Conservator of Forest and Field Tiger Project Sariska Vs ITO (ITAT Jaipur)
ITAT Jaipur held that requirement of TDS deduction u/s. 194C of the Income Tax Act on payments made to Eco Development Committee remanded back to AO with a direction to relook on various aspects.
Facts- The assessee deductor is State Government i.e. Conservator of Forest & Field Director, Tiger Project, Sariska, Alwar in the spot verification u/s. 133A(2A) was conducted on 18.11.2015 and required details were called for. After verification of details filed, the original order u/s. 201(1)/201(1A) was passed on 06.06.2018 determining the total tax liability including interest of Rs. 44,43,240/-.
During the course of verification it was found that the payments are being made for civil construction work relating to environmental development, forestation, forest development, buffer area development etc. through Eco Development Committees (hereinafter referred as EDCs). The EDCs are the bodies registered with the forest department and are mainly constituted of local villagers and with one representative of Forest Department. The work completed through the EDCs includes construction and maintenance of roads, anicuts and enclosures etc. No TDS is being made on such payments made to various EDCs.
AO alleging non-deduction of TDS determined total tax liability including interest of Rs. 44,43,240/-. CIT(A) dismissed the appeal.
Limited issue involved here is whether the assessee is liable to deduct the tax on the payments made to these EDCs or not.
Conclusion- Held that the matter is again required to be set aside to the file of the ld. AO to deal with these facets of the case and thereby to decide the issue as the assessee has categorically submitted that there is no contract with the EDCs, they are working with no profit no loss and their income are not chargeable to tax and considering that aspect of the matter the ld. AO be directed to relook all the aspect as argued and decide by passing a speaking order the TDS liability if any or not. Based on these observations we are of the considered view that the assessee is deprived of justice on the issue as discussed and argued by the ld. AR of the assessee. Based on these set of facts we are inclined to accept the request of the ld. AR of the assessee to set aside the case to the file of the ld. AO, so as to decide the case of the assessee after giving proper opportunity of being heard to the assessee. At the same time, the assessee is directed to represent and present all the facts before the ld. AO and should not ask for adjournment of trifles grounds. At this stage, we remand back the matter without commenting upon the merits of the case and ld. AO is directed to pass a speaking order in accordance with law.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
These eight appeals are filed by the assessee aggrieved from the order of the National Faceless Appeal Centre (NFAC), Delhi [ Here in after referred as “NFAC/ld.CIT(A)” ] for the assessment years 2016-17, 2009-10, 2010-11 to 2015-16 dated 29/09/2022 which in turn arises from the order of the ITO, TDS, Alwar passed under Section 201(1)/201(1A) of the Income tax Act, 1961 (in short ‘the Act’) dated 13.01.2021.
2. At the outset of hearing, the Bench observed that there is delay of 232 days in filing of the present appeal by the assessee and in support filed a petition for condonation of delay with following prayers:
“SUB: APPLICATION REGARDING CONDONATION OF DELAY IN FILING THE APPEAL AGAINST THE ORDER PASSED BY THE HON’BLE COMMISSIONER OF INCOME TAX (CIT) APPEALS, NATIONAL FACELESS (NFAC) DATED 29.09.2022 FOR THE ASSESSMENT YEAR 2009-10.
Most respectfully, this humble petition showeth as under:
1. That the above appeal has been filed against the order of the Ld. Commissioner of Income Tax (Appeals) ITBA/NFAC/S/250/2022- 23/1046104508(1) Dated 29.09.2022.
2. That the said Appellate order was served on the assessee on 29.09.2022 and as such the last date for filing the appeal was 29. 11.2022.
3. That, an appeal is being filed before Your Honor for AY 2009-10 with the delay of 5 months & 12 days.
4. The reason of late filing was that as the applicant is a Department and we have to follow various procedures which takes so much times. All the relevant dates and procedure have been mentioned in the List of Dates and Events enclosed herewith and marked as Annexure A.
5. That only due to all these reason the appeal could not be filed within time.
6. That the contents or averment of application for condonation of delay are true and correct.”
3. On this issue during hearing, the ld. DR objected to assessee’s application for condonation of delay stating that 232 days delay is not considerable as genuine and the reasons is Cobble up to show the genuine reasons against the lapses on the part of the assessee. The ld. DR also pointed out that the assessee is in the second round of litigation and therefore, considering that aspect of the matter, the delay is not properly justified by the assessee. But since the assessee is one of the government agencies bench may take appropriate view in the matter as deem fit in the interest of justice.
4. We have heard the contention of the parties and perused the materials available on The prayer by the assessee for condonation of delay of 232 days ( 5 months and 12 days ) because the assessee is a government department and before raising the appeal has to take financial as well as administrative approval of higher authority. The order has been passed on 29.09.2022 and the effect of the covid 19 was becoming normal. The reasons advanced are sufficient to condone the delay and the assessee has the follow up in the form of the office order to support the contention raised in the condonation petition. Thus, the delay of 232 days in filing the present appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause and therefore, we admit this appeal.
5. Admitting the appeal of the assessee, on merits moving further, the ld. AR submitted that the matter pertaining to Conservator of Forest and Field Director, Tiger Project Sariska in ITA 450/JPR/2023 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical except the difference in the amount in other assessment year. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 450/JPR/2023 is taken as a lead case.
6. In the lead case ITA No. 450/JP/2023 the assessee has assailed the appeal in on the following grounds;
“1. That the Ld. Commissioner of Income Tax (Appeals) erred in law as well as on facts and in the circumstances of the case while confirming the following demand for non-deduction of TDS under section 194 (C) on payment made to Eco Development Committee (EDC) and passed the impugned order under sections 201 (1) and 201(1A).
