Wp/13446/2021 Of Govt. Chandra Vijay College v. Office Of The Income Tax Officer (Tds 2)

IN THE HIGH COURT OF MADHYA PRADESHAT JABALPURBEFORE HON'BLE SHRI JUSTICE SHEEL NAGU & HON’BLE SHRI JUSTICE ARUN KUMAR SHARMA WP. No.13421 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAX OFFICERTHROUGH INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13429 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) WP. No.13421 of 2021 & connected matters - 2 - .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THROUGH INCOME TAXOFFICER (TDS-2,) C.R. BUILDINGROOM NO. 102, ANNXE BUILDING,NAPIER TOWN JABALPUR (MADHYAPRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13438 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT WP. No.13421 of 2021 & connected matters - 3 - (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13441 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13445 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER WP. No.13421 of 2021 & connected matters - 4 - (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13446 of 2021 Between:-GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) WP. No.13421 of 2021 & connected matters - 5 - WP. No.13480 of 2021 Between:- GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) ----------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- Per: Sheel Nagu, J. ORDER WP. No.13421 of 2021 & connected matters - 5 - WP. No.13480 of 2021 Between:- GOVT. CHANDRA VIJAY COLLEGETHROUGH ITS PRINCIPAL DR. S.K.BARMAN,HIGHEREDUCATIONDEPARTMENT, DISTRICT DINDORI(MADHYA PRADESH) .....PETITIONER (BY SHRI ASHISH ANAND BARNARD, ADDITIONALADVOCATE GENERAL) AND OFFICE OF THE INCOME TAXOFFICER THR INCOME TAX OFFICER(TDS-2,) C.R. BUILDING ROOM NO. 102,ANNXE BUILDING, NAPIER TOWNJABALPUR MP (MADHYA PRADESH) .....RESPONDENT (BY SHRI SANJAY LAL, ADVOCATE) ----------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- Per: Sheel Nagu, J. ORDER This common order shall govern the disposal of WP. Nos.13421/2021, 13429/2021, 13438/2021, 13441/2021, 13445/2021,13446/2021 and 13480/2021. WP. No.13421 of 2021 & connected matters - 6 - 2.Present petitions filed under Article 226 by a government collegeseeks quashment of order dated 17.02.2020 (Annexure P/1) by therespondent by which penalty u/S.201 of Income-Tax, 1961 (for brevity“Act of 1961”) is imposed on the ground of petitioner-college havingfailed to deduct tax at source in regard to payment made by way ofhonorarium to Guest Faculty Lecturers for the assessment year 2017-18. 3.Learned counsel for the rival parties are heard on the question ofadmission so also on final disposal. 4. Indisputably, the statutory remedy of appeal u/S.246 of Act of 1961is available to the petitioner to be availed. However, Shri Barnard,learned State counsel for the petitioner submits that in view of undisputedfacts involved of the Guest Faculty Lecturers neither falling undertechnical service nor professional service as per Section 194J of Act of1961, the statutory remedy of appeal though available is not efficacious,and therefore, grievance raised herein can very well be adjudicated underArticle 226 of the Constitution. In support, learned State counsel reliesupon recent decision of Apex Court in the case of Magadh Sugar &Energy Ltd. vs. State of Bihar& others reported in 2021 S[CC Online601. 5.Per contra, learned counsel for the respondent/Revenue by filingreply relies upon decision of High Court of Punjab and Haryana in thecase of C.I.T. (TDS) Chandigarh vs. D.A.V. College rendered in an ITappeal u/S.260A of Act of 1961 whereby following substantial questionsof law were framed :- WP. No.13421 of 2021 & connected matters - 7 - (i) Whether on the facts and circumstances of the case and inlaw, the Ld. ITAT was justified in holding that the relation withGuest Faculty (professional teaching staff) is equivalent innature to an employer/employee relationship when there was noagreement/appointment or employer-employee relationshipbetween the parties and that the Guest Faculties were merelyprofessionals and therefore Section 194J of the Act wasapplicable ? (ii) Whether on the facts and in the circumstances of the case,the learned ITAT has erred in recognizing the payments made toGuest Faculty, who rendered professional services to thecollege, as per the provisions of Section 192 of the Income TaxAct, 1961 instead