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South Western Railway Versus The Commissioner of Income Tax (Appeals)

2016 (9) TMI 204 - ITAT BANGALORE

Default on the part of the assessee to collect tax - licensee on the income from parking lots - Held that:- It is apparent that only one month time was granted to the assessee to furnish the relevant details and evidence to show that the licensees have paid the tax on the income from parking lots. It is pertinent to note that except one year i.e. A.Y. 2012-13, all other five assessment years are past period and since the earlier year licensee at relevant point of time might have left and discont .....

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e impugned orders of the authorities below and direct the Assessing Officer to give one more opportunity to the assessee to furnish the relevant details and evidence of payment of tax by the licensee and thereafter reconsider the matter afresh. - I.T. A. Nos. 1434 to 1439/Bang/2015 - Dated:- 29-7-2016 - Shri Vijay Pal Rao, Judicial Member And Shri Inturi Rama Rao, Accountant Member Appellant By : Shri Tulajappa Kalburgi, Advocate Respondent By : Shri Sunil Kumar Agarwal, JCIT ORDER Per Bench The .....

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s on explanation to section 191 which provides that primary liability of payment of income tax is on the assessee to whom the income belongs. (2) The learned Respondent is not justified in treating the appellant as an assessee in default only on failure to deduct tax at source. Reading together of section 201(1) and proviso to section 201(1) of the Act clarify that (a) that there shall be failure to withhold tax at source and (b) in addition to that failure, the recipient of the income has also .....

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urn of Income and acknowledged that the receipts from parking lot as their income which is accepted by the department and in such a cases the appellant cease to be assessee in default. (b) That the Respondent failed to appreciate that the onus is on the revenue to demonstrate that the taxes have not been recovered from the person to whom parking lot was awarded and they are the primarily liability to pay tax. There is no mention step taken by the Department in order u/s. 206(C). (c) That the lea .....

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ub-section 6A of section 206C contemplates the assessee to be in default in respect of tax without fixing the liability by due process of proceedings for computing tax liability by order and therefore hit by Article 19(1)(g) of the constitution. (d) That the learned Respondent ought to have consider the fact that the appellant cannot be treated as an assessee in default till it is found that the parking lot allottee or licensee has failed to pay tax directly. (e) That no sufficient and adequate .....

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cording to said section, tax is levied upon assessee depending upon income accrued in the previous year and not upon the income earned by other persons. Invoking the provisions of section 206C(6) and 206C(6A) is erroneous and overrides the provisions of charging section. (h) The definition of Railway administration does not make railway as legal entity or judicial person as it held by the Supreme Court in State of Kerala v. G.H.S Railway AIR 1976 SC 2538 equivalent citations: 1977 SCR (1) 419. ( .....

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ssee declared as an assessee in default. If no period of limitation is prescribed, a statutory authority must excise its jurisdiction within reasonable period. (7) That the learned Respondent has failed to appreciate that the proceeding under section 206C is also assessment proceeding and for re-assessment the AO should record the reason and issue notice under section 148 of the IT Act. APPEAL FEE (8) That as per Sec 253(6)(d) an appeal made, be accompanied by a fee of ₹ 500/ - where the s .....

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is filing the appeal today. PRAYER (10) WHEREFORE, the appellant most respectfully prays on aforesaid grounds and among other grounds that will be urged at the time of hearing that this Hon'ble Tribunal may be pleased to: (i) To admit the appeal and allow this appeal and to set aside the order passed u/s. 206C; (ii) Set aside and cancel the demand of Tax and interest. (iii) T hat your honour may be pleased to pass such orders as the facts and circumstances of the case may require. GROUNDS F .....

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The appellant is filed an application for stay for demand raised by the Income Tax Officer (TDS) Hubli in form as mention in Appendix X(e). Pending disposal, the appellant respectfully prays this Hon'ble Tribunal may please grant Order for waiver of pre deposit till the appeal is decided. 3. The brief facts giving rise to the controversy are that a spot verification was done by the Assessing Officer on 16.01.2013 in the office of Senior Divisional Commercial Manager, South Western Railway, H .....

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he Govt. of India account, return filed, etc. In response the assessee furnished the details of the total receipts from parking lots/license fees for the F.Ys 2006-07 to 2011-12 relevant to the Assessment Years 2007-08 to 2012- 13. Since no tax at source was collected by the assessee on such receipts, the Assessing Officer invoked the provisions of section 206C of the Act and passed the impugned order by holding that the assessee as the assessee in default under Section 206C of the Act. The Asse .....

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essee to collect necessary details from the earlier licensees who had already left the parking lots. Thus the learned Authorised Representative has pleaded that the assessee was not given a proper opportunity to collect the information about the tax paid by the licensees and to produce before the Assessing Officer. He has explained that since the information pertains to six years and out of which five years are prior year for which it was not easy to trace out the persons operating the parking l .....

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or before the CIT (Appeals). Therefore no further opportunity can be given to the assessee. 6. We have considered the rival submissions as well as the relevant material on record. As per the details of the receipts furnished by the assessee before the Assessing Officer, the following amounts were received as license fees towards parking lots : F.Y. Amount in Rs. 2006-07 1365582 2007-08 1939831 2008-09 2426710 2009-10 2955630 2010-11 4770981 2011-12 7059143 Section 206C(1C) mandates the collectio .....

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ter in this section referred to as "licensee or lessee") for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such licence, contra .....

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xplanation 2.-For the purposes of Explanation 1, "mineral oil" includes petroleum and natural gas. 7. Therefore in case of default on the part of the assessee to collect tax or the payment of tax by the licensee on the income from parking lots the assessee being responsible for collection of tax is liable to pay the tax being the assessee in default. In this case the spot verification was done on 16.1.2013 and thereafter the Assessing Officer issued show cause notice and reminder as un .....

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