CONSERVATOR OF FOREST AND FIELD DIRECTOR, TIGER PROJECT SARISKA (LOCAL AUTHORITY) ,SARISKA, ALWAR vs. INCOME TAX OFFICER ( TDS), MOTI DUNGARI ALWAR

assessee’s application for condonation of delay stating that

232 days delay is not considerable as genuine and the

3 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) reasons is Cobble up to show the genuine reasons against

the lapses on the part of the assessee. The ld. DR also

pointed out that the assessee is in the second round of

litigation and therefore, considering that aspect of the matter,

the delay is not properly justified by the assessee. But since

the assessee is one of the government agencies bench may

take appropriate view in the matter as deem fit in the interest

of justice.

perused the materials available on record. The prayer by the

assessee for condonation of delay of 232 days ( 5 months

and 12 days ) because the assessee is a government

department and before raising the appeal has to take

financial as well as administrative approval of higher

authority. The order has been passed on 29.09.2022 and the

effect of the covid 19 was becoming normal. The reasons

advanced are sufficient to condone the delay and the

assessee has the follow up in the form of the office order to

support the contention raised in the condonation petition.

Thus, the delay of 232 days in filing the present appeal by

the assessee is condoned in view of the decision of Hon’ble

4 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

Supreme Court in the case of Collector, land Acquisition vs.

Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is

prevented by sufficient cause and therefore, we admit this

appeal.

further, the ld. AR submitted that the matter pertaining to

Conservator of Forest and Field Director, Tiger Project

Sariska in ITA no. 450/JPR/2023 may be taken as a lead

case for discussions as the issues involved in the lead case

are common and inextricably interlinked or in fact interwoven

and the facts and circumstances of other cases are identical

except the difference in the amount in other assessment

year. The ld. DR did not raise any specific objection against

taking that case as a lead case. Therefore, for the purpose of

the present discussions, the case of ITA No. 450/JPR/2023

is taken as a lead case.

assailed the appeal in on the following grounds;

“1. That the Ld. Commissioner of Income Tax (Appeals) erred in law as well as on facts and in the circumstances of the case while confirming the following demand for non-deduction of TDS under

5 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

section 194 (C) on payment made to Eco Development Committee (EDC) and passed the impugned order under sections 201 (1) and 201(1A).

Order passed under Section AY Total Demand 201(1)/201(1A) read with 2016-17 54,77,400/- Section 254

deductor is State Government i.e. Conservator of Forest & Field

Director, Tiger Project, Sariska, Alwar in the spot verification u/s

6 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) 133A(2A) was conducted on 18.11.2015 and required details were

called for. After verification of details filed, the original order u/s

201(1)/201(1A) was passed on 06.06.2018 determining the total

tax liability including interest of Rs. 44,43,240/- for year under

consideration i.e. F.Y 2015-16.

7.1 During the course of verification it was found that the

payments are being made for civil construction work relating to

environmental development, forestation, forest development, buffer

area development etc. through Eco Development Committees

(hereinafter referred as EDCs). The EDCs are the bodies

registered with the forest department and are mainly constituted of

local villagers and with one representative of Forest Department.

The work completed through the EDCs includes construction and

maintenance of roads, anicuts and enclosures etc. No TDS is

being made on such payments made to various EDCs.

7.2 During the course of original assessment proceedings, the

assessee deductor was asked to provide details of payments

made to various EDC’s during the financial year 2015-16 along

with details of PAN of such EDCs. The assessee deductor

7 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) provided a list of EDCs to whom the payments were made during

the F.Y 2015-16 for conducting the above nature works. As per the

details submitted, name of the payee, payments made to each

EDCs and their PAN were not provided. It was gathered during

spot verification that the EDCs do not have any PAN. The

assessee deductor vide its letter No. 2229 dated 06.03.2018

submitted details of payment made to various EDCs. The

assessee deductor was asked to furnish reasons for non-deduction

of TDS on above payments. On perusal of the reply of assessee

deductor, it is revealed that the Eco Development Committee has

been constituted with the aim to conduct the development works in

the reserve areas with active local participation of the villagers and

to create job opportunities among them. It also submitted that the

above EDCs has been exempted from the category of ‘Contractor’

vide Rajasthan State Government’s order dated 24.10.2002 and

accordingly no TDS was made from the payments made to such

EDCs. The assessee deductor has made total payments of

Rs.1,66,65,050/- to various EDCs registered with Forest

Department for carrying out development works of the nature of

civil construction in reserve areas but have not deducted TDS on

such payments. As the assessee deductor has made total

8 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) payment of Rs.1,66,48,515/- (Rs. 16665050 – 16535) to various

