9911796707
TMI Blog2012 (8) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... ructures Limited, SEW Infrastructure Ltd., MAYTAS Infra Ltd & BHEL. The Government of Andhra Pradesh had awarded contract : PRANAHITA -CHEVELLA LIFT IRRIGATION Scheme- Link II-PACKAGE 8 -Detailed investigations, design and execution of Lift Irrigation Schemes for drawl and lifting of 136.24 TMC of water from Ragampet (V), Karimnagar (D) to Motevagu reservoir. During the course of survey conducted in this case on 13.11.2009, it was found that the assessee CONSORTIUM had received an amount of Rs. 45.65 crores from the government of Andhra Pradesh for the period from 1.4.2009 to13.11.2009. However, while remitting the said amount to the respective partners, no tax was deducted at source. Therefore, a show cause notice was issued to the above CONSORTIUM on 1.12.2009 to show cause why the assessee should not be treated as assessee in default and the assessee was asked to file reply on or before 9.12.2009. Since the assessee did not file any reply, the assessing officer treated the assessee as in default and levied tax under S.201(1) of the Act of Rs. 84,43,957 and charged interest under S.201(1A) of the Act of Rs. 6,26,412, vide order of the assessing officer dated 29.1.2010 passed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of the assessees in all these appeals are identical except of the amount involved, and the same, as taken from ITA No.63/Hyd/2011, read as follows- "1. The learned CIT(A) erred in appreciating the grounds raised by the appellant where it has challenged its liability to deduct tax at source under section 194C and consequent levy of interest under section 201 and 201(1A). 2. The learned CIT(A) ought to have appreciated the legal position that the levy of interest under section 201(1A) is linked with levy of basic liability under section 201 which is the first issue to be adjudicated before sustaining addition under section 201(1A). Therefore, non-adjudication of the basic issues makes her order infirm and legally not unsustainable. 3. The learned CIT(A) ought to have appreciated the submissions of the appellant in the correct perspective which basically questioned the liability under section 194C read with section 201 basing on judicial precedents and denied the liability in toto by challenging the order of AO. The learned CIT(A) misconstrued the submissions of the appellant. 4. The learned CIT(A) ought not have limited the order merely to levy of interest under section 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT V/s. VRMP Firm(56 ITR 57). 8. Further, on the existence of TDS liability on the assessee, learned counsel argued stating that the revenue does not fix any tax liability on the assessee in respect of the contract sum so received and for this proposition, learned counsel filed a copy of the relevant assessment order which showed the assessed income of the assessee for the relevant assessment year at 'NIL'. Thus, he denied any TDS liability on the impugned contracts, procured and transferred to MEIL(Megha Engineering and Infrastructure Ltd.) in this case. Referring to para 4 of the J.V. agreement dated 2.4.2008, learned counsel underlined the requirement of satisfactorily completing the projects undertaken by the constituents. Further, he underlined the responsibility of each J.V. partner in completing project of its share. In times of difficulties, when any of the partner is not in a position to do its duty/responsibilities, the J.V. does not bar other constituents take up the duties and responsibilities of the said constituent in the interest of the impugned contract so procured by the Consortium. Referring to the CIT(A)'s reliance on the judgment of the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r S.201(1A) of the Act only. Shri Srinivas, learned CIT-DR read out the grounds raised before the CIT(A) to demonstrate that the same were not adjudicated by passing a speaking order. 11. We heard both the sides and perused the orders of the lower authorities and other material available on records. We have also gone through the relevant provisions of the Act relating to the TDS in general and the provisions of S.194C in particular. Provisions of section 201(1) of the Act uses the expression 'any person, who is required to deduct any sum in accordance with the provisions of the Act.....' Learned counsel's stand is that there is no such requirement in this case. As per the provisions of S.194C, an amount has to be deducted out of the sum in pursuance to a contract, at the time of payment/credit towards incometax on the income comprised therein in terms of S.194C of the Act. When a particular sum is not income at all for an assessee, the requirement of making TDS is non-existent. When certain payments are routed through the JVs, which are merely credited for obtaining the contract, it has to be examined, if such contract amount constitutes income at all and chargeable to tax or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. We have also considered the learned counsel's reliance on para 3 and 4 of the impugned order of the CIT(A) for the proposition that the CIT(A) in fact dealt with the issue of liability to make TDS and therefore, the Learned Departmental Representative's contention that the CIT(A) failed to adjudicate the grounds raised, must be dismissed. On perusal of the said paragraphs, we find that the CIT(A) merely dismissed the assessee's grounds relying on the assessee's compliance in effecting TDS. But CIT(A) did not discuss the fact that made assessee to effect TDS, i.e. events that occurred during the survey operations. In the process, the factors leading to such compliance, why assessee effected TDS and circumstances thereof were ignored. CIT(A) should have given attention to the grounds raised before him and gone to the root of the matter as to why the assessee is aggrieved on the issue of the requirement to deduct TDS and the liability on the assessee etc. It is a fact that the contract sums were 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 assesseeconsortium. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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