K.L. Manjunath, J.
1. The assessee is challenging the legality and correctness of the order dated May 31, 2002, passed by the Income-tax Appellate Tribunal, Bangalore in I.T.A. Nos. 678, 679, 680, 682, 683, 684, 685, 686, 687 and 688/Bang/1998 for the assessment years 1995-96. 1996-97, 1996-97, 1994-95, 1995-96, 1996-97, 1996-97, 1997-98, 1997-98 and 1995-96, raising the following substantial questions of law:
1. Whether the appellant falls under the definition of person responsible for deduction of tax at source in terms of Section 204 of the Income-tax Act, 1961?
2. Whether the Tribunal is justified in not holding that the appellant is an AOP within the meaning of Section 2(31) of the Act and assessable as individual and consequently not liable for deduction of tax at source under Section 194C/194-I of the Act?
3. Whether the Tribunal is justified in law in confirming the orders under Section 201(1) of the Income-tax Act when the same has been passed on the secretary/chairman and not on the society?
4. Whether the provision of Section 194C/194-I read with Section 204(iii) of the Income-tax Act are applicable to the appellant-society?
5. Whether the Tribunal is justified in holding that purchase of stationery attracts the provisions of Section 194C of the Income-tax Act?
6. Whether the Tribunal is justified in law in holding that the provision of Section 194-I of the Income-tax Act are applicable when the payments in excess of Rs. 1,20,000 is paid to a family as a whole and not to one individual.
7. Whether the Tribunal is justified in not giving its finding on the specific ground on the validity of levy of interest under Section 201(1A) of the Act under the facts and circumstances of the appellant's case?
8. Whether the Tribunal is justified in confirming the penalty under Section 271C when the appellant was under the bona fide belief that it is not liable for deduction of tax at source?
9. Whether the bona fide belief of the appellant that they were not within the purview of Sections 194C and 194-I of the Income-tax Act constitute reasonable cause for cancelling the penalty under Section 271C of the Income-tax Act, 1961?
2. The facts of this case are as hereunder:
3. The appellant is running an educational institution and the appellant-society is registered under the provisions of the Karnataka Societies Registration Act, 1960. The assessee during the course of its business is required to pay rents to the building owners and to several other persons in connection with its business. Though such payments were made, the TDS was not recovered from the payments. Therefore, proceedings were initiated under Section 201(1) and 201(1A) of the Income-tax Act on the ground that the assessee has failed to recover tax as deduction at source. The contention of the assessee is that it is a society and not a company or a juridical person and, therefore, it is contended that the assessee was not required to deduct the tax at source and requested the Assessing Officer to drop the proceedings. It is also contended that the payees to whom the payments were made by the assessee in their returns of income have shown the payments and have paid the tax on their income. Therefore, there is no violation of the provisions of Section 201(1) of the Income-tax Act.
4. The Assessing Officer rejected the contention of the assessee and held that the assessee was required to deduct the tax at source and for non-deducting tax at source is required to pay the interest, as well as penalty apart from the tax to be deducted at source. This order was questioned by the appellant before the Commissioner of Income-tax (Appeals), which appeals came to be dismissed. Aggrieved by the concurrent findings, the assessee filed appeals before the Income-tax Appellate Tribunal, Bangalore. Bench, which appeals also came to be dismissed. Challenging the legality and correctness of the said orders, the present appeals are preferred by the assessee.
5. We have heard the learned Counsel for the parties.
6. Mr. Shankar, learned Counsel for the appellant, at the outset submits that in view of the judgment of the Supreme Court in Hindustan Coca Cola Beverage P. Ltd. v. CIT : [2007] 293 ITR 226 has ruled that if the payee has paid the tax, even though the assessee failed to deduct tax, the tax cannot be recovered once again from the assessee as it amounts to double collection of tax. Relying upon the said judgment, he submits that since this aspect of the matter has not been considered by the officer, he requests the court to remand the matter to the Assessing Officer by setting aside all the orders. He further submits that in the instant case, he will not press the question as to whether the assessee as a registered association under the provisions of the Karnataka Societies Registration Act, 1960, is required to deduct the tax at source or not and the said question can be left open giving liberty to challenge the same at an appropriate proceedings but not in these proceedings.
7. Learned Counsel for the Revenue submits that in view of the judgment, in Hindustan Coca Cola Beverage P. Ltd. : [2007] 293 ITR 226, there was no occasion for the Assessing Officer to consider the collection of tax again from the present assessee.
8. In view of the submission of the learned Counsel for the parties, we are of the opinion that all the orders, namely, the orders passed by the Assessing Officer which have been confirmed by the Commissioner of Income-tax (Appeals), and the Income-tax Appellate Tribunal, Bangalore Bench, are required to be set aside and the matters are required to be re-considered by the Assessing Officer in the light of the judgment of the Supreme Court in Hindustan Coca Cola Beverage P. Ltd. : [2007] 293 ITR 226, on the merits after hearing both the parties and liberty is also granted to the Assessing Officer to consider the levy of interest and penalty on the merits. All the questions are kept open. However, it is made clear that the assessee, in the present case, shall raise the question that whether the assessee being an association under the provisions of the Karnataka Societies Registration Act is liable to collect tax at source. Ordered accordingly.