EDCs during the F.Y 2015-16 on which the TDS was to be

deducted @ 20% but no TDS has been deducted, therefore, the

TDS liability of Rs. 33,29,700/- was calculated by the then AO. As

the assessee deductor has made non-deduction of income-tax of

Rs. 33,29,700/- from the above payments made during the F.Y

2015-16. The interest u/s 201(1A) worked out at Rs. 11,13,540/-

on the above amount of short deduction assuming the entire

payment has been made in equal monthly basis for the entire

financial year as no details regarding date of payments have been

provided by the assessee deductor. Thus, the then AO determined

total tax liability including interest of Rs. 44,43,240/- for the F.Y

2015-16.

preferred appeal before the ld. CIT(A), Alwar.

8.1 The appeal filed by the assessee before ld. CIT(A) has been

dismissed. Subsequent to that aggrieved by the said order, the

assessee preferred an appeal before ITAT, Jaipur wherein ITAT,

Jaipur Bench restore back the matter to file of the AO vide order

9 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

dated 03.10.2019 in compliance to the said order, the assessee

has filed the required information but the ld. AO has raised the

similar demand of Rs. 33,29,700/- + interest to the interest till date

of the date of second round order for an amount of Rs. 21,17,695/-

thereby as against the original demand of Rs. 44,43,240/- the fresh

demand of Rs. 54,77,395/- was raised against the assessee.

second round of litigation, assessee preferred an appeal before the

ld. CIT(A) who has dismissed, the appeal of the assessee holding

as under:-

“23. I have considered the order of the AO, written submissions of the appellant, facts of the case and material on record. With reference to Hon’ble ITAT’s direction vide its order in ITA Nos. 554, 555, 760, 761, 762, 763, 764, 765/JP/2019 dated 03.10.2019, the case was restored to the file of the AO. In view of direction of the Hon’ble ITAT, the AO examined the submissions made by the appellant and reaffirmed the original assessment order. The documents listed in paper book relating to budget allocation for forest work, bills of work done through EDCs bank statements, proceedings of EDC's meetings, application of EDC registration, etc. were cited to prove that work done through EDC is not contractual obligation but an arrangement as per decision of the State Forest Department, which was in turn to fulfill the aims and objectives under the 'National Forest Policy 1988' of Government of India. 24. The appellant through its submissions, has claimed that the work done by EDCs is not deemed to fall under Contractor category as the payments made to the villagers for the work done does not fall under income category and that the work done by EDCs was not civil work but miscellaneous work like environment protection, ECO restoration and there was no profit motive. The case law cited by the appellant of Jal Grahan Vikas Committee vs. State of Rajasthan (2003) has

10 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

different set of facts and in the case of the appellant, financial transactions were involved attractive appropriate Acts in force including the Income Tax Act, 1961 and moreover, an entity, the EDC had its own bank accounts However, it is observed that the EDCs were paid as per BSR rates similar to a contractor. Further, the appellant could not prove that EDCs were covered u/s 10(20) of the Income Tax Act, 196 or that it is under the category of a panchayat or a municipality as per the spirit of Article, 243 of the Indian Constitution. Even if EDC involves a social cause, it also cannot be denied that there is no financial profit or incentive and if the payment of financial work exceeds, the prescribed limit the payee entity has to comply with law. The AO found that Para 12 of the order dated 24.10.2002 provides details of profits awardable to the EDCs in lieu of the work done by them. Further, Para 12(A)(1) clearly enumerates that contract of collection of certain forest products will be awarded to the members of the EDCs. Thus, the AO noted that the EDCs as well as its members are deriving profit from activities of EDCs. 24.1 Wherever payment above threshold limit for deducting tax is involved for any contract or sub-contract, responsibility of deductor and deductee arises for statutory obligation of deducting tax. A law enacted by the parliament even unintentionally cannot be bypassed by any state directive. 24.2 In case of these EDCs, the banks have also deducted TDS u/s 192A. 24.3 The EDCs have not objected either before the bank or the Income Tax Department against TDS made and the EDCs are not covered u / s 10(2) of the Income Tax Act. Moreover, in subsequent years, the appellant has started deducting tax on such payment to EDCs. In view of above detailed observation, it is held that based on spot verification u / s 133A(2A), the AO rightly invoked liability of the appellant deductor u/s 201(1) and computed the interest liability u/s 201(1A) of the Act. The same is hereby confirmed subject to recomputation by the AO based on exact date of payment to EDCs instead of taking payments on monthly average basis. Hence, this ground raised by the appellant is dismissed.” 10. As the appeal of the assessee was dismissed without any

