SADANAND KRISHNA NAKHA, MUMBAI V. ITO 12(2)(4), MUMBAI

CO 274/MUM/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9168 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 18-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI . . , , BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO.6205/MUM/2012 ( / ASSESSMENT YEAR: 2009-10) INCOME-TAX OFFICER -12(2)(4), ROOM NO.123B, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 / VS. SADANAND KRISHNA NAKHWA, PROP. OF STREAMSLINE SHIPPING, 46, PIPEWALA BUILDING, 4 TH PASTAL LANE, COLABA, CUFFE PARADE, MUMBAI-400 020 ./ ./PAN/GIR NO. ACNPN 6407 F ( /APPELLANT ) : ( !' / RESPONDENT ) & !' . /CROSS OBJECTION NO. 274/MUM/2013 (ARISING OUT OF ITA NO. 6205/MUM/2012) ( / ASSESSMENT YEAR: 2009-10) SADANAND KRISHNA NAKHWA, PROP. OF STREAMSLINE SHIPPING, 46, PIPEWALA BUILDING, 4 TH PASTAL LANE, COLABA, CUFFE PARADE, MUMBAI-400 020 / VS. INCOME-TAX OFFICER - 12(2)(4), ROOM NO.123B, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ./ ./PAN/GIR NO. ACNPN 6407 F ( /APPELLANT ) : ( !' / RESPONDENT ) # $ % / REVENUE BY : SHRI M. L. PERUMAL !' / CROSS OBJECTOR : SHRI K. GOPAL & SHRI SATENDRA PANDEY & '#( $ )* / DATE OF HEARING : 10.12.2013 +,- $ )* / DATE OF PRONOUNCEMENT : 20.12.2013 2 ITA NO. 6205/M/12 & CO NO.274/M/13 (A.Y. 2009-10) SADANAND KRISHNA NAKHWA . / O R D E R PER SANJAY ARORA, A. M.: THESE ARE CROSS APPEALS, I.E., BY THE REVENUE AND T HE ASSESSEE, ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2 3, MUMBAI (CIT(A) FOR SHORT) DATED 30.07.2012, PARTLY ALLOWING THE ASSESSEES AP PEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2009-10 VIDE ORDER DATED 20.12.2011. REVENUES APPEAL (IN ITA NO. 6205/MUM/2012) 2. THE ONLY ISSUE PER THE REVENUES APPEAL IS THE M AINTAINABILITY OF THE DELETION U/S. 40(A)(IA) OF THE ACT UNDER THE FACTS AND CIRCUMSTAN CES OF THE CASE BY THE FIRST APPELLATE AUTHORITY. THE BASIS OF THE RELIEF BY HIM HAS BEEN BY HOLDING THE AMENDMENT TO SECTION BY FINANCE ACT, 2010 W.E.F. 01.04.2010 AS RETROSPECTIV E, SO THAT IT WOULD APPLY TO THE CURRENT YEAR AS WELL. PER THE SAID PROVISION, A SUM OTHERWI SE DEDUCTIBLE IN THE COMPUTATION OF INCOME U/S. 28, ON WHICH TAX IS DEDUCTIBLE AT SOURC E (TDS) DURING A PARTICULAR YEAR, IS ALLOWABLE ONLY WHERE THE SAME (TDS) IS ACTUALLY PAI D BY THE END OF THE RELEVANT PREVIOUS YEAR (CLAUSE B). AN EXCEPTION IS MADE FOR PAYMENTS/ CREDITS MADE DURING THE LAST MONTH OF THE YEAR, IN WHICH CASE AN EXTENDED TIME PERIOD UP TO THE DUE DATE OF THE FILING OF THE RETURN FOR THE RELEVANT YEAR IS ALLOWED (CLAUSE A). IN CASE OF BREACH OF THE TIME LIMIT, AS PRESCRIBED, THE ALLOWANCE IS POSTPONED TO THE YEAR OF ACTUAL PAYMENT OF THE TDS (VIDE PROVISO THERETO). THE SAID PROVISION, CO-OPTED ON THE STAT UTE BY FINANCE ACT, 2008 W.R.E.F. 01.04.2005, STANDS AMENDED BY FINANCE ACT, 2010, EX TINGUISHING OR REMOVING THE DIFFERENCE IN THE PERIOD DURING THE RELEVANT YEAR W HEN THE TAX AT SOURCE BECOMES DEDUCTIBLE, SO THAT THE SAME WHERE PAID BY THE