M/s Patny Systems Private Limited, Hyderabad V. Asst.CIT,Circle 16(3), Hyderabad

CO 24/HYD/2014

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9569 (ITAT-HYDERABAD)
• Duration Of Justice: 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 17-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1788/HYD/2013 ASSESSMENT YEAR 2005-2006 ACIT, CIRCLE 16(3) HYDERABAD. VS. M/S. PATNY SYSTEMS LTD. SECUNDERABAD. PAN AABCP 4724C (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.24/HYD/2014 ARISING OUT OF ITA.NO.1788/HYD/2013 ASSESSMENT YEAR 2005-2006 M/S. PATNY SYSTEMS LTD. SECUNDERABAD. PAN AABCP 4724C VS. ACIT, CIRCLE 16(3) HYDERABAD. (APPELLANT) (RESPONDENT) FOR REVENUE : MR. B. YADAGIRI FOR ASSESSEE : -NONE- DATE OF HEARING : 22.04.2014 DATE OF PRONOUNCEMENT : 29.04.2014 ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL OF THE DEPARTMENT AND CROSS OBJECTION OF THE ASSESSEE ARE AGAINST ORDER DATED 30.09.2013 OF THE LD. CIT(A) PERTAINING TO A.Y. 2005-06. 1.1. THE ONLY ISSUE IN THE APPEAL OF THE DEPARTMEN T IS IN RESPECT OF DELETION OF ADDITION MADE BY INVOKING SECTION 40(A)(IA) OF THE ACT. 2 ITA.NO.1788/HYD/2013 & CO.24/HYD/2014 M/S. PATNY SYSTEMS LTD. HYD 1.2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE WHEN THE MATTER WAS CALLED. CONSIDERING THE NATURE OF DI SPUTE, WE PROCEED TO DECIDE THE APPEAL AFTER HEARING THE LEAR NED D.R. 2. BRIEFLY STATED THE FACTS ARE, ASSESSEE IS A COM PANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF CABLE TRA YS, CABLE DUCTS AND ITS ACCESSORIES. FOR THE IMPGUEND A.Y. TH E ASSESSEE FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.1 8,59,200/-. INITIALLY, THE RETURN WAS PROCESSED UNDER SECTION 1 43(1). SUBSEQUENTLY, THE A.O. NOTICING THAT ASSESSEE HAD D EDUCTED TAX AT SOURCE AMOUNTING TO RS.1,61,611/- BUT HAS NO T PAID TO GOVERNMENT ACCOUNT WITHIN THE DUE DATE FORMED AN OP INION THAT IT IS NOT ALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, THE A.O. ISSUED NOTICE UNDER SECTION 1 48 REOPENING THE ASSESSMENT. IN COURSE OF THE RE-ASSES SMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THAT AS THE ASS ESSEE HAS DEPOSITED THE TDS AMOUNT WITHIN THE DUE DATE PRESCR IBED FOR FILING OF RETURN U/S.139(1), NO DISALLOWANCE CAN BE MADE IN VIEW OF THE AMENDMENT BROUGHT TO SECTION 40(A)(IA) BY FINANCE ACT, 2010 READ WITH CBDT CIRCULAR NO.1 OF 2009 DATE D 27.03.2009. HOWEVER, THE A.O. WAS NOT CONVINCED WIT H EXPLANATION OF THE ASSESSEE. THE A.O. FOLLOWING THE DECISION OF ITAT, MUMBAI SPECIAL BENCH IN THE CASE OF M/S. BHAR ATI SHIPYARD LTD. VS. DCIT HELD THAT AMENDMENT TO SECTI ON 40(A)(IA) OF THE ACT BY FINANCE ACT, 2010 WILL NOT APPLY RETROSPECTIVELY AND DISALLOWED THE AMOUNT OF RS.51, 22,782/- UNDER SECTION 40(A)(IA). 