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TMI Blog2013 (11) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, CIT(DR) ORDER Per B. R. Baskaran, Accountant Member: The assessee has filed these five appeals challenging the orders passed by Ld Cit(A), of which three appeals( ITA 206, 208 209/Coch/2013) relate to the demands raised u/s. 201 201(IA) of the Act treating the assessee as the assessee in default for non-deduction of tax at source. These three appeals relate to the financial years relevant to the assessment years 2007-08, 2008-09 and 2009-10. The other two appeals, viz., ITA 207 210/Coch/2013, are against the quantum assessments relating to the assessment years 2008-09 and 2009-10. All these appeals were heard together and hence they are being disposed of by this common order, for the sake of convenience. 2. We shall first take up the appeals filed by the assessee challenging the demand raised u/s. 201 201(IA) of the Act. 3. The facts relating to the same, which are common in all the three years, are stated in brief. The assessee-Society was started to run a medical college at a place called Pariyaram. It is pertinent to note that the assessee- society is not registered u/s. 12A of the Act. Since it could not invest funds for establishment of a full-fledged h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sec. 194I mandates deduction of TDS u/s. 194I of the Act at the time of credit of lease rent to the account of the payee or at the time of payment whichever is earlier. So, accordingly, the Assessing Officer held that the assessee is required to deduct tax at source from the lease rent even if it is not paid to the lessor. Since the assessee did not deduct tax at source, the Assessing Officer treated it as an assessee in default and raised demand u/s. 201 of the Act in all the three years. The Assessing Officer also levied interest u/s. 201 201(1A) of the Act apparently, up to the date of passing of the impugned order, i.e., up to 17-12-2009. 6. We shall now discuss about the facts relating to the additions made in the quantum proceedings relating to the assessment years 2008-09 and 2009-10. In both these years, the Assessing Officer held that the income of the assessee is assessable as income from business, since the assessee is not registered as charitable institution u/s. 12A of the Act and further the assessee is seen collecting fees. Accordingly, the Assessing Officer assessed the income of the assessee under the hear income from business. While computing the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng officer. However, the said returns were not acted upon by the Assessing Officer. He submitted that KCHC Ltd. has declared the impugned lease rent payments in the said returns of income in the respective years. He submitted that , as per the decision of the Hon'ble Supreme Court in the case of Hindustan Coco Cola Beverages (P) Ltd. vs. CIT (293 ITR 226), the Assessing Officer was not right in raising the demand u/s. 201 of the Act, once the recipient has declared the receipt in its return of income and paid the tax thereon. He submitted that KCHC is not liable to pay any tax in view of the loss declared in the returns of income. 10. He further submitted that the assessee has submitted an application seeking registration u/s. 12A of the Act before the Ld. CIT, Calicut on 31-03-2011. Both the assessee as well as KCHC Ltd. has submitted petitions before the Central Board of Direct Taxes seeking CBDT to condone the delay - in filing the application for registration u/s. 12A of the Act by the assessee and also in filing of income tax returns by KCHC Ltd. Accordingly, he prayed that the impugned appeals may be kept pending till the disposal of applications by the CBDT. 11. The Ld C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is therefore submitted that this amendment may be considered as applicable to the applicant's case in respect of these assessment years." 12. On the contrary, the Ld D.R submitted that the assessee's request to keep the appeals in abeyance only point to the fact that the assessee is accepting the additions made by the AO. She further submitted that the classification of lease rent payment of Rs.6.50 crores into two categories is not supported by any document and in any case, the payment made for use of hospital facilities without taking possession will also fall in the category of rent only. She further submitted that the assessee has filed application seeking registration u/s 12A of the Act only subsequent to the passing of impugned orders and hence it will not have any effect on the present appeals. With regard to the claim of filing of returns of income by KCHC, the Ld D.R submitted that the same has been belatedly and hence they cannot be considered as returns of income filed u/s 139 of the Act. Accordingly she submitted that the amendments brought out by Finance Act 2012 in sec. 201 as well as in sec. 40(a)(ia) shall not apply to the assessee. 13. We have heard the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions made by Ld A.R. 15. In view of the foregoing discussions, we do not find any reason to interfere with the decision rendered by Ld CIT(A) with regard to the demand raised u/s 201 of the Act and the interest charged u/s 201(1A) of the Act in all the three appeals under consideration. 16. In the quantum appeals filed for the assessment year 2008-09 and 2009-10, the assessee is contesting the additions made u/s 40(a)(ia) of the Act for non-deduction of tax at source on certain payments. However, the assessee did not demonstrate before us as to how the said provision is not applicable to it. The assessee simply placed reliance on the decision rendered by Hon'ble Calcutta High Court in the case of Virgin Creations (supra), wherein it was held that the amendment brought out by Finance Act 2010 in sec. 40(a)(ia) was retrospective in nature. We notice that the said decision was rendered in the context of amendment brought out by Finance Act 2010 in sec. 40(a)(ia) of the Act by making certain modifications in the section. The facts prevailing in the instant case is totally different, which has been discussed in the preceding paragraphs. For example, the department is disputin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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