M/s Sea Hath Canning Company., Margao V. The Income Tax Officer, Ward-4, Margao., Margao

CO 14/PAN/2016

• Counselvise Citation: [2016] 119 COUNSELVISE.COM (IT) 3289 (ITAT-PANAJI)
• Duration Of Justice: 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRADEEP KULKARNI
• Keywords: Reasonable cause
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 37 /P A N/201 6 (ASST. YEAR : 20 12 - 1 3 ) ITO, WARD - 4, MARGAO GOA. VS. M/S. SEA HATH CANNING COMPANY , PLOT NO.8, MARGAO INDUSTRIAL ESTATE, POST CURTORM, ST. JOSE DE AREAL, SALCETE GOA. PAN NO. AAGFS 4960 H (APPELLANT) (RESPONDENT) C.O. NO. 14/PAN/2016 ( ITA NO. 37 /P A N/201 6) (ASST. YEAR : 20 12 - 1 3 ) M/S. SEA HATH CANNING COMPANY, PLOT NO.8, MARGAO INDUSTRIAL ESTATE, POST CURTORM, ST. JOSE DE AREAL, SALCETE GOA. VS. ITO, WARD - 4, MARGAO GOA. PAN NO. AAGFS 4960 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRADEEP KULKARNI C A DEPARTMENT BY : SHRI R.N. SIDDAPPAJI - DR DATE OF HEARING : 1 0 / 0 5 /201 6 . DATE OF PRONOUNCEMENT : 1 0 / 0 5 /201 6 . O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 37/PAN/2016 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , PANAJI - 1 IN APPEAL NO. 123/CIT(A)PNJ - 1/15 - 16 , DATED 2 8 / 12 /201 5 . 2 ITA NO. 37 /P A N/201 6 & C.O.NO. 14/PAN/2016 C.O.NO. 14/PNJ/2016 IS A CROSS OBJECTION FILED BY THE ASSESSEE IN THE REVENUES APPEAL IN ITA NO. 37/PAN/2016. 2. SHRI R.N. SIDDAPPAJI, DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF THE REVENUE AND SHRI PRADEEP KULKARNI, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3 . AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT ASSESSEE DID NOT WISH TO PRESS THE CROSS OBJECTION. CONSEQUENTLY, THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. 4 . IN REGARD TO REVENUES APPEAL, IT WAS SUBMITTED BY THE DEPARTMENTAL REPRESENTATIVE THAT THE ASSESSEE IS A N EXPORTER OF FISH AND FISH PRODUCTS . IT WAS THE SUBMISSION THAT THE ASSESSEE PURCHASED FISH AND FISH PRODUCTS FROM VARIOUS PERSONS IN CASH. THE DEPARTMENTAL REPRESENTATIVE DREW OUR ATTENTION TO PAGE NO.2 OF THE ASSESSMENT ORDER , WHERE IN THE CHART, THE ASSESSING OFFICER HAS EXTRACTED THE PERSONS , FROM WHOM THE ASSESSEE HAS PURCHASED THE FISH AND FISH PRODUCTS. IT WAS THE SUBMISSION THAT THE ASSESSEE HAS ALSO PURCHASED FISH AND FISH PRODUCTS FROM THE SAID PERSONS BY CHEQUE. IT WAS THE SUBMISSION THAT AS THE ASSESSEE HAD NOT SHOWN REASONABLE CAUSE FOR MAKING THE PURCHASES OF FISH AND FISH PRODUCTS FROM THE SAID PERSONS , IN CASH, THE ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND HAD BROUGHT TO TAX THE CASH PURCHASES FROM THE SAID PERSONS. T HE DEPARTMENTAL REPRESENTAT IVE DREW OUR ATTENTION TO CIRCULAR ISSUED BY THE CBDT IN CIRCULAR NO.10/2008 , DATED 05/12/2008 , WHICH SPECIFIES THAT THE PRODUCERS OF FISH OR FISH PRODUCTS WOULD INCLUDE, BESIDES THE FISHERMEN, ANY HEADMAN OF FISHERMEN, WHO SORTS THE CATCH OF FISH BROUGHT BY FISHERMEN FROM THE SEA, AT THE SEA - SHORE ITSELF AND THEN SELLS THE FISH OR FISH PRODUCTS TO TRADERS, EXPORTERS , ETC. IT WAS THE 3 ITA NO. 37 /P A N/201 6 & C.O.NO. 14/PAN/2016 FURTHER SUBMISSION THAT THE ABOVE EXCEPTION WAS NOT AVAILABLE ON THE PAYM ENT