of Section 194J of the Income Tax Act, 1961 ? (iii) Whether on the facts and in the circumstances of the case,the Ld. ITAT is right in law in holding that there existed anemployer-employee relationship between the Guest Facultyteachers and the College and the assessee-college is not liableto make deduction of tax at source u/s.194J of the Income Tax,1961 ? (iv) Whether on the facts and in the circumstances of the casethe findings recorded by the Ld. ITAT are perverse and contraryto the material available on record and not sustainable in theeyes of law ? (iii) Whether on the facts and in the circumstances of the case,the Ld. ITAT is right in law in holding that there existed anemployer-employee relationship between the Guest Facultyteachers and the College and the assessee-college is not liableto make deduction of tax at source u/s.194J of the Income Tax,1961 ? (iv) Whether on the facts and in the circumstances of the casethe findings recorded by the Ld. ITAT are perverse and contraryto the material available on record and not sustainable in theeyes of law ? 6.After adjudication of appeal, High Court of Punjab & Haryanaremanded the matter to the Tribunal to decide the question as to whetheragreement between college-assessee and Guest Faculty Lecturers was a“contract for service” or a “contract of service”. While so remanding thematter, High Court of Punjab & Haryana held that adjudication ofaforesaid questions requires going into disputed questions of fact which - 8 - ought to be left for the fact finding Authority i.e. the Appellate Authorityand the Tribunal constituted under the Income Tax Act. 6.1Armed with the aforesaid decision of High Court of Punjab &Haryana, learned counsel for the respondent/Revenue contends thatdisputed questions of fact are involved, which would require adducing ofevidence before coming to a finding whether relationship between thepetitioner-college and the Guest Faculty Lecturers would satisfy the pre-requisites of professional service oör technical service contemplated bySection 194J of Act of 1961. It is submitted by learned counsel for therespondent/Revenue that this exercise ought not to be gone into in writjurisdiction especially when the alternative efficacious statutory remedyof appeal is available to be availed. 7.After having heard learned counsel for the rival parties and havingperused the material on record and the provisions of Section 194J of Actof 1961, this Court is of the considered view that to ascertain the realobject and import of the relationship between petitioner-college andGuest Faculty Lecturers and as to whether Guest Faculty Lecturers on theanvil of Section 194J of Act of 1961 for the purpose of T.D.S., disputedquestions of fact will have to be gone into. It is trite law that writjurisdiction ought not to be exercised when disputed questions of fact areinvolved and the relevant statute provides for an alternative efficaciousremedy. Petitioner has not availed the alternative efficacious statutoryremedy of appeal u/S.246 of Act of 1961 before Commissioner (Appeals). WP. No.13421 of 2021 & connected matters - 9 - 8.More so, this Court do not see any apparent jurisdictional error inthe order of Assessing Authority (Annexure P/1), and therefore, none ofthe exceptions laid down in the decision of Apex Court in the case ofWhirlpool Corporation vs. Registrar of Trademarks, Mumbai reportedin (1998) 8 SCC 1 can come to the rescue of petitioner-college. 9.Since an interim order was passed by this Court on 02.08.2021,which continues to subsist till date, this Court grants 45 days’ time topetitioner-college to approach the Appellate Authority u/S.246 of Act of1961 and till then the interim order passed by this Court on 02.08.2021shall continue to subsists. 9.1.However, it is made clear that continuance of interim order is mademerely to enable the petitioner to approach the appropriate appellateForum and not to prejudice the mind of Appellate Authority, who is freeto adjudicate the appeal on admission as well as on interim relief withoutbeing influenced by this order. 9.2. It is further made clear that if no appeal is filed within aforesaidperiod of 45 days, then Revenue shall be free to execute the impugnedassessment order. 10.With the aforesaid observations, these petitions stand disposed of. (SHEEL NAGU) (ARUN KUMAR SHARMA) JUDGE JUDGE mohsin