He was running a proprietary concern in the name and style of M/s S K Trends, engaged in the business of trading of footwear. It has registered address at 504/A, Green Park. Usha Darshan CHSL, Off Link Road, Andheri West, Mumbai-400058. 2. The appellant had taken the premises, being Unit- No. F-8, on the first floor in the Commercial Complex called "R City Mall", in Ghatkopar (West), Mumbai on leave & license basis from the licensor R Mall Developers Pvt. Ltd. The said unit was taken on leave & license basis, vide agreement dated 24.07.2009. There were separate agreements for amenities charges and common area maintenance. During the period 01.04.2012 to 30.11.2012,
ITA Nos.390 & 391/M/2022 4 Mr. Kamal Jafferali Wadhwania details of payments made to R Mall Developers Pvt. Ltd. and TDS thereon are as under:
Sr. No. Description Amount Paid (Rs.) Rate of TDS TDS Amount (Rs.) 1 Rent 3,53,598 10 % 35,360
2 Amenities charges 3,53,598 10 % 35.360
3 Common area 1,27,804 2% 7,967 maintenance charges 2,556
4 Revenue share 79,613 10% 7,967 Unit F-16: Further, the appellant has entered into an agreement dated 11.04.2012 with R Mall Developers Pvt. Ltd. for a shop F-61, in Phase-II of "R City Mall", which was not fully constructed and not fully operational, affecting the business of the tenants. Therefore, rent for shop was paid by me only for the month of November, 2012. Even the said rent was subsequently waived. During the period 01.04.2012 lo 30.11.2012, details of payments made to R Mall Developers Pvt. Ltd. and TDS thereon are as under:
Sr. No. Description Amount Paid (Rs.) Rate of TDS TDS Amount (Rs.)
1 Rent for shop 3,74,697 10% 37,470 2 Amenities charges NIL NIL NIL 3 Common area 4,40,272 2% maintenance charges 8,806 4 Revenue share 5,23,510 10% 52,350
In the order passed on 18.03.2019, the learned ITO(TDS)-2(2)(4), Mumbai (hereafter, "the Id. AO") has held that the appellant was liable to make TDS @ 10% in respect of common area maintenance charges u/s 194-1. Accordingly, the AO has held the appellant as assesses in default for short fall in deducting and depositing the TDS u/s 194-1 in respect of payments towards common area maintenance for unit No. F-8 and Unit No.F-61. The AO has directed the appellant to pay the default amount of Rs.82,OW/~ {default u/s 201(1): Rs.45,443 and interest u/s 201(1 A: Rs.36.568]. 4. Aggrieved, the appellant has preferred the present appeal before your honor. The appellant prays for appropriate relief."
ITA Nos.390 & 391/M/2022 5 Mr. Kamal Jafferali Wadhwania 8. In reply to the show cause notice Assessee has also taken specific defence as under: “In reply it was submitted that - "Common area maintenance facility is not only provided to me individually and I have to pay my part of the share, based on the various combinations. The expense paid as common area maintenance included maintenance of various facilities like A.C services for common area, House-keeping, society etc. which is a type of contract and such does not fall in the category of Rent. R.Mall Developers Pvt. Ltd collects common maintenance charges from all the tenants in the Mall and pay them to the contractors, who provide the said maintenance in the Mall. Thus, the payments to such contractors are indirectly paid by me. Such kind of works fall under the category of "works" in pursuance of contract between the contractor and a specified person, and the amount collected from me is in the nature of contract service, on which TDS applicability is u/s.194C." 9. When assessee has come up with specific defence by giving details the Ld. CIT(A) was required to verify these facts himself or through AO because apparently for making payment of amenity charges and CAM charges TDS @ 2% was to be deducted, which fact remained entirely undecided rather Ld. CIT(A) upheld the order passed by the AO by merely stating that “he is in agreement with the views of the AO and accordingly upheld the order.
We are of the considered view that the order passed by the Ld. CIT(A) is a cryptic one who has not decided the issue before him in view of the statement of facts and submissions made by the assessee and as such the case is remitted back to the Ld. CIT(A) to decide afresh after providing an opportunity of being heard to the assessee. Consequently, appeals filed by the assessee for A.Y. 2012-13 and 2013-14 are hereby allowed for statistical purposes. Order pronounced in the open court on 25.08.2022.
Sd/- Sd/- (GAGAN GOYAL) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 25.08.2022. * Kishore, Sr. P.S.
ITA Nos.390 & 391/M/2022 6 Mr. Kamal Jafferali Wadhwania Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.