favour, the assessee preferred this appeal on the ground has

raised and reiterated hereinabove. All the grounds are

interconnected challenging the levy of TDS(+) interest thereon.

11 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

The ld. AR of the assessee relied upon the submission made

before ld. CIT(A) and the same is reproduced herein below for the

sake of brevity:

“1. That the Honorable ITAT Jaipur Bench in his order directed to AO verify the documents in paper book serial no. 3,4,5,6 and 10 to 13 and also to pass afresh assessment order providing adequate opportunity of being hear to the assessee.

A. In serial no.3 copy of budget allocation for forest work are enclosed. B. In serial no.4 copy of bill of work done through EDC's are enclosed C. In serial no. 5 copy of bank statements are enclosed. D. In serial no.6 copy of proceeding of EDC's meeting are enclosed E. In serial no. 10 copy of application of EDC's registration and copy of registration are enclosed. F. In serial no.11 copy of format for preparation of village relocation plan are enclosed. E TAX DEPART G. In serial no. 12 copy of compensation and community work for relocation packages are enclosed. H. In serial no. 13 copy of guideline of NTCA 2011 in enclosed.

12 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

1.In the present case the main issue are that whether the EDC's are contractor as per Sec. 194C of the IT Act and whether payment to them are receipts and income in their hand for that we want to bring the correct facts and modus operandi of the same as under.

1.1 The Appellant assesse "Conservator of Forest & Field Director" came into being as a policy decision of Forest Department Ministry of Forest, Goverment of Rajasthan, Jaipur since 17.10.2000 framed in accordance with National Forest Policy, 1988. The policy envisages as under

13 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

g) To seek vacation of forest area occupied by villages and rehabilitate them either by providing land in exchange of land so vacated or award compensation to them. h) To preserve and maintain natural heritage of forest area under control. i) To preserve and maintain botanical and biological environment in the forest area under control. j) To prevent spread of sand dunes in the forest area under control. k) To develop large scale forestation in the barren land in the forest area under control.

1) To meet the need of villages and Adiwasis in terms of providing them small produce, fodder, wood etc., for their kitchen camp fire use.

1.2 In order of achieve the aforesaid aims and objectives, it was considered, that only the Government forest Department would not be able to do so. Hence it was decided by the State Govt. Forest Department to constitute a ECO DEVELOPMENT COMMITTES (E.D.C.)in all the related area's with the active participation and cooperation of the villages of those areas. And for that the Raj State Govt. In her order dated 24.10.2002 in para 8.9 stated that "Related Deputy Conservator of forest will make plan of every year to execute the work of that reserve area through the EDC's and according the geographical condition of EDC'S through them will do the Eco Development work. The work done by EDC's for those work EDC's shall not be deemed in the category of contractor. The appellant assesses is being an Govt. Department and the order of the Govt. Is binding upon him and the appellant has to honor that order of the State Govt. Therefore, the EDC is not contractor within the meaning of section 194-c of the Income Tax, 1961 and as consequence not liable to deduct any amount of income-tax at source while meeting the expenditure incurred in achieving the sain aims and objectives. We also Clarify that the order of State Govt. Has been given following the "National Forest Policy 1988" by Govt. of India.

Further the them "Contract or Contractor "have not been defined in Income Tax Act, 1961. However, Dictionary meaning of "Contract" as per Law Dictionary (page 169- 170) is as under:

"CONTRACT: A Contract is agreement made between two or more persons which in intended to be enforceable at law, and is constituted by the acceptance by one party of an offer made to him by the other party to do or to abstain from doing some act The offer and acceptance may be either express or inferred by implication from the conduct of the parties, Halsbury's Laws of England, 3rd. Vol. 8p. 54.A contract is an agreement between competent parties, upon a lawful consideration, to do or to abstain from doing some act which is binding. The making of one contract may itself be consideration which binds another party to

14 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

an antecedent promise, so that the latter becomes a collateral contract is one which has been wholly performent by one of the parties, but remains to be done under it by both parties. Halsbury's Laws of England, 3rd Vol. 8p. 55. An agreement which is enforceable by law the option of one or more of the parties thereto but not at the option of the other or others, is a voidable contract, Indian Contract Act, 1972cos 2m . A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable Indian Contract Act, 1872, sec.2(0).

