9911796707
TMI Blog2015 (8) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... case and in law, the learned CIT(TDS) erred in assuming the jurisdiction under section 263 of the Act since:- 2.1 the revisionary proceedings under section 263 of the Act have merely been initiated on the basis of the letter received from Assistant Commissioner of Income Tax (TDS), Chandigarh ('ACIT') and the CIT(TDS) did not arrive at any independent satisfaction for initiation of such proceedings. 2.2 by acceding to the request of the learned ACIT, the CIT(TDS) has effectively enhanced the time limitation prescribed under section 201(3) of the Act for completion of 201 proceedings by a TDS officer. 2.3 the order passed by the learned ACIT is neither 'erroneous' nor 'prejudicial' to the interest of the revenue since the learned ACIT took one of the two permissible views after conducting a detailed enquiry in respect of various expenses incurred by the Appellant. 3. On the facts and circumstances of the case and in law, the order passed by the learned CIT(TDS) under section 263 of the Act is bad in law and void ab intio, since the learned CIT has completely ignored the fact that the arrangement between Appellant and the pre-paid distributors during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case as the Assessing Officer in this case has not taken any view and decision at all on this issue, hence the question of two possible views does not arise. Conversely, it is a case where assessing officer, who passed the order u/s 201(1)/201(1A), himself admitted the fact of having omitted this issue of the assessee being liable for deducting tax at source u/s 194H of the I.T. Act on the discount/commission paid to the vendors on prepaid sim cards/recharge vouchers. 3. The claim of the assessee that discount/commission paid to vendors against prepaid sim cards/recharge vouchers are not liable for TDS u/s 194H of the I.T. Act is also not correct and acceptable for the reason that the Hon'ble High Court of Delhi in the case of Idea cellular has held that discount paid to the vendors on prepaid sim cards/recharge vouchers are in the nature of commission attracting provisions of sections 194H of the I.T. Act, 1961." It view of the above the order passed by ACIT (TDS) u/s 201(1) read with Section 20(1A) was held to be erroneous and prejudicial to the interest of Revenue. The same was set aside with a direction to Assessing Officer to examine the default of the assessee to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order it was possible to take a view that provisions of section 194H are not applicable. Once a possible view has been taken then such an order cannot be called erroneous or prejudicial to the interest of Revenue and in this regard he relied on the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 and CIT v. Max India Ltd. [2007] 295 ITR 282. 8. The Ld. Counsel further contended that Commissioner has no power to pass an order beyond the issues raised in notice and in this regard he relied on the decision of Hon'ble Punjab & Haryana High Court in the case of CIT v. Jagadhri Electric Supply & Industrial Co. [1983] 140 ITR 490. However, when Ld. Counsel was confronted by the Bench that how the Ld. Commissioner has travelled beyond the notice, he simply stated that in the notice it has been stated that issue regarding deduction of tax u/s 194 'was omitted to be verified' whereas in para 1 of his finding at page 8 the Commissioner states that Assessing Officer has 'omitted to have dealt with the issue' of discount commission paid on prepaid/recharge vouchers liable for TDS u/s 194H of the I.T. Act. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions of Ld. Counsel for the assessee. Section 263(1) which gives revisionary power to the Commissioner reads as under:- "263 (1) : The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 12. The careful reading of the provision would show that there is no requirement of giving any notice before assuming the jurisdiction under this provision. This position has been clarified by Hon'ble Supreme Court in the case of CIT v. Electro House [1971] 82 ITR 824. The head noted of the decision reads as under:- "Unlike section 34, section 33B of the Income-tax Act, 1922, does not require any notice to be issued by the Commissioner before he assumes jurisdiction to proceed to revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concepts of natural justice have undergone vital change and that the distinction between "administrative orders" and quasi-judicial order" is so thin that it has almost vanished in recent times. Rules of natural justice are not embodied rules, and they depend on the facts and circumstances of each case. "This principle of what is called 'natural justice' may be burdensome to some minds, but this price - a small price - has to be paid if we desire a society governed by law". A quasi-judicial body may not be required to hold an enquiry in all cases but it will be clear breach of natural justice if it does not inform the party and give him a chance of dealing with it. It is the duty of a quasi-judicial authority like the Commissioner of Income-tax acting under section 263 to inform he assessee of the evidence sought to be relied on and give him an opportunity