TaxTMI 
TaxTMI 
2017 (9) TMI 579
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....ence. 2. The first issue to be decided in these appeals is as to whether the assessee could be treated as an assessee in default u/s 201 / 201(1A) of the Act in respect of payments released to Gujarat Enviro Protection and Infrastructure Limited [ in short GEPIL] , in the facts and circumstances of the case. 2.1. The brief facts of this issue is that a TDS survey u/s 133A of the Act was conducted in the office premises of assessee simultaneously at Durgapur as well as at Asansol on 12.10.2012. During the course of survey proceedings, it was found that the books of accounts from financial year 2009-10 onwards had not been audited and accounts were yet to be finalized. Number of documents were impounded bearing identification marks ADDA -01 to ADDA - 40 (impounded from Durgapur office) and ADDA-A-01 to ADDA-A-11 (impounded from Asansol office). The assessee submitted a quarter wise written submissions with regard to eligibility of deduction of tax at source and its remittances thereon for each of the expenses debited in its accounts vide its letters dated 20.12.2012 and 3.1.2013. From the same, the ld AO observed that in the fourth quarter of financial year 2009-10, the assesse....
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....pecific professional-cum-technological expertise for sustainable & better environment through Solid Waste Management in the area under its jurisdiction where the Nodal Agency had retained every possible control over the development and for the purpose of reduction of cost of the project it provided and initial contribution of Rs. 9.60 crores only on submission of progressive claim for expenditure incurred. In this fourth quarter of the F.Y. 2009-10, it made a payment of Rs. 2.60 crores towards the same. Further, in the AR's own submission, "Grants/ subsidies are always given to an organization having sufficient professional expertise otherwise proper utilization of grant is not feasible and that grant/initial contribution was provided by ADDA only to reduce the cost of waste management." So, to make the project feasible, the so-called grant/initial contribution was provided to M/s GEPIL with the sole purpose of rate reduction towards the cost of the project to such an entity having professional-cum-technological expertise in this kind of project. Further, as per Para 14.2.4 of the Bid Document, "The mobilization of finance for the execution of the project shall be the resp....
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....l raised by OTIS on 12.10.2009. Hence there is no error committed by the assessee in this regard. The ld AO however observed that the subject mentioned payments would fall under the ambit of provisions of section 194J of the Act on the total cost of Rs. 2,87,420/- in the first quarter of financial year 2009-10 and non-deduction of the same would make the assessee as an 'assessee in default' in terms of section 201(1) of the Act and would be invited with consequential interest u/s 201(1A) of the Act. 4. The next issue to be decided in these appeals is as to whether the assessee could be treated as an assessee in default u/s 201 / 201(1A) of the Act in respect of payments made to Durgapur Ex Servicemen Welfare Security in Asst Year 2011-12 , in the facts and circumstances of the case. 4.1. The brief facts of this issue is that the ld AO observed that in the first quarter of financial year 2010-11, the assessee made payment amounting to Rs. 9,03,541/- to Durgapur Ex Servicemen Welfare Security where no tax was deducted at source. The assessee stated that the said agency was having PAN but the same was mistakenly not quoted by the assessee in the TDS returns. The ld AO however co....
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....t shown this receipt from the assessee as a revenue receipt rather it had reflected the same under capital reserve. Hence this is not a case where the payee had paid its due taxes. He observed that GEPIL had performed on the basis of contract and therefore amount paid to them was revenue in nature in their hands and hence the assessee is obligated to deduct tax at source on the payments made to them. 5.1. Similarly for the other payments made by the assessee, the ld CITA confirmed the action of the ld AO by treating the assessee as 'assessee in default' u/s 201 / 201(1A) of the Act, without having any discussion or giving any finding thereon. 6. Aggrieved, the assessee is in appeal before us on the following grounds:- I.T.A. No. 279/Kol/2016 for assessment year 2010-11 A. For that the CIT(Appeals) has erred in confirming the finding of the Assessing Officer that in respect of the amount paid by the appellant to Gujrat Environment Protection and Infrastructure Limited (in short GEPIL) under the Concession Agreement dated December 23,2008, as and by way of disbursement of a part of the grant provided by the Government of West Bengal, Urban Development Department, Kolkata ....