All agreement are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Indian Contract Act, 1872 sec. 10."

As per above there is no contract between the appellant and EDC's The EDC's cannot challenge or question of any action or work of the Appellant, therefore there is no enforceable contract binding on both the parties.

1.3 The modus operandi of the EDC's and how it works is given in Chapter 2 at page 8-9 of Book issued by the Forest Department by the Govt. Of Raj. On the Book Heading Joint Forest Management and its Implementation and Guideline and the id AO has already taken the cognizance of the same. The book was first published in the year 2002 and in a series 4th Edition in 2015 The book contain 17 chapters and 13 Annexure (Format) Edition in 2015 T

The book outlines plans and policies and how to manage and implement the aims and objectives. The book specifically provide that activities and works carried by the EDC's would not come under the category of contractor (Bokklet page 150 apra 8.8 and 8.9). 1.5 As per the same the payment made to the villages for above works through the EDC's are not the income and receipts in the hands of the EDC's. The distribution of payment to the villages has been made under the superintendence. control and direction of the Appellant assessee. The appellant assessee receives the budget from the Govt. And central Govt. According annual plan proposed by the forest Deportment for reictted works, which it done through the EDC's and when the works ore completed, the bills of those works are given by the EDC's to the Appellant and after verification of work, by the president of EDC. forester (Secretary), vide specimen bill, the payment is transferred to the Bank account of EDC's, thereafter EDC's mode Payment to the labouers/villagers etc., after the signature of manogement committee of EDC's. If when the payment made to EDC's Ore neither the income nor receipts in the hands of the EDC's then how it is Can be said that the same is subjected to obligation of TDS. Thus the EDC's is the like a self help group of villagers registered with the Appellant. 1.6As per the terms. conditions and stipulations contained in para 8.3 and 8.4

15 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

appearing on page 150 of the booklet, the appellant is not empowered and authorized to award any nature of contract to the EDC persons. Thus the appellant has been debarred in exercising any power to award any contract in the capacity as a contractor. There is nothing on record and finding to suggest that the appellant has awarded any contract in the capacity of contactor. There is no case on record and fining that the authorized person of the appellant has contravened any stipulations and subjected to any punishment under the service rules applicable on him.

1.7 There is no finding on record that EDC's has entered in to contract with any person residing in the forest area under control. Hence non deduction of TDS is not to be held a default on the part of assessee.

1.8 Further if a Govt. Department has worked as per the order of the Govt and in the bona-fide belief of TDS has not been deducted, the same should not be treated or deemed a default.

4.Receipts by the EDC's have not been Taxed: Further it is very important to note that if the EDC's are the contractor and separate assessee, then why the revenue has not given any notice to those EDC's to tax them when as per the Revenue they are getting such huge receipts from the Appellant. It shows that the Revenue itself admit the version of the assessee which support our contention.

16 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

work done relevant forest area payable for any work relating done by villages/labours ore given by the assessee through the EDC's. EDC's are only a mediator between the assessee and the villagers. Because the EDC's is a group of villagers and they are well accustomed with the persons of its area and know how the work to be executed from villages.

In the case of CIT vs. Common Effluent Treatment Plant (Thane Belapur) Association (2010) 328 ITR 0362 (Born) where it has That "The principle of mutuality postulates that all the contricutors to the common fund must be entitled to participate in the surplus and that all the participators in the surplus are contricutors to the common fund. It is in this sense that the law postulates that there must be a complete identity between the contributors and the participators. The essence of the doctrine of mutuality lies in the principle that what is returned is what is contributed by a member. A person cannot trade with himself. It is on this hypothesis that the income which falls within the purview of the doctrine of mutuality is exempt from taxation. (Para 7)

There can be no manner of doubt that the surplus generated by the assessee representing the excess of its income over expenditure would

17 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

fall within the purview of the doctrine of mutuality. The income of the assessee is contributed by its members. The assessee has been formed specifically with the object of providing a common effluent facility to its members. The income is not generated out of dealings with any third party. The entire contribution originates in its members and is expended only in furtherance of the objects of the association, for the benefit of the members. On these facts, both the OT(A) and the Tribunal were justified in coming to the conclusion that the surplus so generated falls within the purview of the doctrine of mutuality and was not exigible to tox-Chelmsford Club vs. CIT (2000) 159 CTR (SC) 235 (2000) 243 1TR 89 (SC) relied on. (Para 10)

The same principal is applicable here. Thus one cannot earn profits from himself nor can give any contract to itself Branch or unit made temporary for a short period. And covered under this principle of mutuality.

