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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 226 to 229/JP/2022
PER BENCH: These four appeals by the assessee are directed against separate orders of ld. CIT(A), National Faceless Appeal Centre- Delhi (hereinafter referred to as ‘NFAC’) All dated 12.05.2022 for the assessment years 2013-14 (Quarter 1 to 4) respectively. Since the issues involved are common in all the above appeals and the appeals were heard together, therefore, these are being disposed off by this common order for the sake of convenience and brevity. 2. As a lead case, for deciding the appeals, we take ITA No. 226/JP/2022 for the A.Y. 2013-14 Quarter 1 wherein following grounds have been raised by the assessee.
2 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
“ 1.That on the facts and in the circumstances of the case the CIT(A), NFAC grossly erred in confirmation the order passed by ld. AO. 2. That on the facts and in the circumstances of the case the CIT(A), NFAC grossly erred in upholding that the assessee deemed to be in default u/s 201(1) of the I.T. Act, 1961 for non deduction of TDS u/s 194C of the Act. 3. That on the facts and in the circumstances of the case the CIT(A), NFAC grossly erred in sustaining the demand of Rs. 2288076.00/- raised by ld. AO u/s 201(1)/201(1)(1A) of the I.T. Act, 1961. 4. Case the CIT(A), NFAC grossly erred in without analyzing the provision of section 194C in right prospective and sustained the demand created by ld. AO. 5. That the petitioner may kindly be permitted to raise any additional or alternative grounds at or before the time of hearing. 6. The petitioner prays for justice & relief.”
Brief facts of the case are that the assessee deductor is a local authority
of the State Government of Rajasthan, engaged in providing basic facilities in
Jaipur like sanitation, sewage, lighting, road, infrastructure etc. A TDS/TCS
verification u/s 133A(2A) of the Income Tax Act, 1961 (in short “Act”) dated
20.10.2015 was conducted at the office premises of the assessee/deductor.
Subsequently to such verification, proceedings u/s 201(1)/201(1A) of the IT Act, 1961 was initiated by the AO, TDS in respect of 1st Quarter of F.Y. 2012-
13 vide letter dated 26.07.2019.
3 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
The AO assessed the finding that the assessee is deemed to be in
default u/s 201(1) for non deduction of TDS on payment paid to its
party and accordingly total demand of Rs. 22,88,076/- is being raised
u/s 201(1)(201(1A) of the IT Act for F.Y. 2012-13 Q1. Issue demand
notice and challan accordingly. Interest is to be charged as per rules.
Intimation for penalty u/s 271(1)(c) is to sent to the Addl. CIT
separately for non deduction of TDS on perquisites paid by the
assessee. This is in addition to any demand that may be raised in
respect of F.Y. 2012-13 on any other issue not covered in this order
for the financial year involved in this order and on regular processing
of TDS returns filed by the assessee.
Aggrieved by the order of the Assessing Officer the assessee
preferred appeal before the Ld. CIT(A). The Ld. CIT(A) has confirmed
the action of the Assessing Officer and sustained the additions and the
findings are reproduced as under:-
“ I have perused the list of payees mentioned in the order u/s 201(1)(201(1A) of the Act. After going through the said list of the payees, it cannot be said that the appellant had furnished status of all the payees duly supported with documentary evidence. Even during the appellate state, the appellant failed to furnished details relating to status of the payees duly supported by documents reflecting such status. The appellant was in best position to know about its payees and their status under the
4 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
Income Tax Act. In fact, such formation is maintained by the payers for ensuring compliance with TDS provisions. Therefore, the onus was on the appellant to provide such details and documents and then contend that TDS u/s 194C in respect of the payees having status of individual or HUF was to be made @ 1%. The appellant failed to discharge such onus and did not submit the requisite details. As per provisions of section 194C of the Act, TDS is deductible @ 1% or 2% depending upon status of payee. In absence of specific details of status of payees and documentary evidences in support of the same, there was no option left with the Assessing Officer other than to consider TDS to be deductible @ 2% u/s 194C of the Act in respect of all the payees. During the course of present appellant proceedings, the appellant has not brought any material on record to justify its claim. Therefore, in the facts of the case as discussed above, I do not find that there is any justification in taking a divergent view than that taken by the AO, TDS. In view of the same, I am not inclined to interfere with the order of the AO, TDS. 6. In the result, the present appeal of the appellant for A.Y. 2013-14 is dismissed.”
Being aggrieved by the CIT(A), the assessee preferred an appeal before
us. The Ld. AR for the assessee has reiterated its arguments in written
submission for all the grounds which are as under:-
“We could not produce the documents timely because of the following reasons:-
5 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
The notices were sent on the mail could not be received on time at the concerning department and Finance Adviser of the municipal corporation was trapped by Anti-Corruption Bureau and some records were under the custody of Anti-Corruption Bureau and there was no incumbent officer who could give the authority to others to file the submission. 2. The Corporation is divided into different Zones at different places and records were kept at Zone wise and such records were being maintained in manual form by the corporation. So that it took so much time to collect the data from all zones. It is prayed before the hon’ble Bench to condone the delay in submission of documents and oblige.”
