Municipal Commissioner, Mahabubnagar ... vs Department Of Income Tax
- CitationITA.No.230, 231, 232 & 233/Hyd/2014
Ratio decidendi
The rule this decision rests on
The Tribunal, in a miscellaneous application for rectification under the Income Tax Act, holds that a mistake apparent from the record exists in its earlier order where it stated that the deductor would not be treated as an assessee in default under section 201 if the payee has declared the income and paid tax thereon; a deductee's payment of tax absolves the deductor only from liability under section 201(1), and does not absolve the deductor from liability to interest under section 201(1A) until the date the tax is paid by the deductee.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The Income Tax Officer Municipal Commissioner (TDS), Ward-2(1) vs. Mahabubnagar Municipality Hyderabad. Mahabubnagar PAN AAALM1364M (Applicant) (Respondent)
For Revenue : Mr. Ramakrishna Bandi For Assessee : Mr. P. Raviseshagiri Rao
Date of Hearing 22.05.2015 Date of Pronouncement 10.06.2015
ORDER
PER SMT. ASHA VIJAYARAGHAVAN, J.M.
By these M.As. the Revenue seeks for rectification of the common Order of the Tribunal dated 18.09.2014 in so far as it relates to the appeals of the assessee, being I.T.A.No.230 to 233/Hyd/2014 for A.Ys. 2006-07 to 2009-10. The Revenue in its miscellaneous petitions submits as under.
2. Brief facts are that in the order of the ITAT, the appeals of the assessees are allowed by the ITAT for all four assessment years. In the present cases, a TDS survey was conducted in the premises of the assessee on 16.02.2009 and it was found that TDS was not deducted on contract payment, rent and on professional charges. Accordingly, the TDS assessments were completed on 23.03.2011 for the A.Ys.
2 MA.57 to 60/H/2015 in ITA.233/H/2014 Municipal Commissioner, Mahabubnagar Municipality, Mahabubnagar.
2006-07 to 2009-2010. Aggrieved by the order, the assessee preferred appeals before the CIT(A) and the CIT(A) held that payments made to advertising agencies are clearly held liable to TDS and directed the A.O. to compute the TDS liability if the amount exceeds the threshold limit for that particular assessment year. The assessee preferred appeals before the ITAT aggrieved by the decision of the CIT(A). In para 13 of its order dated 18.09.2014 in I.T.A.No.230 to 233/Hyd/2014, the Tribunal has observed as under :
"Hence, we remit the matter to the A.O. to verify as to whether the payee has declared the respective income and paid tax thereon and if so, the assessee shall not be held as 'the assessee in default' for the purpose of invoking provisions of section 201 and 201A. Further, from the details at para 6.3 produced at page 6 of the CIT(A) order, we find from the payments made towards advertisement the following do not exceed Rs.20,000."
3. By these M.As. the Revenue pointed out that the observation of Tribunal at para-13 directing the A.O. not to treat the assessee in default for the purpose of section 201(1A), if the payee has declared the respective income, is not in line with the decision of Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd., vs. CIT (2007) 293 ITR 226 (SC). Hence, for A.Ys. 2006-07 to 2009-2010 the M.As. are submitted for correcting the above para 13 as payment of taxes by the deductee will only absolve the deductor from the provisions of section 201(1) and not from provisions of section 201(1A).
4. We have heard the parties and perused the material available on record. We find that a mistake has occurred in the order of Tribunal dated 18.09.2014 in 3 MA.57 to 60/H/2015 in ITA.233/H/2014 Municipal Commissioner, Mahabubnagar Municipality, Mahabubnagar.
I.T.A.No.230 to 233/Hyd/2014 and we replace para No.13 which shall read as follows :
13. Hence, we remit the matter to the Assessing Officer to verify as to whether the payee has declared the respective income and paid tax thereon and if so, the assessee shall not be held as "the assessee in default" for the purpose of invoking provisions of section 201(1).
However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee. Further, from the details at para 6.3 produced at page 6 of the CIT(A) order, we find from the payments made towards advertisement the following do not exceed Rs.20,000.
Sl. Name 2006-07 2007-08 2008-09 2009-10 No 1 Praja shakthi 14960
2. Deccan Advt 10000 14400
3. Siyasath 16476
4. Mahaboomi 3000 18000
5. Mahabubnagar Times 6000
6. Rehaman Deccan 10580
7. Vartha 4000
8. Sahara India 5000
9. Kasturi 10000
5. In the result, M.As. of the Revenue are allowed.
Order pronounced in the open Court on 10.06.2015.
Sd/- Sd/- (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated 10th June, 2015
VBP/- Copy to
1. The Income Tax Officer, Ward 2(1), Hyderabad
2. The Municipal Commissioner, Mahabubnagar Municipality, Mahabubnagar.
3. CIT(A)-II, Hyderabad
4. CIT-(TDS), Hyderabad
5. D.R. "A" Bench, ITAT, Hyderabad.
6. Guard File.
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