JUGAL KAJARIA,HOWRAH vs. ITO, WD-58(2) (TDS), KOLKATA, KOLKATA

Both the assessees in the present case had incurred substantial expenditure on payment of hire charges and wages to labour during the years under consideration. While making the said payments, tax at source was not deducted by the assessees. In this regard, the explanation offered by the assessees that they were not liable to deduct tax at source from the said payments, was not found acceptable by the Assessing Officer and he proceeded to treat the assessees as in default under section 201(1A) for their failure to deduct tax at source from the payments made on account of hire charges and wages to labour. He also charged interest under section 201(1A) and accordingly passed the orders under section 201(1)/201(1A) of the Act on 28.03.2013 and 26.03.2014 for A.Y. 2007- 08 and 2008-09 respectively.

Against the orders passed by the Assessing Officer under section 201(1)/201(1A), both the assessees preferred their appeals before the ld. CIT(Appeals) challenging the validity of orders passed by the Assessing Officer on the ground that the same were barred by limitation. The assessees also challenged the action of the Assessing Officer in treating them as the assessees in default for their failure to deduct tax at source from the payments made on account of hire charges and wages to labour on merit on the ground that they were not liable to deduct tax at source from the said payments. After considering the submissions made on behalf of the assessees as well as the material available on record, the ld. CIT(Appeals) found merit in the preliminary legal issue raised by the assessees that the orders passed by the Assessing Officer under section 201(1)/201(1A) were barred by limitation. Accordingly, he cancelled the said orders by holding the same to be invalid. Keeping in view this decision rendered by him on the preliminary issue cancelling the orders passed by the Assessing Officer under section 201(1)/201(1A) by treating the same as barred by limitation, the ld. CIT(Appeals) did not deem it necessary to decide the other issue raised by the assessees in their appeals challenging the action of the Assessing Officer in treating them as 3 533 & 534/KOL/2016 Assessment Year: 2007-2008, 2007-08 & 2008-2009 the assessees in default under section 201(1)/201(1A) on merit. Aggrieved by the orders of the ld. CIT(Appeals) not deciding this alternative claim on merit, the assessees have preferred these appeals before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. The ld. counsel for the assessees has submitted that these appeals were preferred before the Tribunal by the assessees raising the issue relating to their alternative claim as an abundant precaution expecting that the Revenue might challenge the impugned orders of the ld. CIT(Appeals) holding the orders passed by the Assessing Officer under section 201(1)/201(1A) as barred by limitation by filing the appeals before the Tribunal. He has submitted that the Revenue, however, has not done that inasmuch as no appeals have been filed by the Revenue against the impugned orders of the ld. CIT(Appeals). He has contended that these appeals filed by the assessees thus have become virtually infructuous and the assessees have no objection if the same are dismissed by the Tribunal as infructuous. We find substance in this contention of the ld. counsel for the assessees and since the ld. D.R. has also not raised any material contention in this regard, we dismiss these three appeals filed by the assessees by treating the same as infructuous.

In the result, all the three appeals of the assessees are dismissed. Order pronounced in the open Court on 5th day of February, 2018.