2017 (2) TMI 731 - AT - Income Tax

TDS under section 194C or 194-I - work over operations, transport expenses - Held that - When this appeal came up for hearing before the Commissioner of Income Tax (Appeals), the Commissioner of Income Tax (Appeals) without adjudicating merits of the case, directed the Assessing Officer to follow the decision of the Hon ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA ). We find that the Commissioner of Income Tax (Appeals) has not considered the ground No.2 raised by the assessee, he only considered the alternative plea and remanded the matter back to the file of the Assessing Officer. We, therefore, by considering the arguments of both the sides and also request made by both the counsel, set aside the order passed by the Commissioner of Income Tax (Appeals) and remand the matter back to the file of the Assessing Officer to examine all the details of the case and decide the issue afresh in accordance with law.

Summary

Issues involved:
1. Proper classification for TDS deductions under sections 194C and 194-I for work over operations and transport expenses.
2. Adjudication of grounds raised by the assessee regarding TDS deductions.
3. Consideration of facts and circumstances by the Assessing Officer.

Issue 1: Proper classification for TDS deductions under sections 194C and 194-I for work over operations and transport expenses:
The case involved appeals by the assessee against the Commissioner of Income Tax (Appeals)'s order for Assessment Years 2008-09 & 2009-10. The Assessing Officer observed that the assessee did not make proper TDS deductions for payments related to work over operations and transport expenses. The Assessing Officer believed that TDS should have been deducted under section 194-I instead of 194C. The assessee contended that TDS was correctly deducted under section 194C. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to consider the payees' income tax returns and granted relief to the assessee based on the judgment of Hindustan Coca Cola Beverage (P) Ltd. v. CIT [293 ITR 226 (SC)]. The Tribunal remanded the matter back to the Assessing Officer to decide the issue afresh in accordance with the law.

Issue 2: Adjudication of grounds raised by the assessee regarding TDS deductions:
The assessee raised specific grounds before the Commissioner of Income Tax (Appeals) regarding the application of section 194-I and alleged short deductions. The Commissioner of Income Tax (Appeals) did not adjudicate the grounds raised by the assessee but directed the Assessing Officer to examine the payees' returns, following the Hindustan Coca Cola Beverage (P) Ltd. judgment. The Tribunal set aside the Commissioner's order and remanded the matter back to the Assessing Officer for a fresh decision based on all case details.

Issue 3: Consideration of facts and circumstances by the Assessing Officer:
The Tribunal directed the Assessing Officer to follow the order passed for the Assessment Year 2008-09 in the case of ITA No. 157/VIZ/2013, as the facts and circumstances were similar. Both appeals filed by the assessee were allowed for statistical purposes. The judgment was pronounced on January 20, 2017.

This detailed analysis covers the classification of TDS deductions, adjudication of grounds raised by the assessee, and the consideration of facts and circumstances by the Assessing Officer, as addressed in the legal judgment by the Appellate Tribunal ITAT VISAKHAPATNAM.