to meet the case. If the Commissioner acts upon information collected by him which he has not disclosed to the assessee or to the party concerned, and in respect of which full opportunity of meeting the inferences which arise out of it has not been given, it would be a clear breach of natural justice. In Wiseman v. Borne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n incorporated in this section so as revisionary order should be passed after considering the contentions of the other party. Now as far as opportunity of being heard is concerned, we do not think that it is necessary that Commissioner himself shall sign the communication of giving such opportunity for example all the High Courts and Supreme Court dealing with a particular petition, simply pronounce in the Court 'issue notice'. It does not mean that Ld. Judges are required to sign all such notices and that work is done by the Registry of the High Court or Supreme Court. In view of the above position, we are of the opinion that Ld. Commissioner has invoked the jurisdiction correctly. In fact some arguments were made that how the proposal has been put up by Assessing Officer. However, on questioning by Bench Ld. counsel has fairly agreed that the law permits the subordinate staff including the Assessing Officer to put up a proposal for passing revisionary order before the Commissioner. In this regard we may point out that Hon'ble Allahabad High Court in the case of CIT v. Bhagat Shyam & Co. [1991] 188 ITR 608 clearly observed that there is no bar to the Income tax officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2006-07, 2007-08, 2008-09, 2009-10 & 2010-11 were passed on 24.03.2011 'by the ACIT(TDS), Chandigarh, but issue of TDS on prepaid sim cards u/s 194H was omitted to be verified and as such no demand u/s 201(1)/201(1A) of the Income tax Act was raised on this issue. Therefore, in view of these facts, the ACIT(TDS), Chandigarh submitted that the order passed by him is erroneous as it is prejudicial to the interest of revenue for not raising any demand u/s 201(1) & 201(1A) of the I.T Act on account of non-deduction of tax at source on commission paid on sale of prepaid sim cards u/s 194H of the I.T. Act, 1961. In the interest of natural justice, before passing any order an opportunity of being heard is being given to you. So you are requested to attend the office of worthy Commissioner of Income tax (TDS), Chandigarh on 04.05.2012 at 11:30AM. Please ensure the compliance on said date and time. Yours faithfully, Sd/- (Harbans Kaur) Income Tax Officer, HQ (TDS) Chandigarh" 16. The first para of the finding of the Ld. Commissioner which has already been reproduced is again being reproduced at the cost of repetition as under:- "1. That on examining an scrutiny of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 194H of the Act. It is not clear whether this observation is made with reference to the survey proceedings or proceedings u/s 201. However, the careful reading of the whole order clearly shows that no question has been asked with respect to non-deduction of tax on commission/incentive on prepaid cards. No reply seems to have been given. Assuming for arguments sake, that it is not necessary to mention everything in the order but nothing has been field before us to show that relevant question on this issue was asked by the Assessing Officer and replied were also given. Therefore, it is a clear case of non-enquiry in respect of this issue. The Ld. CIT-DR has correctly submitted that Assessing Officer has merely set up a preamble on this issue in the first para but has not made any enquiry in this respect. In this regard we may mention that mere non enquiry would also render a particular order passed by lower authority as erroneous and prejudicial to the interest of Revenue. This position has been clearly confirmed by Hon'ble Supreme Court in the case of Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 & Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC). The reasoning for this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake any enquiry. 19. The last contention made by the Ld. counsel was that in view of the decision of Hyderabad Bench of the Tribunal in the case of Idea Cellular Ltd. (supra), the Assessing Officer has taken one of the possible view. We find no merit in this contention also. No doubt that Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. (supra) has held that if Assessing Officer has taken a particular view which is legally possible then such order cannot be held to be erroneous and prejudicial to the interest of Revenue. However, as we have seen above, this is a case of non-enquiry and, therefore, it cannot be said that Assessing Officer has taken a particular view. 20. The second aspect on this issue is that similar issue was decided in favour of the assessee by Delhi Bench of the Tribunal in the case of Idea Cellular Ltd. (supra) and Idea Cellular Ltd.'s case (supra) by Hyderabad Bench of the Tribunal. It is to be noted that first decision in the case of Idea Cellular Ltd. (supra) was rendered on March, 28, 2008. This decision was reversed by Hon'ble Delhi High Court on 19.2.2010 which was reported at Idea Cellular Ltd.'s case (supra). Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