As EDC's are instrumentality of local self-government Gram Sabha/ Panchayats therefore are exergot entities under section 10(20) of the Income-tax Act. Further the ED C^ prime prime S are purely and pristinely covered by principles and concept of mutuality and therefore there receipts or income cannot be brought to tax under the Income Tax Act. These are constituted under the statutory mandate and order of the government and not constituted by the villagers in order to carry out any venture in the nature of trade collectively so as to christen EDC's as AOP under the Income-tax Act. Therefore the provisions of TDS do not get attracted to these payments.

9.1 Further That para 4 of the Notional Forest Policy-1988 covers "Strategy" and para 4.6 deals with "Tribal people and forests" which reads as "Having regard to the symbiotic relationship between the tribal people and forests, a primary task of all agencies responsible for forest management, including the forest development corporations should be to associate the tribal people closely in the protection, regeneration and development of forests as well as to provide gainful employment to people living in and around the forest. While safeguarding the customary rights and interests of such people, forestry programmes should pay special attention to the following:

9.2.1 One of the major causes for degradation of forest is illegal cutting and removal by persons. In order to put an end to this practice, such Persons should be replaced by institutions such as tribal cooperatives, labour cooperatives, government corporations, etc. as early as possible. भूलो द�ड

9.2.2 Protections, regeneration and optimum collection of minor forest produce along with institution arrangements for the marketing of such produce

18 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

9.2.3 Development of forest villages on par with revenue villages; Family oriented schemes for improving the status of the tribal beneficiaries; and

9.2.4 Undertaking integrated area development programmes to meet the needs of the tribal economy in and around the forest areas, including the provision of alternative sources of domestic energy on a subsidized basis, to reduce pressure on the existing forest areas."

9.2.5 That similar nature and objectives echoes in the Rajasthan State Forest Policy- 2010. A state where area under forest is around 9% of its total geographical area which is much below the national average of 23- 33% of forestation is a critical requirement so also is the dependence of tribal communities on the forest produce for their very survival and hence to assimilate the two divergent objectives participation of these communities into forest policy objectives would meet their economic objectives and also act as catalyst for attaining forest policy objectives.

9.2.6. That the overview of forest policy and interplay of tribal community needs and enhancing the forest cover in the State has been given to bring home the point that EDC's are the groups from the families of tribal community or villagers created under the policy to engage every family into forest development program of the government. These EDC's are created under statutory policy under the aegis of the government and are not Association of Persons getting together with common objective to carry out a business venture or activity to collectively eam profits.

9.2.7. Further it is very important to note that the sums paid to the individuals engaged in the forest development programs through these EDC's are at the BSR issued by the government from time to time. These EDC's are only medium or channel of routing payments to the individuals and in the process they are not left with any surplus arising out of these sums.

9.2.8.However both the lower authorities failed to capture these essential ingredients of social welfare and community development which is the real essence and not engaging these EDC's as contractors or an agency to get the work done on commercial contract basis. DEPA

9.2.9. Thus the Id. AO has wrongly and without considering the above facts nature, position of law, even showing the basic ingredients of an AOP in constitution of these EDC's deemed contractor.

9.2.10. That an order dated 17.10.2000 came to be issued by the Forest Department of the Government of Rajasthan outlining the plan

19 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

to reforesting the barren and treeless forest areas with the participation/ partnership of villagers and voluntary organizations. Copy of the order dated 17.10.2000 is enclosed (PB73-79). The order in its preface itself records that joint forest management directions is based on the premise that villagers are always forthcoming for conservation & management of forest land and forests as their survival and self reliance is benefited out of the same. It further records that government should be readily accepting not only EDC's but also to any other NGO etc who wish to contribute to this cause without any motive of profit so that this effort becomes a comprehensive public movement. Para 8.8 of the order dated 17.10.2000 amended by order doted 24.10.2002 categorically provides that for the works done by EDC's they shall not be considered as contractors. And the aim of the Govt. is also to abolish the custom of contractor ship.