3. THE ASSESSEE CHALLENGED THE DISALLOWANCE IN APPEAL PREFERRED BEFORE THE CIT(A). THE LD. CIT(A) FOLLOWING THE DECISION OF THE HONBLE KOLKATA HIGH COURT IN THE C ASE OF CIT VS. M/S. VIRGIN CREATIONS LTD. ITA.NO.302 OF 2011 D ATED 3 ITA.NO.1788/HYD/2013 & CO.24/HYD/2014 M/S. PATNY SYSTEMS LTD. HYD 23.11.2011 AND NUMBER OF OTHER DECISIONS INCLUDING THOSE OF ITAT, HYDERABAD BENCHES HELD THAT SINCE THE ASSESSE E HAS PAID THE TDS AMOUNT WITHIN THE DUE DATE PRESCRIBED U/S. 139(1) FOR FILING RETURN OF INCOME, NO DISALLOWANCE CAN BE MADE UNDER SECTION 40(A)(IA) OF THE ACT AND ACCORDINGLY, ALLOWED THE APPEAL BY DELETING THE ADDITION. 4. WE HEARD THE LEARNED D.R. AND PERUSED THE MATERIALS ON RECORD. THERE IS NO DISPUTE TO THE FAC T THAT THE ASSESSEE HAS PAID THE TDS AMOUNT WITHIN THE DUE DAT E OF FILING OF RETURN AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT. ONLY ISSUE WHICH REMAINS TO BE DECIDED IS WHETHER THE AM ENDMENT BROUGHT TO SECTION 40(A)(IA) BY FINANCE ACT, 2010 W OULD APPLY RETROSPECTIVELY OR NOT. IN OUR VIEW, THIS ISSUE IS NO MORE RES INTEGRA AS THE HONBLE KOLKATA HIGH COURT IN CASE OF CIT V S. VIRGIN CREATIONS (SUPRA), HAS EXPRESSED THE VIEW TH AT AMENDMENT TO SECTION 40(A)(IA) BY FINANCE ACT, 2010 BEING CURATIVE IN NATURE WOULD APPLY RETROSPECTIVELY. FOL LOWING THE VIEW EXPRESSED BY THE HONBLE KOLKATA HIGH COURT (S UPRA), DIFFERENT BENCHES OF THE TRIBUNAL INCLUDING HYDERAB AD BENCHES (AS REFERRED TO BY THE CIT(A) IN HIS ORDER) HAVE ALSO HELD THAT IF THE TDS AMOUNT WAS PAID WITHIN THE DUE DATE PRESCRIBED FOR FILING OF RETURN UNDER SECTION 139(1 ), NO DISALLOWANCE CAN BE MADE UNDER SECTION 40(A)(IA). I N FACT, THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-IV, HY DERABAD VS. PEC ELECTRONICS PVT. LTD. ITA.NO.263/HYD/2013 DATED 12.07.2013 EXPRESSED THE SAME VIEW WHILE DISMISSING DEPARTMENTS APPEAL. THE LD. CIT(A)S ORDER BEING I N CONFORMITY WITH THE VIEW EXPRESSED BY THE HONBLE JURISDICTION AL HIGH COURT (SUPRA) AS WELL AS VIEW EXPRESSED IN OTHER DE CISIONS REFERRED TO BY THE LD. CIT(A), WE DO NOT SEE ANY RE ASON TO 4 ITA.NO.1788/HYD/2013 & CO.24/HYD/2014 M/S. PATNY SYSTEMS LTD. HYD INTERFERE WITH THE SAME. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A) BY DISMISSING THE GROUNDS RAISED. 5. THE CROSS-OBJECTION FILED BY THE ASSESSEE ONLY SUPPORTS THE ORDER OF CIT(A). THEREFORE, IN VIEW O F OUR DECISION IN DEPARTMENTS APPEAL IN ITA. NO. 1788/HYD/2013 TH E CROSS- OBJECTION HAS BECOME INFRUCTUOUS. 6. IN THE RESULT, BOTH DEPARTMENTS APPEAL AND ASSESSEES CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.2014. SD/- SD/- (B.RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 29 TH APRIL, 2014 VBP/- COPY TO : 1. ACIT, CIRCLE 16(3), HYDERABAD. 2. M/S. PATNY SYSTEMS LTD. 160, PATNY PLAZA, S.P. R OAD, BEGUMPET, SECUNDERABAD. 3. CIT(A)-V, HYDERABAD 4. CIT-IV, HYDERABAD 5. D.R. ITAT, B BENCH, HYDERABAD.