Ace Tours World Pvt.Ltd.,, Surat vs Assessee

सुनवाई क तार ख/ Date of Hea ring : 01 /01/201 5 घोषणा क तार ख /Date of P ronouncement: 16/01/2015

आदेश /O R D E R

PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER

This is an Appeal filed by the Assessee emanating from an order of the learned CIT-I, Surat, dated 10.12.2009. The only ground raised is reproduced below:

"1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income-Tax(Appeals) has erred in partly confirming the action of the Assessing Officer in imposing penalty u/s.271C of the IT Act on TDS to be deducted u/s.194C on vehicle hiring charges and TDS to be deducted u/s.192 on the directors remuneration account. The learned CIT(A) has confirmed the penalty on TDS to be deducted as above after removing the calculation mistake if any."

2. Vide an order u/s.271(1)(c) dated 29.02.2009 a penalty was imposed on the assessee of Rs.8,12,168/- on account of non deduction of TDS on payment made towards vehicle charges and payment of ITA No.529/Ahd/2010 M/s. Ace Tours Worldwide Pvt. Ltd. Vs. Jt. CIT, TDS Range, Surat.

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remuneration to the Directors. Facts of the case have revealed that a survey u/s.133A was conducted on the assessee and on verification it was found that on payment of "vehicle hiring charges" of Rs.24,77,387/- the assessee has not deducted the TDS. According to AO, the Assessee has committed a default u/s.194I of the Act. Secondly, it was also noted that no tax was deducted on payment of "Remuneration to Directors" of Rs.27,40,000/- as prescribed u/s.192 of IT Act. For these two defaults, the ITO (TDS) had passed an order u/s.201/201(1A) dated 16.02.2009. When the said order was challenged before learned CIT(A)-I, Surat then vide order dated 12.11.2009 (Appeal No.CAS-I/274 & 275/2008-09) an observation was made that in respect of vehicle hiring charges the provisions of Section 194C should be applicable and not the provisions of Section 194I was applicable; vide paragraph 3.3.1 it was directed as under:

"3.3.1 I have considered the submission made by the appellant and the observation of the A.O. Clearly the case of the assessee falls u/s.194C and not u/s.194I. The Circular cited is not applicable to travel agents providing taxi/car facilities to the customers. The bills copy furnished by the assessee clearly shows that the vehicles are arranged for customers on customer to customer basis. These vehicles are not taken on rent by the assessee and hence the provisions of Section 194-1 are not applicable but Section 194-C are clearly applicable as the assessee enters into a contract with the parties for supplying vehicles to the customers. The A.O. is, therefore, directed to recompute the liability for both the assessment years U/S.194C."

3. With this brief background, we have found that the appellant has moved an adjournment application which was rejected by us primarily on the ground that the issue being trifle in nature can be decided in the absence of learned AR but after hearing the learned Representative of the Revenue Department. We have proceeded accordingly. Learned Sr.D.R., Mr. Nimesh Yadav, supported the orders of the authorities below.

ITA No.529/Ahd/2010 M/s. Ace Tours Worldwide Pvt. Ltd. Vs. Jt. CIT, TDS Range, Surat.

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4. In our considered opinion, once the admitted factual position was that the penalty was initially initiated having considered the default of the assessee u/s.194I of IT Act; but later on by learned CIT(A) vide order dated 12.11.2009 (supra), while deciding the Appeal of an order passed u/s.201(i)/201(ia) of IT Act, held that the TDS was required to be deducted u/s.194C, then a question can be raised that whether the assessee is still punishable for a default which was found to be wrong and held that the default had fallen under an another section. Furthermore, an another question can also be raised that in a situation when certain doubts were about the default of the assessee then why such default be not considered under an exception prescribed u/s.273B of IT Act; which says that no penalty shall be imposable on assessee for any failure if he proves that there was reasonable cause for the said failure. Since, the learned Commissioner has not considered both these aspects while deciding this Appeal therefore in our considered opinion the matter is required to be restored back for denovo consideration; needless to mention; any other legal question can as well be decided.

4.1 We have also considered the other reason for levy of penalty which was a default for non deduction of TDS for remuneration to Directors. In this connection, an alternate argument before the lower authorities was that if the Respected Directors have paid the tax in their respective hands by filing the income tax return for the year under consideration, whether still the assessee was punishable for the said default? Since, this factual position has yet to be ascertained; therefore, this part of the order also required to be restored back to the file of learned CIT(A) to be decided according to the provisions of law. Side by ITA No.529/Ahd/2010 M/s. Ace Tours Worldwide Pvt. Ltd. Vs. Jt. CIT, TDS Range, Surat.

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side, we hereby direct the assessee to furnish all those evidences at an early date before learned CIT(A) so that this Appeal can be decided at an early date. Resultantly, the ground raised by the Assessee may be treated as allowed but for statistical purpose only.

5. In the result, since the matter has been restored back for denovo consideration to the file of learned CIT(A); therefore, this Appeal may be treated as allowed for statistical purpose only.

Sd/- Sd/- (ANIL CHATURVEDI) (MUKUL Kr. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 16/01/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT 4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad