TMI Blog2012 (8) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed subsequently in the hands of one of the constituents of the assessee-Consortiums and to avoid double tax, the said amounts were never taxed in the hands of the assessee - consortium. This is a relevant fact that the CIT(A) should have considered, while deciding as to why one must make TDS, when the JV - assessee are created to procure a contract and never to execute the same by themselves with the intention to earn income - the objection raised by the Learned Departmental Representative about the requirement of fresh adjudication on the said issue relating to liability to make TDS under S.201(1) is required to be approved - matter is restored to the file of the first appellate authority for fresh adjudication - in favour of assessee for statistical purposes. - 63/Hyd/2012 64/Hyd/2012 65/Hyd/2012 - - - Dated:- 30-5-2012 - SHRI D.KARUNAKARA RAO, SHRI SAKTIJIT DEY, JJ. Appellants by : Shri K.C.Devadas CA Respondent by : Shri V.Srinivas, CIT-DR O R D E R Per D.Karunakara Rao, Accountant Member: There are fourteen appeals in all in this bunch. They are all filed by the assessees against separate orders of the Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises. It was therefore pleaded that the interest under S.201(1A) be deleted. The CIT(A) did not find merit in the contentions of the assessee. He observed that the fact that the assessee has been deducting the taxes regularly and the JV partners have been claiming credit for the TDS made, shows that the assessee has admitted its liability to deduct tax and once there is liability to deduct tax, failure to do so would attract under S.201(1A) of the Act. Further observing that charging of interest under S.201(1A) of the Act is mandatory, relying on the circular of the CBDT being Circular No.8 of 2009 dated 24th Novemebr,2009 (2009)319 ITR(St) 0022), which according to him is in line with the decision of the Hon ble Supreme Court in the case of Hindustan Coca Cola Beverages P. Ltd. V/s. CIT(2007) 293 ITR 0226, confirmed the interest charged by the assessing officer under S.201(1A) of the Act. 4. Aggrieved by the order of the CIT(A), assessee preferred the present appeal before us. 5. In all the remaining thirteen cases in thus bunch, though the assessees are different and represent different consortium, but for the amounts involved and the works executed for the Government, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... getting the contracts and accordingly contract itself was received and the same was transferred to one of the constituents, who executed the contract work in full and paid taxes on the income earned by that assessee. Absence of written agreement to support such transfer of contract shall not be a decisive and relevant factor. Learned Authorised Representative for the assessees reasoned that the assessees shall not be made to effect TDS on the sum, which is not an income to the assessees. There is no liability to make TDS on the said sum. Further, on the issue of existence of liability to make TDS under S.201(1) of the Act, learned counsel argued stating that the assessee is not liable to make any TDS, since, after procuring the contract, the impugned contract and the amounts received were transferred entirely and undisputedly to its constituent for performance. The said constituent, i.e. MEIL paid relevant taxes on the relatable income earned out of such contracts. Therefore, constituent is not a sub-contractor and the assessee is not a contractor. The consortium was created only for the purpose of procuring the contract. Learned counsel mentioned that the assessees were under dure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the levy of interest under S.201(1A) is mandatory, learned counsel vehemently argued stating that there is estoppel against law. If a particular income is not chargeable to tax in the hands of the assessee, there is no need to make TDS on the said income by the assessee. In this regard, learned counsel relied on the decision of Apex Court in the case of CIT V/s. VMRP Firm (56 ITR 67). Placing reliance on the decision of the Hon ble Supreme Court in the case of A.Venaktaramaiah (57 ITR 185), he submitted that an assessee cannot be tied down to a wrong concession made in the return of in course of assessment. Finally, learned counsel summed up by stating that there is no liability cast on the assessee to make TDS on the impugned contract sum and therefore, the sustaining of the interest levied under S.201(1)(1A) is unwarranted. 10. On the other hand, learned Departmental Representative for the Revenue, being critical of the decisions cited by the learned counsel for the assessee, submitted that they are all distinguishable on facts. He submitted that there are no written agreements between the assessee and its constituent i.e. MEIL and the terms and conditions are not clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the CIT(A) revealed that the Commissioner(Appeals) opined the assessee as the one regularly making TDS on the said contract amount and in fact, fact of the matter in these cases is that the assessees made TDS under protest, which is completely ignored. Although the issue was raised by the assessee before the CIT(A), on the issue of the liability to make TDS, the Commissioner (Appeals) has not gone into the facts and circumstances under which the assessee-JV had to make TDS under protest subsequent to survey. The case of the Authorised Representative before us, is that during the survey operations, the assessees were under duress to effect TDS on the said amount against their will, and it was done only in order to cooperate with the Department s demand for making TDS and depositing with Government. Otherwise, it is not required and the assessee is not in default. Therefore, as per the assessee, such making TDS is uncalled for. Further it is the argument of the learned counsel that there is no estoppel against law. The principles of waiver and acquiescence cannot operate against the statute. It is also the argument of the learned counsel that the assessee cannot be tied do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the CIT(A) failed to adjudicate upon the ground relating to the issue of assessee s liability to make TDS. We cannot appreciate this diabolical approach as they are against the spirit of the issues raised in the grounds before us. We go by the issues raised before us and considering the paucity of elaborate discussion made out, the arguments of the learned counsel/grounds raised before the CIT(A), we are of the opinion that the objection raised by the Learned Departmental Representative about the requirement of fresh adjudication on the said issue relating to liability to make TDS under S.201(1) of the Act is required to be approved. It is not the case of the assessees that the assessees never protested making the TDS on the contract amount. The CIT(A) should have examined the relevant facts and circumstances under which, after the survey action, the assessees had to make TDS on the impugned sum and should the same at all be subject to TDS in the hands of the assessee. Considering the issues raised in the grounds, which were not adjudicated properly by the first appellate authority, we are of the opinion that all the grounds should be remanded back to the files of the CIT(A) fo ..... 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