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TMI Blog2015 (1) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... n these findings of ld. CIT(A) as the final conclusion, in any case, will not be materially different from that arrived at by ld. CIT(A) and, accordingly, confirm the same, as the interest has been charged up to the due date of filing of return by the deductees. We are not in agreement with the submissions of ld. counsel for the assessee that the interest should have been charged only up to the 31st March of financial year because as held by Hon’ble Madras High Court in the case of CIT Vs. Chennai Metropolitan Water Supply and Sewerage Board [2011 (9) TMI 224 - CHENNAI, HIGH COURT], interest is required to be paid up to the date on which the return had been filed by the payee. Decided against revenue as well as assessee. - ITA no. 2816/Del/2012, C.O. No. 291/Del/12 - - - Dated:- 12-1-2015 - SHRI S.V. MEHROTRA AND SHRI A.T. VARKEY, JJ. For The Department : Mrs. Y. Kakkar DR For The Assessee : Shri Rupesh Jain Adv. Shri Upvan Gupta CA ORDER PER S.V. MEHROTRA, A.M:- The department has preferred appeal and the assessee has filed cross objection against the order dated 21-03-2012, passed by the CIT(Appeals), Faridabad in appeal no. 145/GGN/2009-10 for A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in support of its contention that respective hospitals had already paid tax to govt. a/c and there was no revenue loss to the department. The AO, therefore, computed the default for non-deduction of tax u/s 201(1), as under: Amount of TDS ₹ 13400855 Interest Rs. 1765387 2.2. Further, for delay in depositing the TDS, the interest chargeable u/s 201(1A) was computed at ₹ 17042/- as under: Amount of tax deducted Due date of payment Actual date of payment Interest u/s 201(1A) to be charged ₹ 1112819/- 07-07-2008 09-07-2008 ₹ 11128/- ₹ 127768/- 07-05-2008 16-05-2008 ₹ 1277/- ₹ 463729/- 07-07-2008 09-07-2008 ₹ 4637/- Total ₹ 17042/ - 2.3. Before ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be filed before the AO due to time constraints and voluminous exercise, but the same were called for and admitted by exercising power under Rule 46A(4) of the I.T. Rules in order to decide various grounds of appeal judiciously. 2.7. Ld. CIT(A), after examining the certificates filed by the assessee, pointed out that hospitals obtained a general certificate from their auditors to the effect that they had paid taxes on income. After considering the details, ld. CIT(A), inter alia, observed as under: During the FY 2008-09, the appellant has made payments of ₹ 20,000/- or less to 243 hospitals on which TDS of ₹ 2,88,465/- and interest of ₹ 37,072/- has been worked out. As regards total payments of ₹ 112,039,526/- having TDS implication of ₹ 1,26,94,078/- the appellant has field certificates regarding taxes paid by the hospitals as page 1 to 425 of the paper book. Some of the hospitals have also enjoyed exemption from deduction of tax by virtue of certificates obtained u/s 197(1) of the Act. The appellant has not been able to file certificates in respect of remaining TDS amount of ₹ 4,18,312/-. In the light of decision of Hon ble supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. up to September 2009. Thus, the interest for further period of 6 months works out to ₹ 25,098/-. In respect of no certificate cases of deductees, the total interest works out to ₹ 1,36,374/-. In respect of hospitals from which the certificates have been filed, the amount of interest has been worked out by the appellant on monthly basis up to 31-03-2009 at ₹ 4,23,084/-(i.e. ₹ 5,34,360/- minus ₹ 1,11,276/-). However, the interest in these cases is also required to be charged up to the due date of filing of returns by the deductees. By estimating that the deductees must have paid at least 90% of their taxes by way of advance tax, the interest on short fall of 10% of TDS amount i.e. s. 12,98,254/- for 6 months works out to ₹ 77,895/-. Consequently, the total interest chargeable in these cases of deductees works out to ₹ 5,00,979/-. Considering the above facts, charging of interest of ₹ 6,37,353/- (i.e. ₹ 1,36,374/- plus ₹ 5,00,979/-) u/s 201(1A) is confirmed and balance interest of ₹ 11,28,034/- is deleted. Ground no. 5 of appeal is partly allowed. 2.10. Being aggrieved, with the order of ld. CIT(A), the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional services. The object of the definition clause Explanation (a) is not to identify the resident , or the recipient, who receives or is paid fee for professional services but to define the services. 3.2. Hon ble Delhi High Court agreeing with the view taken by Hon ble Bombay High Court in the case of Dedicated Health Care Services TPA (India)(P) Ltd. 232 CTR 41, held as under: 24. In Dedicated Health Care Services case (supra), after referring to Section 119 of the Act, following observations have been made:- 14. Section 119 of the Act provides that the Board may, from time to time issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of the Act and that such authorities and all other persons employed in the execution of the Act shall observe and follow such orders, instructions and directions of the Board. The proviso to sub-section (1) however stipulates that no such orders, instructions or directions shall be issued (a) so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. 5. Now coming to the department s appeal and ground nos. 1 4 of cross-objection, the main contention of ld. DR is that ld. CIT(A) wrongly observed that assessee was not given sufficient opportunity for filing the necessary details. He referred to page 1 of the assessment order and pointed out that survey took place on 12-12-2008 and the order u/s 201(1) and 201(1A) was passed on 5-10-2010. Ld. DR pointed out that at page 21, the ld. CIT(A) has observed that vide letter dated 7-3-2011 the paper book and written submissions filed by the assessee were forwarded to the AO, but no report was received from assessee. He referred to page 70 to 101 of the PB and pointed out that before ld. CIT(A) the assessee had filed various evidence on 5-3-2012 and ld. CIT(A) passed the order on 21-3-2012. Therefore, AO had no sufficient time to examine the details. Ld. DR submitted that the details were to be considered under Rule 46A(3) and not under Rule 46A(4). On merits ld. DR referred to provisions of sections 201(1A) to submit that the interest is to be paid from the date on which such tax was deductible to the date of furnishing of return of income by the recipient. 6. As far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. 9. These submissions were duly sent to AO for his comments on 7-3- 2011 but as observed by ld. CIT(A), even after a gap of one year, AO did not file any reply. Some more details along with the details filed on 25-2-2011 were filed by assessee on 5-3-2012 in response to Ld. CIT(A) s directions. Therefore, keeping in view the entirety of facts, it would be proper to conclude the AO had been provided due opportunity in terms of the decision of Hon ble Delhi High Court in the case of CIT Vs. Manish Buildwell (P) Ltd. (2012) 204 Taxman 106, holding as under: 24. In the present case, the CIT (A) has observed that the additional evidence should be admitted because the assessee was prevented by adducing them before the assessing officer. This observation takes care of clause (c) of sub-rule (1) of Rule 46A. The observation of the CIT (A) also takes care of sub-rule (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of sub-rules (1) and (2) of Rule 46A have been complied with. However, sub-rule (3) which interdicts the CIT (A) from taking into account any evidence produced for the first time before him unless the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of ₹ 1,66,428/- for AY 2008-09 and ₹ 5,88,17,651/- for AY 2009-10. Accordingly, it was submitted that tax demand of ₹ 18,856/- for AY 2008- 09 and ₹ 66,70,647/- for AY 2009-10 could not be recovered from the assessee. It was further pointed out that interest u/s 201(1A) was also not leviable as there was no loss of revenue in view of the fact that hospital had paid tax during the relevant year in relation to the income received (including the payment made by the assessee). In this regard, the assessee relied on the decision of Hon ble Gujarat High Court in the case of CIT Vs. Rishikesh Apartments Co-operative Housing Society Ltd. 253 ITR 310, wherein it has been held that where the assessee fails to deduct the amount of tax, which was required to be deducted under the provisions of the Act and the payee has paid sufficient advance tax and tax on self-assessment, on due date, no interest could be levied u/s 201(1A) of the Act on the assessee, out of which tax was required to be deducted at source by the assessee, for the reason that no loss was caused to revenue on account of non-deduction of such tax. 11. The assessee also referred to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,438,996 1,792,407 Total for FY 2008-09 118,277,627 13,400,855 1,783,896 118,614,260 13,438,996 1,792,407 We request relief from the payment of tax of ₹ 13,020,684 and interest of ₹ 1,735,424 in respect of the payments of ₹ 20,000 or less and the payments for which evidence for payment of tax had been collected as per following details:- Category Total payment Amount Total tax Amount Total Interest Amount A.Claim payment of Rs. 20,000 or less in FY 2007-08 12,414 1,407 327 A.Claim payment of Rs. 20,000 or less in FY 2008-09 2,546,025 288,465 37,072 B. Claim payment of Rs. 20,000 or more Evidence collected in FY 2007-08 324,219 36,734 8,184 B. Claim payment of Rs. 20,000 or more Evidence collected in FY 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tan Coca Cola Beverage P. Ltd. (supra), and CBDT Circular no. 275/201/95-IT(B) dated 29-1-1997, considered the details filed in paper book, containing 425 pages and certificate issued by the hospitals. Ld. CIT(A) observed in para 6.2 6.3 as under: 6.2. The learned counsel has filed necessary details enclosing therewith the paper book containing 425 pages and certificates issued by the hospitals. These evidences could not be filed before the AO earlier due to time constraints and voluminous exercise but the same are called for and admitted by exercising power under u/e 46A(4) .of the Income Tax Rules, 1962 in order to decide various grounds of appeal judiciously. A perusal of certificates reveals that some of them are issued in the name of appellant and others in the name of various TPAs. The appellant has contended that the TPAs were earlier issued notices by the department for not deducting tax on payments to hospitals. As per CBDT's Circular, the TPAs requested the hospitals to furnish certificates from their auditors regarding taxes paid. A hospital works with several TPAs and insurance companies and it was not practically possible for the hospitals to provide certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Gujarat High Court in Rishikesh . Apartment Cooperative Housing Society Ltd. (supra) has held that no interest can be charged beyond the F.Y. in which tax was deductible. However, this was a case where assessee claimed refund on account of excess taxes paid within the financial year. After the decision of Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverages Ltd. (supra), there remains no dispute that the interest is required to be charged upto the date of payments made by the deductees. Therefore, the case laws relied upon by the learned counsel are either distinguishable or not applicable in the facts of appellant's case. A perusal of certificates issued b the has ital reveals that there is no specific information as to the payments by way of TDS, advance tax or self assessment tax but general certificates have been issued stating the total taxes paid 'by them on their returned income. Consequently to collect hospital wise information separately for TDS advance tax or self assessment tax is not feasible, in addition to being very-time consuming and voluminous exercise. Even if such exercise is done, the result would not make much difference if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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