On the other hand, the ld. DR objected for admitting evidence which has
been produced before us for the first time. Further ld. DR submitted that the
evidences which has been produced is belated which is for the Financial Year
2012-13 and the explanations given by the ld. AR for the assessee was not
acceptable and it is almost after 8 years he has submitted documents which are
pertaining to TDS 2012 2013. Further, the ld. DR submitted that the Bench
may award heavy cost for the lethargic causal approach of the assessee and
wasting the Department time .
We have considered the rival contention and perused the orders of the
authorities and the material available on record. We observed that the assessee
has not submitted any documentary evidences pertaining to non deduction of
6 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
TDS which was paid by the assessee. During the course of assessment
proceedings, the reply given by the assessee was vague as there is not definite
list of deductee is given by the assessee for which TDS has to be deducted
should have been at the rate of 1% and before the ld. CIT(A) also the assessee
did not furnish any reply. The ld. CIT(A) has observed in its order in para 5.2
that the assessee was asked to submit its reply and details/documentary
evidences in support of its grounds of appeal, therefore, the ld. CIT(A) has
uphold the orders of the AO. Taking into consideration the present facts and
circumstances of the case, the ld. AR for the assessee has produced documents
which contains the deductee their PAN and copy of work order, which has
been produced before us as evidence for the first time. Further the Ld AR for
assessee submitted that the assesee has not submitted the evidence before the
AO nor before the CIT (A) in spite of many reminders the reason submitted
by the AR for the assesee is that assesee received the notice by mail which was
not received to the assesee directly in time. notices were sent on the mail could
not be received on time at the concerning department and Finance Adviser of
the municipal corporation was trapped by Anti-Corruption Bureau and some
records were under the custody of Anti-Corruption Bureau and there was no
incumbent officer who could give the authority to others to file the submission.
7 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
We are constrained for the acceptance of the documents as additional
evidence de hors Rule 46A of the Rules, because the appellant is not entitled to
produce oral or documentary evidence afresh before the appellate authority, as
a matter of right. Under special and certain circumstances only, as mentioned,
in clauses (a), (b), (c) and (d) of Rule 46A(1) additional evidence can be
adduced. Rule 46A itself contains the principles of natural justice. That being
so, sub-rule (4) of Rule 46A does not permit to accept any additional evidence
in contravention of the provisions of sub-rules (2) and (3) of Rule 46A. The
appellate authority is not permitted to act whimsically while exercising the
jurisdiction under Rule 46A of the Rules.
In this regard, We have gone through the decisions of various High
Courts in the cases :
[2006] 153 TAXMAN 31 (GUJ. ) High Court Of Gujarat N.B. Surti Family Trust Vs. Commissioner Of Income-Tax.
[2007] 162 Taxman 257 (Gau.) High Court Of Gauhati Commissioner Of Income-Tax Vs.Ranjit Kumar Choudhury.
[2018] 89 Taxmann.Com 126 (Allahabad) High Court Of Allahabad Dr. Prabhu Dayal Yadav Vs. Commissioner Of Income Tax.
We noted from the following judgments, that considering the fact that these additional evidences which are now sought to be admitted would be in the interest of proper adjudication of the issues at hand, the same are hereby admitted and the matter is set-aside to the file of AO to examine the same and decide the matter as per law after providing reasonable opportunity to the assessee and therefore we deem it fit to remand it back to the file of AO.
8 ITA No. 226 to 229 /JP/2022 Municipal Corporation Jaipur
Accordingly, it is a fit case for remand for proper adjudication of the case by following the established procedure laid down. Under rules 46A(1), (2) and (3) of the Rules which we order accordingly. The impugned order passed by the Lower authority is hereby quashed and set aside. The appeal is remanded to the AO, who shall make an endeavour to dispose of the entire appeal in accordance with law as indicated above as expeditiously as possible, where additional evidence as it requires to justify the claim of assessee which needs to be verified and examined by the Revenue authorities afresh after allowing proper opportunity to the assessee.
I.T.A No(s). 227 to 229/JP/ 2022 (Assessment Year: 2013-14 Quarter 2 to 4) 13. As the facts and the issues involved in the captioned appeals remain the same as were involved in the aforementioned appeal in ITA No. 226/JP/2022, therefore, our order therein passed shall apply mutatis mutandis for the purpose of disposal of the captioned appeals. In the result, the appeals of the assessee is allowed for statistical purposes in all the cases.
Order pronounced in the open Court on 29/08/2022. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼,l-lhrky{eh½ (Dr. S. Seethalakshmi) (RATHOD KAMLESH JAYANTBHAI) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29/08/2022. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Municipal Corporation Jaipur, Jaipur. 1.
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