V LINK FLEET SOLUTIONS P. LTD,MUMBAI vs. ITO TDS CIR 3(5), MUMBAI

This appeal by the assessee is directed against the order of the CIT(A)-16, Mumbai dated 04.04.2014 for A.Y. 2008-09 (24Q for Quarter 4).

1. The Ld. CIT (Appeals) erred in confirming the demand of Rs.31,58,160/- comprising short deduction of tax at source, non- payment of tax collected at source and interest thereon.

2. The Ld. CIT (Appeals) in dismissing the appeal did not appreciate that notice fixing the hearing of appeal on 06.03.2014 ought to have been forwarded to the appellant at changed address.

3. The Ld. CIT (Appeals) in any event ought to have given one more opportunity in the circumstances.”

4. In the present appeal, inspite of affording the assessee at least five opportunities, none was present on behalf of the assessee. Even issue of notice for hearing by RPAD did not elicit compliance from the assessee. Today, i.e. on 20.04.2016, when the case was called for hearing, none was present for the assessee but the learned D.R. for Revenue was present. In these circumstances, we are of the considered opinion that the assessee is not interested in pursuing the appeal seriously. As per the records, we find that even before the learned CIT(A) also none was present for the assessee in appellate proceedings. Further, even when on the assessee’s request copies of the appeal papers were made available to the assessee by the learned CIT(A), the assessee failed to avail the opportunity of hearing granted thereafter by the learned CIT(A). In these factual circumstances, we proceed to dispose off this appeal with the assistance of the learned D.R. for Revenue and the material on record.

5. Ground No. 1 5.1 In this ground, the assessee contends that the learned CIT(A) erred in confirming the demand of `31,58,160/- comprising of short deduction of tax at source, non-payment of tax collected at source and interest thereon.

M/s. V Link Fleet Solutions P. Ltd. 5.2 The learned D.R. supported the impugned order of the learned CIT(A), wherein the learned CIT(A) rendered the findings dismissing the assessee’s appeal after considering the AO’s order, the statement of facts filed by the assessee and other material on record. It is prayed that the assessee’s appeal on this issue be dismissed as the assessee has failed to bring on record any material evidence to controvert the findings of the AO.

5.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. The AO in his order under section 201(1)/201(1A) of the Act dated 08.01.2011 has adjudicated the matter as under: -

In this case quarterly TDS Return for Q1,Q2,Q3,Q4 for financial year 2007-08 was filed by the assessee in Form 24Q/26Q. These Returns were processed by the Department. On processing of said Return following default have been found u/s 201(1)/201(1A) of the Income Tax Act. 1961. Amount Short Total S. Form deducted/ Interest Quarter Deduction amount of No. No. collected but payable /Collection default not paid 1 24Q Q4 10270 1256530 5720 1272520 2 26Q Q1 11570 435770 7730 455070 3 26Q Q2 0 284970 15050 300020 4 26Q Q3 0 242850 2890 245740 5 26Q Q4 810 86700 15480 102990 Total Tax & Interest payable 2376340

The aforesaid defaults were communicated to the assessee vide Show Cause Notice dated 7.12.2010 requiring to file correction return if the default was due to error in data entry otherwise pay the amount of default. On verification, it appears that assessee has not corrected by filing "correction statement" with the Tax Information Network Facilitation Center (TIN-FC) in respect of the aforesaid default. I am, therefore inclined to infer that the assessee has committed default within the meaning of Sect 201(1) of I.T Act, 1961. In the light of above facts the Assessee is treated as defaulter within the meaning of Sect 201(1)/201(1A) for the defaults mentioned above. Accordingly, this order u/s. 201(1)/201(1A) computing the total amount of default as on date is computed at `31,58,160/- for 4th quarter of 24Q of the financial year 2007-08. Computation of the total amount of default is as under M/s. V Link Fleet Solutions P. Ltd.

