The Deputy Collector, Disaster Management Branch, Patna v. The Union Of India

20.01.2011 IN THE HIGH COURT OF JUDICATURE AT PATNA MISC. APPEAL No.260 OF 2008 ====================================================== 1.The District Magistrate, Collectorate, Patna. 2.The Deputy Collector, Disaster Management Branch, Patna …………………….. Appellants Versus 1.The Union Of India through the Commissioner of Income Tax, Bihar, Patna Bihar, Patna 2.The Income Tax Appellate Tribunal, Patna Branch, Patna 3.The Commissioner of Income Tax (Appeals)-II, Patna 4.The Deputy Commissioner of Income Tax TDS Circle, Patna. ………………………. Respondents ====================================================== Appearance: For the Appellants: Ms. Nilu Agrawal, Advocate For the Respondents: Mr. Harshwardhan, Advocate & Ms. Archana Sinha, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE AND HONOURABLE MR. JUSTICE JYOTI SARAN ORAL JUDGMENT(Per: HONOURABLE THE CHIEF JUSTICE) This appeal under Section 260A of the Income Tax Act, 1961 is preferred by the District Magistrate, Patna and another against the coercive action taken by the respondent No.4, the Deputy Commissioner of Income Tax, TDS Circle, Patna in recovering the amount of Rs. 45,05,536/- being the amount of tax deductible at source and the interest thereon. It appears that the then District Magistrate, Patna awarded a contract for supply and distribution of relief materials worth Rs. 17,80,00,000/- to one M/s Baba Satya Sai Enterprises (BSSI) during financial year 2004-05 relevant to the assessment year 2005-06. According to the Income Tax Department, the said was a works contract exigible to income tax. The District Magistrate was, therefore, liable to deduct the income tax at source. He, however, failed to discharge his obligation. Therefore, the coercive recovery. While admitting the Appeal this Court has framed following substantial questions of law. “(A) Whether the Income Tax Appellate Tribunal was justified in upholding the findings recorded by the Commissioner of Income Tax (Appeals)-II, Patna to the effect that the contract was a composite contract consisting of contract for work to invite the liability for committing default for non-deduction of tax under Section 194 C of the Act? (B) Whether there has been actually a contract in existence and, if not so, whether the provision enshrined under Section 194 C of the Act gets attracted?” We have heard learned advocates extensively. Learned Advocate Ms. Nilu Agrawal has appeared for the appellants. She has strenuously urged that the matter involves a dispute between the agency of the Central Government namely the Income Tax Department and the agency of the State Government namely the District Magistrate. The matter could have been resolved amicably, instead the Income Tax Department resorted to coercive measures of sealing the bank account of the District Magistrate and of recovering the amount from the outstanding balance in the said bank account. Ms. Agrawal has not been able to satisfy us that the contract in question was a contract for supply of goods and was not a composite contract as held by the authorities and the Tribunal below. In absence of a substantial question of law raised in the present Appeal, the Appeal is not maintainable. For the aforesaid reason, the Appeal is disposed of. The parties will bear their own cost. ( R.M. Doshit, CJ.) (Jyoti Saran, J.)