Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
These two appeals by the assessee are arising out of the different order of Commissioner of Income Tax (Appeals)-14, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-14/TDS Rg. (3)/IT-1161 & 1160 /2011-12, dated 12.12.2013 & 16.12.2013. The Assessments were framed by the Deputy Commissioner of Income Tax (TDS), Circle-3(2), Mumbai (in short DCIT or AO) for the assessment year 2001-02 & 2002-03 vide order dated 24-03-2011 under section 201(1) of the Income Tax Act, 1961(hereinafter ‘the Act’).
2. At the outset, it is noticed that both the appeals of the assessee are time barred by 41 days and for that assessee has filed condonation petition stated the reasons that the appellate order was misplaced and the appeal could not be filed. The learned Counsel stated the fact that the CIT(A) passed the order, which was served on 04-01-2014 and appeal & 2537/Mum/2014 Shree Ram Urban Infrastructure Ltd. (A.Y:01-02 & 02-03) before Tribunal was required to be filed within 60 days i.e. by 04-03-2014. But ultimately, the appeal was filed on 15-04-2014. Therefore, there is delay of 41 days, the assessee also drew our attention to the affidavit filed by the whole time director and the relevant content reads as under: -
“1. That I am the whole time director of the appellant/ Applicant in the instant appeal and as such I am competent to depose by way of the present affidavit on the basis of my knowledge derived from the official records.
2. That I sate that the CIT(A)’s order had been misplaced in absence of proper staff.
that I state that the appellant in respect of the Assessment Year 2001-02 could not be filed before the due date and hence has resulted in delay in filing the instant appeal.
4. That I state that I pray the Hon’ble Tribunal to condone the delay occurred which is beyond the control of the appellant for which kind of ac, the appellant will remain ever grateful. “
When this was confronted to the learned Senior Departmental Representative (‘DR’), he could not controvert. In view of the above facts and circumstances, we condone the delay and admit the appeals.
3. The only issue in both the appeals of the assessee is as regards to the order of CIT(A) confirming the action of the AO in treating the assessee in default for AY 2001-02 under section 201(1) of the Act and also charging interest under section 201(1A) of the Act amounting to ₹ 89,709/- and in AY 2002-03 under section 201(1) and under section 201(1A) of the Act amounting to ₹ 64,550/-. For this assessee has raised identical worded ground and the ground has raised in AY 2001-02 which reads as under: - & 2537/Mum/2014 Shree Ram Urban Infrastructure Ltd. (A.Y:01-02 & 02-03) “1. The Hon'ble Commissioner of Income Tax (Appeals) (hereinafter referred as "CIT (A)") has erred in confirming the order of learned assessing officer (hereinafter referred as " AC.") in alleging nQi-e4uq4pn of TDS of Rs. 89,709/- U/s 201(1) of Income Tax Act, 1961 in respect of payment made to debenture Interest of Rs.4,15,461/-.
Without prejudice to ground no. 1, it is submitted that C1T(A) was explained that TPS was deducted and deposited to the credit of Government by the appellant company in A.Y. 2004-05 as against A.Y. 2001-02 being the year under consideration. Further the CJT (A) has failed to accept contention of appellant that the deductee party are assessed to tax therefore U/s 201 (1), the appellant should not be held liable for TDS as such deductee parties have filed Income Tax return and applicable taxes due in respect of such sum are already paid. It is further submitted that CIT (A) failed to take cognizance of the certificate submitted by the deductee party stating that it had offered income in Al. 2004-05 and TDS liability cannot be raised in such cases relying on Apex court decision in case of M/s. Hindustan Coca cola Beverage (1') Ltd. Vs. CIT (2007) 293 ITR 226.Accordingly, the necessary direction should be given in this regard.”
We have heard the rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that in FY 2000-01, the amount of interest accrued to the following parties as under: -
Sr. Name Amount of interest accrued No. for the FY 1999-2000 1. Vidhi Holdings Pvt Ltd. 400073 & 2537/Mum/2014 Shree Ram Urban Infrastructure Ltd. (A.Y:01-02 & 02-03) 2. Shri Virendra Popatlal 15388 Shah Total 415461 Similarly, in Financial Year 2001-02 amount of interest accrued is as under: -
Sr. Name Amount of interest accrued No. for the FY 1999-2000 1. Vidhi Holdings Pvt Ltd. 308184 2. Shri Virendra Popatlal 16440 Shah Total 324624 5. The assessee before AO as well as before CIT(A) claimed interest on debentures as expense and stated that the recipients parties are assessed to tax and they have included the interest accrued in their respective returns of income and therefore assessee cannot be held as assessee in default under section 201(1) and consequent interest under section 201(1A) of the Act cannot be charged. For this assessee relied on the decision of Hon’ble Supreme Court decision in the Case of Hindustan Coca Cola Beverage (P.) Ltd. vs. CIT (2007) 293 ITR 226. This plea was raised before CIT(A) also but CIT(A) confirmed the action of the AO vide Para 6 and 6.1 as under: -
“6. I have considered the facts of the case, submission of the appellant and order u/s.201(1)/201(1A). In the instant case interest has accrued in A.Y.2001-02 in the case of MIs. Vidhi Holdings Pvt. Ltd. and Shri Popatlal Shah. The appellant follows mercantile system of accounting. Therefore, this interest was to be credited in the accounts of MIs. Vidhi Holdings Pvt. Ltd-and Shri Popatla J Shah in A.Y. 200102. Hence the appellant was liable to deduct TDS in A.Y.2001-02 which he & 2537/Mum/2014 Shree Ram Urban Infrastructure Ltd. (A.Y:01-02 & 02-03) did not do. Therefore, the A.O. has rightly held the appellant as assessee in default for A. Y. 200 1-02.
6.1 The argument of the Ld. A.R. that TDS was deducted in A.Y.2004-05 for M/s. Vidhi Holding Pvt. Ltd. and even M/s.Vidhi Holding Pvt. Ltd. has shown it in A.Y.2004-05 has no relevance for A.Y.2001-02. It is also observed that this action of deducting TDS on interest has happened after the revenue has detected the discrepancy in survey conducted in 2002. For interest payment to Shri Popattai - Shah, no submission has been made at the time of appellate proceedings. The reliance in the case of M/s. Hindustan Coca Cola Beverages Ltd. '[SC) is misplaced as M/s.Vidhi Holding Pvt. Ltd. has not accounted for interest in its income in A.Y.2001-02.”
From the above facts and circumstances, we find that the TDS deducted for AY 2004-05 related to the interest accrued in FY 2000-01 and 2001-02 to these parties. The AO at least can verify this fact whether these parties i.e. the recipients have declared this interest in AY 2004-05 as claimed by assessee, he will delete the addition. We set aside these two appeals of the assessee to the file of the AO in term of the above directions.
In the result, the appeals of assessee are allowed for 7. statistical purposes.
Order pronounced in the open court on 27-10-2017.