High Court Of Orissa
Larsen & Toubro Ltd. vs. Income Tax Officer & Ors.
Sections 192, 194C, 201
A.K. Patnaik & B.P. Das, JJ.
Writ Petn. No. 2951 of 2004
13th December, 2004
Counsel Appeared
B.K. Mohanty, for the Petitioner : A.K. Mohapatra, for the Respondents
JUDGMENT
By the court :
Heard Mr. B.K. Mohanty, learned counsel for petitioner, and Mr. A.K. Mohapatra, learned standing counsel for the IT Department.
2. The petitioner, Larsen & Toubro Ltd., has its registered office at Mumbai and regional office at Calcutta. The petitioner also has a project office at Balasore where the petitioner has undertaken some project works through sub-contractors. Under s. 192 of the IT Act, the officers of the petitioner-company are required to deduct income- tax from the salaries payable to its employees and deposit the same in the IT Department. Under s. 194C of the said Act, the officers of the petitioner-company are required to deduct income-tax payable to sub-contractors and deposit the same with the IT Department. Since in respect of the employees and the sub-contractors engaged in the project undertaken by the petitioner at Balasore, deductions as provided in s. 192 and s. 194C of the IT Act, 1961, were not made and deposited within the Income-tax Office at Balasore, the ITO (TDS)-cum-TRO, Balasore, passed an order under s. 201 of the said Act on 25th Feb., 2004, which is extracted hereinbelow :
“Order under s. 201 of the IT Act, 1961 :
In this case TDS verification was made on 23rd Dec., 2003, and you are requested to produce the evidence in support of deposit of the tax deducted at source under s. 194C/192 of the IT Act, 1961, from payments made to contractors/sub-contractors and employees for the financial year 2003-04 till date, to the credit of the Central Government. Sec. 201 enacts payment of simple interest for you as company bound to deduct tax at source and defaulting to do so deduct tax or, after having deducted, defaulting in making payments thereof to the credit of the Central Government as prescribed in s. 200 r/w r. 30 of the IT Rules, 1962.
During the course of verification, it is ascertained that you are making all such payments here at Balasore and accordingly, you are supposed to deposit such amount of tax in the local prescribed bank of Balasore. As you have failed to deposit the tax deducted at source amounting to Rs. 22,74,470 on payment of Rs. 19,94,83,095 during this current financial year 2003-04 till November, 2003, you were asked to explain as to why interest under s. 201(1A) of the IT Act, 1961, should not be charged on you. As no convincing reply is received so far, you are treated as assessee-in-default within the meaning of s. 201 of the IT Act, 1961. Hence, you are hereby directed to deposit the amount of tax along with interest at 15 per cent per annum for the period of default as under :
In case of failure in depositing the said amount of tax and interest within 27th Feb., 2004, you will be liable for penalty proceedings as per the IT Act, 1961. Issue demand notice, challan and copy of this order. (Sd.) K. Naik, ITO (TDS)-cum-TRO, Balasore.”
Aggrieved by the aforesaid order dt. 25th Feb., 2004, passed by the ITO (TDS)-cum-TRO, Balasore, the petitioner has filed this writ petition under Art. 226 of the Constitution with a prayer to quash the same. The petitioner’s case in the writ petition is that such deductions under ss. 192 and 194C of the IT Act, 1961, were being made by the officers of the petitioner-company in respect of salary payable to employees and amounts payable to sub- contractors engaged in the project at Balasore at the regional office of the petitioner-company at Kolkata and the amounts so deducted have been deposited with the Asstt. CIT, Circle-58 (TDS), Kolkata.
In view of the said contention raised by the petitioner in this writ petition, this Court passed an order on 15th March, 2004, calling upon Mr. A.K. Mohapatra, learned standing counsel, IT Department, to obtain instruction as to whether any deductions under ss. 192 and 194C of the IT Act have been made by the regional office of the petitioner-company at Kolkata and the amounts so deducted have been deposited with the IT Department at Kolkata. Thereafter, on 28th June, 2004, this Court again called upon Mr. A.K. Mohapatra, to appraise this Court with an affidavit with all correspondences with regard to such deduction and deposit under ss. 192 and 194C of the IT Act at Kolkata. Pursuant to the aforesaid order passed by this Court, an affidavit has been filed before us today by one Sri C. Deepak Singh, holding the charge of Asstt. CIT, Circle-58 (TDS), Kolkata, which is to the following effect. “Affidavit I, Sri C. Deepak Singh S/o Sri Amuba Singh holding the charge of Asstt. CIT, Circle-58 (TDS), Kolkata, AO of Larsen & Toubro Ltd., having Kolkata regional office at Park Plaza, 71, Park Street, Kolkata-16, solemnly affirm and declare. 1. That Larsen & Toubro Ltd., has deducted and deposited tax at source at Kolkata on salary and sub-contractors payments made at Balasore, Orissa, during the period 1st April, 2003 to 30th Nov., 2003, the TDS amounts being as under : Section under IT Act Amounts deducted and deposited (Rs.) 192 4,52,316 194C 24,74,470 That Larsen & Toubro Ltd., is having TAN as CALL00263E obtained from Kolkata for depositing TDS. That in view of Circular No. 719 dt. 22nd Aug., 1995 and Circular No. 744 dt. 6th May, 1996 issued by CBDT, New Delhi, the above deposits of TDS made at Kolkata are in order.
The above statement is true to the best of my knowledge and belief. (SD.) C. Deepak Singh, Asstt. CIT, Circle-58 (TDS), Kolkata.”
It is clear from the aforesaid affidavit that deductions both under ss. 192 and 194C in respect of the salary and sub-contractors payments made at Balasore, Orissa, within the period from 1st April, 2003 to 30th Nov., 2003, have been made by the officers of the petitioner-company in the Kolkata regional office and have been deposited with the Asstt. CIT, Circle-58 (TDS), Kolkata. It is also clear from the aforesaid affidavit that the deductions and the deposits are in accordance with Circular No. 719, dt. 22nd Aug., 1995 [(1995) 127 CTR (St) 57] and Circular No. 744, dt. 6th May, 1996 [(1996) 132 CTR (St) 10], issued by the CBDT, New Delhi. Obviously, deductions under ss. 192 and 194C in respect of salary and sub-contractors payments can be made and deposited with one officer and not with two officers. It appears from the aforesaid affidavit filed by the officer holding the charge of Asstt. CIT, Circle-58 (TDS), Kolkata, that as per the two circulars of the CBDT, New Delhi, the deductions and deposits under ss. 192 and 194C with the aforesaid officers at Kolkata out of salary and sub-contractors payments made at Balasore, Orissa, are in order. Hence, such deductions and deposits under ss. 192 and 194C from salary and sub-contractors deductions (sic-payments) made at Balasore, Orissa, were not required to be made at Balasore and deposited within the Income-tax Office, TDS, at Balasore.
For this reason, the impugned order dt. 25th Feb., 2004, passed by the ITO (TDS)-cum-TRO, Balasore, is quashed and the amount realised by the ITO (TDS)-cum-TRO, Balasore, pursuant to the said order dt. 25th Feb., 2004, will be refunded to the petitioner together with the interest as payable under the Act by 31st March, 2005.
The writ petition is accordingly disposed of.
[Citation : 278 ITR 369]
