2014 (10) TMI 107 - HC - Income Tax

Assessee in default u/s 201(1) - Treatment of payment made to hire of JCB Machine, Roller & Tractors Section 194C or 194I Effect of amendment w.e.f. 13-7-2006 Held that - CIT(A) as well as Tribunal have rightly relied upon M/s. Hindustan Coca Cola Beverage Pvt. Ltd Versus Commissioner of Income Tax 2007 (8) TMI 12 - SUPREME COURT OF INDIA the deductees had already paid the tax on the same, have set aside the demand raised by the revenue and has quashed and set aside the order passed u/s 201(1) of the Act - once tax due has been paid by the deductee, thereafter tax cannot be recovered once again from the assessee - as such no error has been committed by the tribunal in confirming the order passed by the CIT(A) in quashing and setting aside the demand of tax raised against the assessee and quashing and setting aside the order passed under section 201(1) of the Act with respect to payment made to hire of JCB Machine, Roller & Tractors thus, as the matter is already remitted back to the AO for verification of the claim and computation of the liability of the assessee to the extent of interest paid by the assessee, there is no reason to interfere with the order Decided against revenue.

Issues:
1. Amendment of substantial question of law in Tax Appeals
2. Common question of law and facts in group of appeals
3. Dismissal of appeal by Income Tax Appellate Tribunal
4. Treatment of payment under section 194C instead of 194-I
5. Appeal against orders passed by CIT(A)
6. Challenge to order under section 201(1)(A) of the Act
7. Liability of interest in respect of payment to TML Finance Ltd.
8. Remittal of matter back to Assessing Officer
9. Dismissal of appeals and cross objections

Amendment of Substantial Question of Law:
The High Court granted leave to amend substantial questions of law in Tax Appeal Nos. 600 and 602 of 2014. The appeals involved common questions of law and facts between the same parties and the same assessee but for different Assessment Years. The appeals arose from a common judgment and order by the Income Tax Appellate Tribunal (ITAT) in relation to appeals filed by the revenue and cross objections filed by the assessee.

Dismissal of Appeal by ITAT:
The revenue was dissatisfied with the judgment and order of the ITAT in dismissing the appeal filed by the revenue concerning the payment made for the hire of JCB Machine, Roller & Tractors. The ITAT confirmed the order passed by the Commissioner of Income Tax (Appeals) quashing the demand raised under section 201(1) and interest under section 201(1)(A) of the Income Tax Act.

Treatment of Payment under Section 194C:
The substantial questions of law raised by the revenue pertained to the treatment of payments made for the hire of machinery under section 194C instead of section 194-I of the Income Tax Act. The revenue challenged the ITAT's decision in treating the payments under section 194C based on amendments in the law.

Challenge to Orders Passed by CIT(A):
The revenue appealed against the orders passed by the CIT(A) quashing the demand for hire of machinery and setting aside the order under section 201(1) of the Act. The CIT(A) directed the Assessing Officer to re-calculate the demand and initiate penalty proceedings under section 271(C) following CBDT Circular after verifying the tax payment by deductees.

Challenge to Order under Section 201(1)(A):
The revenue challenged the order passed by the CIT(A) quashing the demand under section 201(1)(A) of the Act. The CIT(A) remitted the matter back to the Assessing Officer for re-calculation of the demand following CBDT Circular. The High Court upheld the decision of the CIT(A) and ITAT in this regard.

Liability of Interest to TML Finance Ltd.:
The appeals and cross objections involved the charge of tax as interest under section 201(1) and 201(1)(A) of the Act concerning payment of interest to TML Finance Ltd. The ITAT remitted the matter back to the Assessing Officer to verify the claim and compute the liability of the assessee to the extent of interest paid.

Remittal of Matter to Assessing Officer:
The ITAT remitted the matter back to the Assessing Officer to verify the claim and compute the liability of the assessee in various instances. The High Court found no reason to interfere with the ITAT's decision in remitting the matter back for further assessment.

Dismissal of Appeals and Cross Objections:
After detailed analysis and considering the arguments presented, the High Court concluded that all the appeals deserved to be dismissed. The High Court upheld the decisions of the CIT(A) and ITAT in various matters, finding no errors in their judgments.

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