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Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
PER KULDIP SINGH, JUDICIAL MEMBER :
The appellant, ACIT, Circle 73 (1), New Delhi (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned orders dated 27.02.2015 & 26.02.2015 passed by Ld. CIT (Appeals)-18, New Delhi qua second quarter for FY 2013-14 & fourth quarter for FY 2012-13 respectively on the identical grounds, except the difference in amount, inter alia that:-
“1. Whether on the facts and in the circumstances of the cases, the Ld. CIT(A) has erred in directing the AO to verify demand/payment and pass fresh order without considering the provision of sub section (a) of section 251(1).
2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in directing the AO to delete the demand ( Rs.72,49,843/- & Rs.21,05,618/- for second quarter for FY 2013-14 & fourth quarter for FY 2012-13 respectively) created on account of wrong/invalid PAN without considering the provisions of section 206AA which is mandatory in nature.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : Air India Limited, earlier known as Indian Airlines Limited, a 100% Government owned company, engaged in transportation of goods, passengers and parcels etc. in domestic and international sector by Air through an aircraft and as such is a national carrier. Assessee filed TDS return for second quarter for FY 2013-14 on 30.08.2013 and TDS return for fourth quarter for FY 2012-13 on 02.07.2013. For AY 2013-14 second quarter, an intimation was sent raising a demand of Rs.84,62,260/- and for FY 2012-13 fourth quarter for Rs.60,85,320/- on account of short deduction of TDS. For FY 2013-14 second quarter, a demand of Rs.72,49,843.84 was raised u/s 200A on account of short deduction and for FY 2012-13 fourth quarter, as per intimation u/s 54, demand of Rs.21,05,618.10 was raised. It is the case of the assessee that short deduction for FY 2013-14 second quarter is due to non-mentioning of the PAN number in case of M/s. Engine Lease Finance B.V. in filing the return and due to mentioning of incorrect PAN numbers of some of the employees due to clerical error in case of TDS return for fourth quarter (FY 2012-13).
Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the demand after allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
Assessee has not preferred to put in appearance despite issuance of the notice and consequently, we proceeded to decide the present appeal with the assistance of the ld. Senior DR as well as on the basis of documents available on the file.
We have heard the ld. Departmental Representative for the revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly, Air India Ltd. has made payment to the foreign entity. It is also not in dispute that the demand has been raised on account of short deduction on account of mentioning of the wrong PAN number.
In case of short deduction of demand for second quarter (FY 2013-14), the same is claimed to be on account of non-mentioning of the PAN number of M/s. Engine Lease Finance B.V. at the time of filing the return. The Revenue has treated the TDS deduction by treating the party having a PAN number and thus applying the higher TDS @ 20% whereas as per Double Taxation Avoidance Agreement (DTAA) between India and Netherland, the rate of tax is 10% along with interest. Assessee has also paid interest for late payment. Assessee has also made payment on account of late filing of return fee. So far as demand of Rs.10,82,594/- on account of short deduction of Rs.72,49,843.84 is concerned, the same is not sustainable as it is not the case of short deduction but it is the case of wrongly applying the TDS rate by losing sight of DTAA between India and Netherland. Insofar as demand for fourth quarter (FY 2012-13) deduction for Rs.2,10,200/- is concerned, the Revenue has treated this transaction with incorrect PAN numbers and has applied TDS @ 20%. It is also not in dispute that when the correct PAN numbers of the concerned employees is mentioned in the revised TDS return, the demand would come to nil. However, the assessee has agreed to deposit interest demand as well as late filing fee on account of late deposit of tax.
When we examine all the aforesaid facts in the light of undisputed fact that final assessment is still pending with the Department, the appeal filed by the assessee before ld. CIT (A) was not maintainable as the assessee has categorically made submission that interest demand on account of late deposit of tax and late filing of return, demand is being deposited by the assessee, there was no question of deleting the demand raised as all these facts were to be examined by the AO during assessment on the basis of submissions made by the assessee.
Moreover, section 200A of the Act is a self-contained procedure to process the statement of tax deduction at source after making adjustment of any arithmetic error or incorrect claim. Furthermore, the assessee has made an undertaking before the Commissioner that it is revising the return for incorporating the PAN numbers of those employees which will otherwise lead to the demand nil and in case of demand for second quarter for FY 2013-14, no interest shall be charged as the demand itself would not be sustainable.
In view of what has been discussed above, we are of the considered view that the ld. CIT (A) has erred in deleting the demand particularly when assessment proceedings qua the year under assessment are already pending with the Department, hence present appeals filed by the Revenue are allowed. Order pronounced in open court on this 2nd day of November, 2018.