The Commissioner Of Income Tax (Tds), Chandigarh v. General Manager, Haryana Roadways, Hisar

ITA No. 18 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 18 of 2010 (O&M) Date of Decision: 5.12.2015 The Commissioner of Income Tax (TDS), Chandigarh Versus ....Appellant. General Manager, Haryana Roadways, Hisar ...Respondent. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Rajiv Sharma, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This order shall dispose of two appeals bearing ITA Nos. 18and 20 of 2010 as according to learned counsel for the parties, commonquestions of law and facts are involved in the appeals. For brevity, thefacts are being extracted from ITA No. 18 of 2010. 2.ITA No. 18 of 2010 has been filed by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 27.5.2009 passed by the Income Tax Appellate Tribunal,Delhi Bench “A”, New Delhi (hereinafter referred to as “the Tribunal”) inITA No. 869/Del/2009 for the assessment year 2006-07, claiming thefollowing substantial questions of law:- 1)Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in law inupholding the order of the CIT(A), deleting thedemand created by the A.O. u/s 201(1) and 201(1A) of the Income Tax Act, 1961 as theassessee failed to deduct tax at source as perthe provisions of section 194C of the Act? 2)Whether on the facts and in the circumstancesof the case, the ld. ITAT is right in law in holdingthat contract was for supply of goods and not acase of executing works contract ignoring theprovisions of section 194C of the Income TaxAct, 1961?of the case, the ld. ITAT is right in law in holdingthat contract was for supply of goods and not acase of executing works contract ignoring theprovisions of section 194C of the Income TaxAct, 1961? 3.Briefly stated, the facts necessary for adjudication of thepresent appeal as narrated therein may be noticed. During the year inquestion, the Income Tax Officer (TDS) had noticed that the assesseehad entered into a contract with Haryana Roadways EngineeringCorporation Ltd. for fabrication of bodies of buses and had failed todeduct tax at source under Section 194C of the Act. The assessee hadpaid an amount of ` 1,96,03,989/- for the Financial Year 2005-06relevant to the assessment year 2006-07 as fabrication charges withoutdeducting tax at source at the rate of 2% plus cess under Section 194Cof the Act. The Income Tax Officer (TDS) vide order dated 29.8.2008(Annexure A-1) under Section 201(1)/201(1A) of the Act finding theassessee in default qua tax deductible, created a demand of ` 5,67,490/-for the financial year 2005-06 relevant to the assessment year 2006-07.Feeling aggrieved, the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [for brevity “the CIT(A)”]. The ITA No. 18 of 2010-3- CIT(A) vide order dated 11.12.2008 (Annexure A-2) allowed the appealof the assessee following the decision of the Tribunal dated 22.7.2008(ITA Nos. 1001 and 1002/CHD/2007) for the assessment years 2004-05and 2005-06 and its own order dated 21.10.2008 (ITA Nos. 79 and80/RTK/08-09) in the case of G.M. Haryana Roadways, Jhajjar. Againstthe order, Annexure A-2, the revenue filed an appeal before the Tribunal.The Tribunal vide order dated 27.5.2009 (Annexure A-3) dismissed theappeal of the revenue following its own order dated 22.7.2008 (ITA Nos.1001 and 1002/CHD/2007) for the assessment years 2004-05 and 2005-06. Hence, the present appeals by the revenue. 4.We have heard learned counsel for the parties. 5.The aforesaid issue in the case of the assessee itself came up before this Court ITA No. 21 of 2010 (Commissioner of Income Tax 4.We have heard learned counsel for the parties. 5.The aforesaid issue in the case of the assessee itself came up before this Court ITA No. 21 of 2010 (Commissioner of Income Tax (TDS), Chandigarh v. General Manager, Haryana Roadways, Hisar)and other connected cases decided on 29.4.2010, wherein this Courthad held that there was no question of any contract between HaryanaRoadways through its Transport Commissioner and Haryana RoadwaysEngineering Corporation Limited when the Haryana Roadways had notpurchased any bus chassis. The case being a simple case of supply ofbuses by the Haryana Roadways Engineering Corporation Limited to theHaryana Roadways, was liable to Sales Tax and VAT. This Court hadrecorded as under:- “Having heard learned counsel for the parties andperusing the paper books with their able assistancewe are of the considered view that there is no merit inthese appeals warranting their admission and thesame are liable to be dismissed. From the categorical findings, it is evident that Haryana Roadways did notpurchase any bus chassis and, therefore, there wasno question of any contract between HaryanaRoadways through its Transport Commissioner andHaryana Roadways Engineering Corporation Limited.It is a simple case of supply of buses by the HaryanaRoadways Engineering Corporation Limited to theHaryana Roadways. The supply of buses as suchhas been subjected to charge of Sales Tax and VAT. We may examine Section 194C(1) of the Act, whichenvisages payment of any sum to any resident forcarrying out any work in pursuance of a contractbetween the contractor and Central or StateGovernment etc. In the present case there is no suchcontract for carrying out any contract nor theexpression 'Contractor' could be imputed to any oneof the parties. Therefore, no question of law muchless a substantive question of law would arise fordetermination of this Court. These appeals are whollywithout merit and the same are dismissed.” 6.In view of the above, substantial questions of law as claimedin these appeals are answered accordingly. Consequently, finding nomerit in both the appeals, the same are also dismissed. (AJAY KUMAR MITTAL) JUDGE December 5, 2015gbs (RAMENDRA JAIN) JUDGE