EVERSHINE FILMS. P.LTD,MUMBAI vs. ITO (TDS) 1(5), MUMBAI

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ITA 2048/MUM/2013Status: DisposedITAT Mumbai24 June 2016AY 2005-063 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted the assessee's failure to provide substantiating evidence. However, in the interest of natural justice, the assessee was allowed to submit records of persons who had paid tax on the payments received, and the AO was directed to verify these and reduce the liability accordingly.

What were the facts?

During a survey, the assessee, a film producer, was found to have outstanding TDS liability. The assessee failed to provide details of TDS deduction and payment, leading to the AO determining a tax and interest liability. The CIT(A) directed the AO to verify the assessee's objections regarding the liability.

What were the issues?

Whether the assessee is liable for TDS default and interest, and the extent to which the liability can be reduced based on subsequent evidence of tax payment by recipients.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(1A),Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI SANJAY ARORA & SHRI PAWAN SINGH

For Respondent: Shri Sher Singh (DR)
Hearing: 18.05.2016

Assessee by : None. Revenue by : Shri Sher Singh (DR) Date of hearing : 18.05.2016 Date of Order : 24.06.2016 O R D E R PER PAWAN SINGH, JM: 1. These two appeals filed by assessee are directed against the order of CIT(A), Mumbai dated 18.11.2008 for Assessment Year (AY) 2005-06 & 2006-07 respectively. The assessee has raised the identical Grounds of appeal for both the AYs, hence, the same were heard together and are being disposed of by common order. The assessee has challenged the correctness of order u/s 201(1) dated 15.01.2007 passed by AO and upheld by the CIT(A).

2. As facts leading to file the present appeals are almost identical, so we are discussing the fact of ITA No. 2048/M/13. In nut shell the facts of the case are that the assessee is producer of feature films. A survey u/s. 133A of the Act was conducted at the premises of assessee on 03.08.2006 wherein the AO noticed that assessee has shown current liability in the trial balance for the period 01.04.2005 to 31.03.2006 for an amount of Rs. 2,68,476/- as TDS liability. The assessee was asked to furnish the details of the amount deducted and paid the details of non-deduction of TDS. No detail was furnished nor the assessee filed TDS return. The assessee was held to be in default u/s 201(1) of the Act. The AO calculated tax liability u/s 201(1) at Rs. 7,75,764/- and interest of Rs. 2,00,136/- u/s 201(1A) of the Act. Aggrieved by the order of AO, the assessee filed an appeal before the CIT(A).

3.

During the appellate proceeding before the CIT(A), the assessee submitted that assessee made payments to various persons/artist who were subject to deduction of tax. These payments mainly paid to renowned artist who are assessed to tax on which tax has been paid by such persons. As no TDS certificate were issued by the assessee for non-deduction. The AO has not given credit in respect of tax deducted at source and deposited to the credit of Government. On the contention of assessee, the appeal was disposed of with the direction to verify the objection raised by the assessee in the light of books of account maintained and in case, the AO find that claim of assessee is correct, the AO can reduce the amount of TDS as well as interest accordingly. Against the order of CIT(A), assessee has approached us.

4.

None appeared on behalf of assessee when the case was taken up for hearing despite repeated calls. We have heard ld. DR for Revenue and considered the material available on record. Ld. DR of the Revenue argued that assessee was already granted relief and no further relief can be granted to the assessee in absence of any explanation offered by assessee for not depositing the deducted TDS.

5.

We have considered the contentions of Revenue and perused the material available on record. We have noticed that before the AO, the assessee had admitted that amount of TDS deducted but still outstanding for payment to the Revenue. Despite giving opportunity the assessee not provided the information call for to determine the tax liability for various years. The assessee raised objection before the appellate authority regarding the working out of the liability. But no explanation about its objection or any evidence to substantiate his contention was filed despite providing opportunities. However still, Ld. CIT(A) directed the AO to verify the objection raised by assessee in the light of books of account maintained by assessee, and reduce the amount of TDS as well as interest to that extent. Though we do not find any merit in the ground of appeal

raised by assessee. However, keeping in view the Principle of Natural Justice, the assessee is further allowed to file the record of the persons who have paid the tax in their return of income in respect of the payment made by assessee. The AO after examining all the record so produced by assessee, after due verification reduce the liability of assessee accordingly. With these observations, the appeal of the assessee is disposed of.

6. In Appeal No. 2052/Mum/2013, the identical issues are raised and the fact of the case is identical to the AO, hence, this appeal is also disposed with this similar direction.

7. In the result, both the appeals filed by assessee are allowed for statistical purposes. Order pronounced in the open court on this 24th June, 2016.

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