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Income Tax Appellate Tribunal, DELHI BENCHES: Bench ‘D’, NEW DELHI
Before: SMT. BEENA A PILLAI & SHRI PRASHANT MAHARISHI
ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order dated 17/03/15 passed by Ld. CIT (A)-41, New Delhi on following grounds of appeal:
1. “That under the facts and circumstances of the case and in law, both the lower authorities have erred in sustaining an addition u/s 201(1)/201(1A)/206C(6)/206C(6A)/206C(7) of the Income Tax Act, 1961 on account of non deduction of TDS u/s 194C of the Income Tax Act, 1961.
2. That under the facts and circumstances of the case and in law, on the basis of explanation, documents/evidences furnished before, both the lower authorities have failed to understand the nature of transaction carried out by the assessee with RITES which are outside the purview of Section 194C of Income Tax Act, 1961.
3. That without prejudice under the facts and circumstances of the case and in law, TDS provisions have been properly complied with by the appellant. 4. That no proper and reasonable opportunity of being heard has been provided by the lower authorities. The appellant craves leave to add, alter, amend or vary any of the above grounds either before or at the time of hearing.” Brief facts of the case are as under: 2. Assessee is an Institution established at Aligar. During the year under consideration assessee entered into contract with RITES on 01/10/07 to execute work contract during Commonwealth Games 2010. Ld. AO was of the view that, as per provisions of section 194C assessee was required to deduct TDS while crediting amounts of RITES or while making payments to them whichever was earlier. Ld.AO issued notice requiring assessee to furnish details regarding tax deducted at source, while making payment of Rs.41,57,00,000/-. As no details were filed and nobody appeared in the case, Ld.AO initiated proceedings under section 201 (1)/201 (1A) for year under consideration and computed penalty at Rs.1,22,34,885/-. 3. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT (A). Assessee filed additional evidence under Rule 46A on which remand was called for from Ld.AO. In remand report Ld.AO observed that, due to non-submission of details/evidences by assessee, it was concluded that assessee has not discharged its obligation of deducting tax at source. 2
4. Ld.CIT (A) upon going through various documents submitted by assessee, observed that assessee cannot be treated as assessee in default under section 201(1) of the Act to the extent of payment of Rs.1,85,97,104/-. Ld.CIT (A) restricted liability at Rs.8,14,02,896/-, as TDS was not deducted and assessee failed to provide any evidence.
Aggrieved by order of Ld.CIT (A), assessee is in appeal before us now. 6. Ld.AR submitted that sum of Rs.10,00,00,000/- paid by assessee to RIETS are in the nature of advance in the hands of recipient. It was submitted that RIETS has acted as mere pass through entity in this regard, inasmuch as the said amount was paid by RIETS to contractor’s who were engaged by it on which RIETS deducted TDS at applicable rates. It was thus submitted that assessee cannot be held liable to deduct tax at source under section 194C of the Act on payments made to RIETS. He placed reliance upon decision of Hon’ble Supreme Court in case of Hindustan Coca-Cola beverages Ltd vs CIT reported in (2007) 293 ITR 226, wherein it was held that assessee will not be treated as assessee in default under section 201 (1) of the Act, if TDS is deducted and has paid taxes on receipts. 7. On the contrary, Ld.Sr.DR submitted that, provisions of TDS would be applicable in present case, as payment have been made by assessee to RIETS in installment, which exceeds prescribed limits during the year.
She further submitted that Ld.CIT (A) granted relief to assessee to the extent of Rs.1,85,97,104/-, without verifying details of RIETS, as to 3 Government Treasury.
We have perused submissions advanced by both sides in light of records placed before us.
Ld.AR placed reliance upon decision of Hon’ble Delhi High Court in CIT vs Trance Bharat Aviation Pvt.Ltd., reported in 320 ITR 671I and submitted that RIETS being Government undertaking, taxes may be presumed to have been paid by due date of filing of return of income, and therefore liability of assessee to pay interest on amount which was to be deducted as TDS ends with due date of filing of return by RIETS. At the outset, Ld. AR submitted that assessee was not given sufficient time to furnish relevant records/information before the Ld. AO prior to passing of the order dated 28/03/13 as case was going to be time-barred on 31/03/13.
As held by Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. v. CIT reported in 163 Taxman 355, the taxes cannot be recovered once again from assessee in a situation in which recipient of income has paid due taxes on income embedded in payments from which tax withholding requirements were not fully or partly, complied with by assessee. Section 201 has been subsequently amended by inserting proviso to section 201 by Finance Act, 2012 w.e.f.
01.07.2012.
We are therefore inclined to set aside this issue to Ld.AO for verification whether taxes has been paid by RIETS on amount received from assessee during the year under consideration, either directly or in the form of withholding tax, which stands deposited with government Treasury as per law.