FOR THE PURCHASE OF FISH OR FISH PRODUCTS , FROM A PERSON , WHO IS NOT PROVED TO BE A PRODUCER OF THESE GOODS AND IS ONLY A TRADER, BROKER OR ANY OTHER MIDDLEMAN, BY WHATEVER NAME CALLED. IT WAS THE SUBMISSION THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAD DELETED THE ADD ITION MADE BY THE ASSESSING OFFICER BY HOLD I NG THAT THE EXCEPTION PROVIDED IN RULE 6DD(E) PROVIDED FOR THE EXCEPTION AND IT INCLUDED FISH AND FISH PRODUCTS. IT WAS THE SUBMISSION THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WAS LIABLE TO BE REVERSED , AS THE PERSONS , FROM WHOM THE ASSESSEE HAS PURCHASED THE SAID FISH AND FISH PRODUCTS , AS HAS BEEN IDENTIFIED , ARE NOT THE PRODUCERS OF THE FISH AND FISH PRODUCTS, BUT WERE TRADERS, BROKERS AND OTHER MIDDLEMAN. 5. IN REPLY, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE EXCEPTION PROVIDED IN RULE 6DD(E) OF THE INCOME TAX RULES 1962 DID NOT PROVIDE FOR A PRODUCER OF THE FISH AND FISH PRODUCTS. IT ONLY PROVIDED FOR PURCHASE OF FISH OR FISH PRODUCTS . IT WAS THE SUBMISSION THAT THE CIRCUL A R ISSUED BY THE CBDT WAS NOT BINDING ON THE APPELLATE AUTHORITY AND THAT THE CIRCULAR, INSOFAR AS IT EXCEEDED THE EXEMPTION OR CONTROL THE EXEMPTION PROVIDED IN RULE 6DD(E) OF THE I.T. RULES, 1962 , COULD NOT BE HELD AGAINST THE ASSESSEE. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE PROVISO TO SECTION 40A(3) OF THE ACT SHOWS THAT THE WORDS USED THEREIN, ARE BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. FURTHER, THE PAYMENTS MADE TO THE SAID PERSONS FOR THE PURCHASE OF FISH AND FISH PRODUCTS ARE NOT BOGUS AND THE SAID PERSONS HAVE ALSO RECORDED THE TRANSACTIONS IN THEIR BOOKS AS HAS BEEN ADMITTED BY THE DE PARTMENTAL REPRESENTATIVE. 7 . NOW, COMING TO THE EXEMPTION PROVIDED UNDER RULE 6DD(E) IT SHOWS THAT THE WORD S USED , ARE THE PUR CHASE OF FISH AND FISH PRODUCTS . 4 ITA NO. 37 /P A N/201 6 & C.O.NO. 14/PAN/2016 TH E SAID EXEMPTION IS NOT CONTROLLED IN RESPECT OF PURCHASE OF FISH OR FISH PRODUCTS FROM THE PRODUCERS OF SUCH FISH OR FISH PRODUCTS. IN FACT, THE SAID EXEMPTION DOES NOT CONTAIN THE TERM PRODUCERS. THUS, THE CIRCULAR RELIED UPON BY THE DEPARTMENTAL REPRESENTATIVE IS PUTTING FURTHER CONTROLS IN RESPECT OF EXEMPTION , WHICH HAS NOT BEEN CONTEMPLATED BY THE LEGISLATURE NOR PROVIDED FOR IN THE RULES. A PERUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SHOWS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS APPLIED THE RULE 6DD(E) OF THE RULES, 1962. WHEN THE LANGUAGE OF THE SAID PROVISION IS CLEAR AND UN AMBIGU OUS , THEN IT IS SUCH CLEAR PROVISIONS THAT HAVE TO BE APPLIED AN D AMBIGUITY WHICH IS NOT THERE IN THE RULES, CANNOT BE INTRODUCED INTO THE RULES BY WAY OF A CIRCULAR. THIS BEING SO, WE ARE OF THE VI EW THAT THE FINDING OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS ON RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 8 . IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 1 0 TH DAY OF MAY , 201 6 AT GOA . S D / - S D / - (N.S.SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 0 TH MAY , 201 6 . VR/ - 5 ITA NO. 37 /P A N/201 6 & C.O.NO. 14/PAN/2016 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI