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TMI Blog2015 (7) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... ct only because the deductee (RSAMB) is registered u/s 12A of the I.T. Act and its income is exempt from tax. 2. The ld. CIT (A) has erred in holding that the provisions of the section 194J of the I.T. Act were not applicable in respect of the payments made by the assessee to RSAMB, on account of statutory contribution, against which the assessee received professional and technical services from RSAMB." 2. The facts in all the three appeals are similar and relates to same assessee, therefore, for the sake of convenience we dispose off these appeals by this consolidated order. Brief facts of the case are that the Assessing Officer observed that the responsible person for deduction of tax, the Secretary, Krishi Upaj Mandi Samiti (KUMS), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -deduction of tax and as per provisions of Sec. 201(1A) of the Act, if the Responsible person is failed to deduct the whole or any part of tax or after deducting fails to pay the tax in accordance with this section, the Responsible person is liable to pay simple interest @ 12% per annum. He worked out the demand payable u/s 201(1)/194C at Rs. 2,96,370/-, u/s 201(1)/194J at Rs. 20,78,300/- and u/s 201(1A)/194C & 194J at Rs. 7,75,490/- for the F.Y. 2005-06 (A.Y. 2006-06), F.Y. 2008-09 (A.Y. 2009-10) and F.Y. 2009- 10 (A.Y. 2010-11) totaling Rs. 31,50,160/-. 3. Being aggrieved, the assessee carried the matter to the ld. CIT (A). The assessee vide letter dated 01.01.2013 made a detailed written submissions, which have been incorporated at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y makes payment to Executive Engineer, RSAMB for repair, maintenance and construction of roads & buildings. The assessee claimed that there was no contractorcontractee relationship between the assessee and RSAMB. However, in my opinion it is not necessary that any contract has to be in writing, the contract can be in the form of oral understanding also. In the instant case, there were sufficient material on record to suggest that there was broad understanding between RSAMB and various Krishi Upaj Mandi Samities to construct & maintain roads etc. and to share the expenses. Clearly such arrangement has to be treated as a contractual arrangement and therefore, these payments were clearly covered by section 194C as these payments were made for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (as on the returned income there was Nil tax liability). M/s. RSAMB was registered u/s 12A and its income was otherwise also exempt u/s 12A. In view of the above, I am of the opinion that as there was no tax liability on the deductee (RSAMB) on its returned income, the deductor (assessee) cannot be treated as an assessee in default. My view is supported by the judgment of Hon'ble Allahabad High Court (21 Taxmann.com 489 All.) The Hon'ble ITAT Kolkata Bench in Ramakrishna Vedanta Math v. ITO (2012) in ITA 477, 478 & 479/Kol/2012 has held as under :- "As far as recovery provisions are concerned, these provisions are set out in section 201(1) which seeks to make good any loss to revenue on account of lapse by the assessee tax dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the assessee cannot be treated as an assessee in default. The A.O. is directed to delete the demand raised u/s 201(1) & 201(1A)." 5. Now the Revenue is in appeal before us. We have heard both the parties and considered the material on record. The facts of the present case are similar to the facts involved in the case of ITO vs. The Secretary, Krishi Upaj Mandi Samiti, Baran in ITA Nos. 216 to 220/JP/2013 for the A.Ys. 2006-07 to 2010-11 dated 27.01.2014. Since the present case is covered by the above decision of the ITAT, Jaipur Bench, Jaipur, so respectfully following the aforesaid order dated 27.01.2014, we do not see any infirmity in the orders of ld. CIT (A). Accordingly, we do not find any merit in the departmental appeals a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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