D.b. Income Tax Appeal v. M/S Compucom Softwares Ltd

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR D.B. Income Tax Appeal No.124/2012Commissioner of Income Tax, Jaipur-II, Jaipurv. M/s Compucom Softwares Ltd Date of order 30.7.2015 Hon'ble Mr. Justice Ajay RastogiHon'ble Mr. Justice J.K. Ranka Mr. Nikhil Simlote, for appellantMr. Sandip Taneja, for respondent By the Court (per J.K. Ranka, J.) 1.This appeal under Section 260A of the Income Tax Act (for short'the Act') is directed against the order dated 21.10.2011 passed by theDivision Bench of ITAT, and is relevant for the assessment year 2007-08. 2.Brief facts for disposal of the present appeal, are that therespondent-assessee is a Public Limited company and is derivingincome by way of export of computer software, imparting computereducation in schools, and income from power generation. A surveycame to be ordered on the business premises of the respondent-assesseeon 14.9.2009, and it was noticed that though the assessee had paid hugeamount to various contractors and sub-contractors, but did not deduct tax at source, and during the course of survey, statement of the Directorwas recorded who had stated that since they were not aware of theprovisions of tax to be deducted at source, and finding this fact andadmission by the Director, the Assessing Officer issued a show causenotice as to why addition/disallowance be not made of the entireamount claimed as expense on which tax was not deducted at source. 3.The assessee filed replies, however, the Assessing Officer beingnot satisfied with the explanation so offered, made an addition ofRs.84,56,827/- which was the amount claimed as expenditure onwhich, as per AO, tax was not deducted at source. 4.The assessee carried the matter in appeal before theCommissioner of Income Tax (Appeals), who after perusing thematerial on record found that the assessee had already deducted tax atsource on an amount of Rs.6,05,44,205/- at the prescribed rate underSection 194(c) of the Act which though came to the extent ofRs.6,23,605/-, however, the assessee deducted and deposited in theGovernment treasury an amount of Rs.6,49,547/- as tax deducted atsource. Receipted challans of having deposited tax at Rs.6,49,547/-were placed before CIT(A). The CIT(A) being satisfied, deleted theaddition. The Revenue carried the matter in appeal before the Tribunal, who also found that CIT(A) had rightly considered that tax had beendeducted and deposited in the Government treasury and the Tribunalfinding that the challan had already been placed by the assessee beforethe CIT(A), who had verified the same, therefore, dismissed the appealof the revenue. However, the Tribunal also observed that, if the factwas found incorrect, then the Department can take recourse for makingaddition in accordance with law. 5.Counsel for the revenue contended that the finding of theTribunal is perverse as no independent finding has been recorded by itand whatever was noticed by CIT(A), has been accepted without anyreasoning. He contended that altogether new case was made out beforethe CIT(A) and as to how figure of Rs.6,05,44,205/- came to be statedand considered, and in what manner TDS on it came to Rs.6,23,605/-and how it is claimed by the assessee that he had deposited moreamount at Rs.6,49,547/- as against Rs.6,23,605 and all claim was putforward before the CIT(A) and no opportunity was granted to theAssessing Officer to look into the said facts and, therefore, theAssessing Officer was the correct authority to have gone into the issue.He contended that the matter ought to have been restored to theAssessing Officer. He also contended that order of the Tribunal isperverse and substantial questions of law arise out of the order of Tribunal which requires consideration. Tribunal which requires consideration. 6.We have heard the arguments advanced by the counsel for therevenue, and we are of the view that when material has been placed onrecord before the CIT(A) who has gone into the issue elaborately and itis a finding of fact recorded by the CIT(A) that tax was deducted atsource and was deposited in the Government treasury by the assessee,and even the Tribunal found that the material considered by CIT(A)was proper, and did not interfere in the order of CIT(A). However, arider was given to the Assessing Officer that in case the claim of theassessee was found to be not proper about the tax having been deductedand deposited into the Government treasury, the Assessing Officer wasfree to initiate proceedings in accordance with law. 7.In view of what has been noticed by the appellate authorities, inour view as well, the issue has been decided based on the materialplaced on record by the assessee before the appellate authorities whichhas gone into by both the appellate authorities, and it being essentiallya finding of fact, in our view no question much less substantialquestion of law can be said to arise out of the order of Tribunal.However, while dismissing the appeal we direct the Assessing Officerand give liberty to check and verify correctness of the claim as to whether the tax had been deducted and deposited in the Governmenttreasury account, which was claimed on the payment of Rs.84,56,827/-, and the Assessing Officer is at liberty to initiate proceedings, in casenot satisfied with the claim put forward before the appellate authorities,in accordance with law. (J.K. Ranka) J. (Ajay Rastogi) J. db69 [All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.]Deepankar Bhattacharya PS