2013 (12) TMI 890 - AT - Income Tax

Leasing the quarrying by the Temple Management Committee - Liable for TCS - Held that - As per decision in Jagannath Temple Managing Committee vs CIT & Others 2007 (10) TMI 173 - ORISSA HIGH COURT - Shree Jagannath Temple Managing Committee has been constituted by the State Government under the provisions of Shree Jagannath Temple Act - As per section 2(31) - From the definition of the word person , it is apparent that an authority established by under Central, State or Provincial Act for managing affairs of the temple cannot be regarded to be a person . Temple is different from its Managing Committee, which has been appointed under Shree Jagannath Temple Act - The order of the Assessing Officer did not make the Jagannath Temple Managing Committee to be responsible for collecting tax - The Assessing Officer has made Shree Jagannath Temple Office to be responsible to collect tax which cannot be a person - It cannot also be every person as referred to Section 206(1C) - The order passed by the Assessing Officer is void ab initio - Decided in favour of assessee.

Summary

Issues involved:
Appeals against delay in filing, liability under section 206C of the Income Tax Act for tax collection on leasing out quarries.

Analysis:
1. Delay in filing appeals: The appeals were filed by the assessee against the order of the Commissioner of Income Tax for the assessment years 2005-06 and 2006-07. The assessee filed condonation petitions for the delay of 692 days in one appeal and 753 days in the other. The Tribunal noted that Shree Jagannath Temple Office, not being an assessee, was the entity involved. After considering the condonation application, the Tribunal found sufficient cause for the delay and condoned it.

2. Liability under section 206C: The main issue in both appeals was whether Shree Jagannath Temple Office could be held liable under section 206C of the Income Tax Act for tax collection on leasing out quarries. The Tribunal observed that the Assessing Officer had passed orders without specifying the status of the assessee, relying on section 206C(1)(c). However, the Tribunal referred to the Orissa High Court judgment regarding the constitution of the Temple Management Committee under the Shree Jagannath Temple Act (1955). The Act granted complete tax exemption to the Committee under section 10(23BBA) since 1962.

3. Interpretation of section 206(1C): The Tribunal analyzed section 206(1C) which mandates tax collection on leasing out specific properties. It pointed out that the term 'person' was not defined under section 206C, but section 2(31) of the Income Tax Act included various entities as persons, excluding authorities established by Central, State, or Provincial Acts. The Tribunal concluded that Shree Jagannath Temple Office could not be considered a 'person' under section 206(1C) and, therefore, could not be held liable for tax collection.

4. Decision: The Tribunal held that the order passed by the Assessing Officer was void ab initio as Shree Jagannath Temple Office was not a person as defined under the Income Tax Act. Consequently, the Temple Managing Committee could not be held liable under section 206C(6) to pay tax to the Central Government. The Tribunal quashed the Assessing Officer's order and deleted the tax demand. As a result, both appeals filed by the assessee were allowed.

This detailed analysis of the judgment provides insights into the issues of delay in filing appeals and the liability under section 206C of the Income Tax Act, emphasizing the legal interpretations and conclusions drawn by the Tribunal.