9.2.11.The order dated 17.10.2000 amended by order dated 24.10.2002 has prescribed the procedure and format for constitution and registration of EDC's and a copy of model form is enclosed(PB96- 99). A bare perusal of the form would show that EDC's is constituted for a reserved village and it is the Gram Sabha which executes the constitution with representation of women, SC, ST and other constituents. In substance the EDC's is an arm of the Gram Sabha. As per Article 243(b) of the Constitution of India, 1950, "Gram Sabha" is a body consisting of persons registered in the electoral rolls relating to a village comprised within the area of Panchayat at the village level. Article 243-A of the Constitution of India enshrines the powers of Gram Sabha and the Article reads as "A Gram Sabha may exercise such powers and perform such functions at the village level as the Legislature of - may, a Statemuy by law, provide." In view of the above the EDC's consists of Eititizens at village level who constitute the Gram Sabha and Panchayat and therefore are covered by the expression "local authority" as defined vide Explanation to section 10(20) of the Income-tax Act. For this useful reference may be made to observations of the Hon'ble Supreme Court in the case of Orissa Mining Corporation Ltd Vs. Ministry of Environment & Forest reported at [2013] 6 SCC 476; 2013 Supp AIR SC 191; Para 32, 33, 36

9.2.12. That it is pertinent lo note that for all the works done for Forest management the State government has prescribed a Basic Schedule of Rates [BSR] to be paid to every unskilled worker on the basis of nature of work done by that individual. The total amount payable on the basis of works done is paid to the EDC's concerned and the entire amount, in turn, is being paid by the EDC's to the individual villager. Thus there is no surplus or residue or profit remaining to tthe EDC's.

9.2.13. That the Hon' ble Rajasthan High Court in the case of Jal Grahan Vikas Committee vs State of Rajasthan reported at [2003] 2 RLW (Raj) 742 where the question was as to separate juristic identity

20 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

of a committee constituted by Gram Sabha was involved. The Hon' ble Court held that a petition by a committee Constituted by Gram Sabha against gram panchayat is not maintainable as juristic personality is vested in gram panchayat and not in every limb or manifestation through which it discharges its function as a local authority, such functioning by such human agency does not cloth it with status of juristic person or a body corporate. It cannot sue and be sued in its own name. It cannot claim different status from the authority for whom it is functioning.” 11. The ld. AR in addition to the submission so made before ld.

CIT(A) also relied upon the CBDT circular No. 502 dated

27.01.1988. The ld. AR of the assessee also submitted that the

liability of TDS has been fixed upon the assessee @ 20%

considering that EDC’s are having any PAN. That information is

already on record as the assessee started compliance to avoid

unnecessary litigation. The ld. AR of the assessee submitted that

in almost all cases there are available PAN. Therefore, even if on

merit are not considered then the liability fasten in assessee

cannot be @ 20%. Therefore, even if this plea is considered the

demand will substantially reduce if these details are considered.

authorities and vehemently argued that the subsequent action of

the assessee taking PAN making compliance of TDS itself

demonstrate that the assessee for the year under consideration is

21 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) liable for TDS liability. The assessee in the second round has not

submitted the details of the payment made to each EDS date wise,

pan number of each EDCs., status of filling the return or the copy

of the account so as to establish that these EDCs are chargeable

to tax or not. Based on this aspect of the matter he supported the

order of lower authority.

placed on record. The bench noted that the assessee is in the

second round of litigation before us. But the is limited that whether

the assessee is liable to deduct the tax on the payments made to

these EDCs or not. The bench noted that in the year under

consideration in the second round of litigation the assessee has not

placed on record the details of the payment made to each EDCs.,

PAN number of the each EDCs (which we have been informed that

the EDCs have availed). The ld. AR of the assessee submitted that

these EDCs (Payees) are AOP and are known as Eco

Development Committees or Van Suraksha and Prabandh Samiti.