Interest Interest on Amount Interest Short on short S. Form deducted/ payable till due Total Qtr. Deduction/ short payment No. No. collected but date to late default Collection deducti not paid Deposit of Tax on 1 24Q 4 10270 3590 2242950 895480 5870 3158160 5.3.2 The learned CIT(A) in the impugned order has held as under: -

“1.2 Nobody has represented this appeal. Notices for hearing as follows were issued to the appellant. Date fixed for hearing as per Date of issue of Remarks/ notice/as per Notice Compliance adjournment granted 23/12/2013 31/12/2013 None attended 19/02/2014 06/03/2014 None attended

Vide letter dated 07/03/2014, the appellant stated that they have misplaced the set of appeal papers as they have shifted their office and requested to provide them with Form No. 33, Statement of Facts, Grounds of Appeal and the Assessment Order against which appeal filed. The said documents were given to the appellant company and a final opportunity of hearing was granted to the appellant on 24/03/2014. However, on the appointed date none attended.

2. The Grounds of appeal: "Ground No.1 "1. On the facts and circumstances of the case and in law the Income Tax Officer (TDS)-3(5) ("AO") erred in treating the Appellant as assessee in default u/s. 201 (1)/201(1A) of the Income Tax Act, 1962 ("the Act") on the alleged ground that the Appellant had failed to make corrections in the quarterly e-TDS return for 24Q-4.

2. The ITO erred in treating the appellant to be in default u/s. 201/201 (1A) of the Income Tax Act, 1961.

3. The ITO has accordingly erred in raising a demand of `32,58,160/-.

4. The ITO in raising the demand as above did not pass any speaking order.

5. The ITO in any event did not allow any opportunity let alone reasonable opportunity to the appellant to prove its case. Your appellant therefore submits that the demand of `31,58,160/- be quashed pr a suitable relief be given.

M/s. V Link Fleet Solutions P. Ltd. Ground No. II Your Appellant craves leave to add, to alter and / or amend all or any of the foregoing grounds of appeal

." 2.1. In the Statement of Facts filed with the Appeal Memorandum, it is stated that the AO required the appellant to furnish the details of the payment for the financial year under appeal and also called upon to correct the said Returns which did not give the required particulars when such quarterly returns in 24Q-4 were filed. That the show cause notice issued by the AO was in a routine manner and did not specify the type of default or mismatch in data filed in the return of TDS. That the AO without having regard to the nature of enquiry and without affording any further opportunity has treated the appellant to be assessee in default for payment of taxes. 2.2 The appellant claims that no opportunity was provided by the AO, however it is noted that even in appeal proceedings, the appellant failed to file its submissions after being afforded ample opportunities. Since the appellant has not cared to file any details/submission in respect of the grounds taken, it is presumed that the appellant has nothing to state. Accordingly the AO's action is confirmed.” 5.3.3 Before us also the assessee has neither appeared for hearing nor brought on record any material evidence to controvert the findings of the authorities below (supra). In these circumstances of the case, as discussed above, we are constrained to uphold the order of the authorities below on this issue and consequently dismiss ground No. 1 raised by the assessee.

6. Ground No. 2 & 3 6.1 In ground No. 2, the assessee contends that the learned CIT(A) ought to have sent the notice fixing the hearing on 06.03.2014 to the assessee at its changed address. On an appreciation of the facts on record, we find that the assessee, vide letter dated 07.03.2014, had written to the learned CIT(A) asking for copies of Form No. 35, statement of facts, grounds of appeal and the order of assessment since the same were misplaced when shifting of the assessee’s office. The learned CIT(A) records that the same was given to the assessee. Obviously, since no one appeared before the learned CIT(A) in appellate proceedings, these details sought for would have been sent to the assessee by post at the address given by the assessee in its letter dated 07.03.2014. There is no material on record to suggest that the assessee had informed the learned CIT(A) of its change of M/s. V Link Fleet Solutions P. Ltd. address prior to its letter dated 07.03.2014. This ground No. 2 of the assessee, being bereft of any merit, is accordingly dismissed. 6.2 In ground No. 3, the assessee submits that in any event, the assessee ought to have been allowed one more opportunity of being heard. On a perusal of the impugned order at para 1.2 thereof, we find that in fact the learned CIT(A) has granted a further final opportunity of being heard in appellate proceedings before her on 24.03.2014. It is, recorded by the learned CIT(A) in this regard that on the appointed date none attended. In this factual matrix the assessee’s grievance that it ought to have been allowed one more opportunity of being heard has been met. Consequently, finding no merit in this ground No. 3 raised by the assessee, we dismiss the same.