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....PAN No. of Durgapur Ex Services Welfare Association tax is required to be deducted at source @ 20% in respect of payments made to the said Association and not @ 2% under Section 194C of the Act. D. For that the CIT(Appeals) has erred in holding that the Assessing Officer had rightly disallowed the amounts involved as per the provisions of Section 40(a)(ia) of the act. E. For that the CIT(Appeals) has erred in confirming the demand of interest by the Assessing Officer, there being no liability to deduct tax under Section 194J of the Act by the appellant in the instant case, contrary to what has been erroneously held by the Assessing Officer. 7. We have heard the rival submissions and perused the materials available on record. We find that for development of an Integrated Municipal Solid Waste Management for ULBs of Asansol, Durgapur, Ranigunj , Jamuria and Kulti Urban area on BOOT transfer basis, a Concession Agreement was entered into on 23.12.2008 between Durgapur Municipal Corporation, Asansol Municipal Corporation, Raniganj Municipality, Jamuria Municipality, Kulti Municipality and the asesseee, of the one part, with GEPIL. The Ministry of Environment and Forests, Gover....
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.... a Chairman and not more than thirteen but not less than seven other members to be appointed by the State Government. (4) The State Government may appoint a local authority or any other authority or Corporation (statutory or otherwise), or any officer of the State Government, as the Planning Authority or the Development Authority for the area within the jurisdiction of that authority. (5) The provisions of sub-section (3) of this section and sections 12, 14 and 15 shall not apply to a Planning Authority or a Development Authority appointed under sub-section (4) and the provisions of this Act by which such authority is constituted shall continue to apply in respect of the area within the jurisdiction of that authority. 7.1. We find that the assessee has been constituted under sub-section (1) of section 11 above vide Notification No. 1881/T&CP/1R-6/80 dated 17.3.1980 which is enclosed in page 3 of the second paper book. We find that the key officials of the assessee were appointed by the Government of West Bengal, Urban Development Department, Town & Country Planning Branch as evident from page 5 of the second paper book. We find that the grants are given to GEPIL through th....
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....ly as per the directions of the State Govt. represents diversion of income and the same cannot be credited. It was held that the amount so set apart as per the statutory obligation is not liable to tax in the hands of the assessee. The SLP of the department before the Hon'ble Supreme Court against the above decision was also dismissed vide (1992) 195 CTR (SC) 136. 7.4. We also find that the co-ordinate bench of Ahmedabad Tribunal in the case of The /Ahd/tant Geologist , Geology & Mining Dept. vs ITO TDS in ITA No. 810/Ahd/2010 for Asst Year 2008-09 dated 10.7.2013 had addressed a similar issue. The facts before the Ahmedabad Tribunal was that the assessee in that case had paid Rs. 6,93,16,000/- to Gujarat Mineral Development Corporation (GMDC) and Gujarat Mineral Research & Development Society (GMRDS) for construction of Marble Park for Artisans and using of mineral without deducting tax at source u/s 194C of the Act. A show cause notice was isused to that assessee to explain as to why demand may not be raised u/s 201(1) and interest may not be charged for the above default u/s 201(1A) of the Act. The assessee in that case replied that since the amounts paid to the aforesaid par....
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....the file of the ld AO for adjudication afresh, in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard in this regard. Accordingly, the ground raised in this regard by the assessee is allowed for statistical purposes. 9. With regard to the interest liability of Rs. 77,593/- which has been enhanced by the ld AO, the ld AR stated that the assessee had deposited the admitted tax of Rs. 6,70,224/- and the same was duly communicated to the ld AO vide letter dated 3.1.2013 (enclosed in paper book). Here also this additional interest liability has been fastened on the assessee by the ld AO without any speaking order. Hence in the interest of justice and fairplay, we deem it fit and appropriate, to remand this issue to the file of the ld AO for adjudication afresh, in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard in this regard. Accordingly, the ground raised in this regard by the assessee is allowed for statistical purposes. 10. With regard to the payment amounting to Rs. 9,03,541/- made by the assessee to Durgpaur Ex-Services Welfare Association in the first quarter of F....