The work of these samiti include supply of labour and carrying out

of any such work which include defense of forest in their assigned

zone helping out forest department in re-planation of tree on waste

22 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) land, helping forest department in preparation of nursery and

providing work force for construction activities conducted by forest

department in their assigned zone. The ld. AR of the assessee also

submitted that there is specific ban on employment of contractors

for the execution of the work under the programme and thus it is

clear that such programmes are executed with the participation of

the people, panchayati raj and state government in conformity with

the central government and there is no contract between the village

committee, voluntary agencies and the state government which is

sine qua non for attracting the provision of section 194C of the Act

which has been decided without verifying all these aspect of the

case and the CBDT’s instructions no. 502 dated 27.01.1988 which

squarely covers the issue of the assessee. Alternatively it has been

also argued by the ld. AR of the assessee that all EDCs are just

taking the payment for reimbursement of expenses since the object

of all these EDCs/Samiti is to work on no profit no loss basis and

thus circular no. 715 dated 08.08.1995 will also apply and needs to

be dealt with. Considering that aspect of the matter the ld. AR of

the assessee also submitted that as per provision of section 206AA

read with section 139A of the Act and as per the article 14 of the

Constitution of India the facts are to be examined that whether the

23 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS)

deduction of tax at source requirement of PAN is mandatory?. To

this fact effect the bench noted that the Karnataka High Court in the

case of Smt. A Kowsalya Bai Vs UOI [ 208 taxmann.com 157 ]

decided that

“section 139A which is introduced way back in April 1991 is in vogue and this provision stands the scrutiny of article 14 of the constitution for reasonableness. But, section 206AA which is contrary to section 139A appears to be discriminatory as it is overriding section 139A introduced earlier. Though the intention of the legislature is to bring the maximum persons under the net of income tax when necessarily it provided for exemption upto taxable limit. It may not insist such persons whose income is below the taxable limit to compulsorily go for PAN. If any mischief of avoiding of tax or any other act of concealing the income is detected that could be taken care of by penal provisions. Accordingly, the case of the assessee of obtaining the PAN from

such EDCs who have no income or below the taxable income does

not arise. Based on this aspect of the case the ld. AR of the

assessee submitted that the ld. AO and that of the ld. CIT(A) has

not examined these facets and therefore, the matter is again

required to be set aside to the file of the ld. AO to deal with these

facets of the case and thereby to decide the issue as the assessee

has categorically submitted that there is no contract with the EDCs,

they are working with no profit no loss and their income are not

chargeable to tax and considering that aspect of the matter the ld.

AO be directed to relook all the aspect as argued and decide by

24 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) passing a speaking order the TDS liability if any or not. Based on

these observations we are of the considered view that the

assessee is deprived of justice on the issue as discussed and

argued by the ld. AR of the assessee. Based on these set of facts

we are inclined to accept the request of the ld. AR of the assessee

to set aside the case to the file of the ld. AO, so as to decide the

case of the assessee after giving proper opportunity of being heard

to the assessee. At the same time, the assessee is directed to

represent and present all the facts before the ld. AO and should not

ask for adjournment of trifles grounds. At this stage, we remand

back the matter without commenting upon the merits of the case

and ld. AO is directed to pass a speaking order in accordance with

law.

In the result, the appeal of the assessee in ITA no.

450/JPR/2023 is allowed for statistical purposes.

similar to the facts of the case in ITA No. 450/JP/2023 and we have

heard both the parties and persuaded the materials available on

record. The bench has noticed that the issues raised by the

assessee in appeal No. 466, 470 to 475/JP/2023 are equally

25 ITA Nos. 450/JP/2023 & others Conservator of Forest and Field Tiger Project Sariska vs. ITO(TDS) similar on set of facts and grounds. Therefore, it is not imperative to

repeat the facts and various grounds raised by the assessee.

Hence, the bench feels that the decision taken by us in ITA No.

450/JP/2023 for the Assessment Year 2016-17 shall apply mutatis

mutandis in ITA Nos. 466, 470 to 475/JP/2023. Based on these

observations the appeal of the assessee in ITA Nos. 466, 470 to

475/JP/2023 stands allowed for statistical purpose.

In the result, the appeals of the assessee are allowed for

statistical purpose.

Order pronounced in the open Court on 08/11/2023 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 08 /11/2023 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Conservator of Forest and Field Tiger Project Sariska, Alwar 2. izR;FkhZ@ The Respondent- ITO, TDS, Alwar 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File { ITA Nos. 450, 466, 470 to 475/JP/2023} 6. vkns'kkuqlkj@ By order सहायक पंजीकार@Aेेज. त्महपेजतंत