DUE DATE OF FILING OF RETURN OF THE ASSESSEE- DEDUCTOR, WOULD QUALIFY FOR DEDUCTION FOR THE SAID YEAR. CORRESPONDINGLY, THE RATE OF THE INTEREST ON THE DELAY IN THE PAYMENT (OF TDS) STAND S ENHANCED FROM 12% P.A. TO 18% P.A. (SECTION 201(1A)). THE ASSESSEES CASE, WHICH FOUND APPROVAL WITH THE LD. CIT(A), IS THAT THE AMENDED PROVISION IS RETROSPECTIVE, SO THAT THE ENTIRE TAX DEDUCTED AT SOURCE HAVING BEEN ADMITTEDLY PAID ON 25.07.2009, I.E., BEFORE TH E DUE DATE OF FILING OF THE RETURN FOR THE 3 ITA NO. 6205/M/12 & CO NO.274/M/13 (A.Y. 2009-10) SADANAND KRISHNA NAKHWA RELEVANT ASSESSMENT YEAR IN THE ASSESSEES CASE, IS ALLOWABLE, FOLLOWING THE DECISION DATED 06.03.2012 BY THE HONBLE CALCUTTA HIGH COURT IN TH E CASE OF CIT VS. VIRGIN CREATIONS (IN ITA NO.302 OF 2011 GA 3200/2011 DATED 23.11.2011). AGGRIEVED, THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE REVENUE HAS RELIED ON THE DECISION BY THE BHARATI SHIPYARD LTD. VS. DY. CIT [2011] 132 ITD 53 (MUM) (SB), HOLDING AFTER AN ELAB ORATE DISCUSSION IN THE MATTER THE AMENDMENT UNDER REFERENCE AS NOT RETROSPECTIVE, APA RT FROM BOARD CIRCULAR NO.1/2011 DATED 06.04.2011 IN RESPECT OF THE EXPLANATORY NOTE S TO THE PROVISIONS OF FINANCE ACT, 2010, CLARIFYING THE PROVISION AS APPLICABLE FROM 0 1.04.2010. THE AMENDMENT IS NEITHER CLARIFICATORY NOR DECLARATORY, EVEN AS HELD BY THE APEX COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. [2009] 319 ITR 306 (SC) AND ALLIED MOTORS (P.) LTD. VS. CIT [1997] 224 ITR 677 (SC), RELIED UPON BY THE HONBLE CALCUTTA H IGH COURT IN VIRGIN CREATIONS (SUPRA), IN HOLDING THE AMENDMENT UNDER REFERENCE TO BE RETR OSPECTIVE. THE ONLY ISSUE, IN VIEW OF THE FOREGOING, AS WE PE RCEIVE IS WHETHER THE DECISION BY THE SPECIAL BENCH IN BHARATI SHIPYARD LTD. (SUPRA) WOULD PREVAIL IN PREFERENCE TO THAT BY THE HONBLE CALCUTTA HIGH COURT IN VIRGIN CREATIONS (SUPRA). THIS IS AS NO VIEW, AS WE UNDERSTAND, HAS YET BEEN EXPRESSED BY THE HONBLE J URISDICTIONAL HIGH COURT IN THE MATTER. THE TRIBUNAL IN THE CASE OF TEJ INTERNATIONAL (P.) LTD. V. DY. CIT [2000] 69 TTJ (DEL) 650 HAS CLARIFIED THAT IN CASE OF CONFLICT OF VIEW, THE VIEW BY THE HONBLE HIGH COURT WOULD PREVAIL OVER THAT BY THE SPECIAL BENCH OF THE TRIBU NAL. IN FACT, THE DECISION IN THE CASE OF VIRGIN CREATIONS (SUPRA) IS BEING REGULARLY FOLLOWED BY THE CO-ORDI NATE BENCHES OF THIS TRIBUNAL, AS IN THE CASE OF MADINENI MOHAN VS. ITO [2013] 28 (TRIB) 157 (HYD.). WE, ACCORDINGLY, ENDORSE THE IMPUGNED ORDER ON THIS GRO UND. WE DECIDE ACCORDINGLY. ASSESSEES C.O. (IN C.O. NO. 274/MUM/2013) 4. THE ONLY ISSUE INVOLVED IN THIS GROUND IS MAINTA INABILITY IN LAW OF DISALLOWANCE OF INTEREST U/S.36(1)(III) FOR RS.81,383/- IN THE FACT S AND CIRCUMSTANCES OF THE CASE. AT THE 4 ITA NO. 6205/M/12 & CO NO.274/M/13 (A.Y. 2009-10) SADANAND KRISHNA NAKHWA OUTSET, THE LD. AR WOULD SUBMIT THAT HE DID NOT WIS H TO PRESS THE ASSESSEES C.O. IN VIEW OF THE SMALLNESS OF THE AMOUNT UNDER REFERENCE. IN VIEW THEREOF, THE ASSESSEES C.O. WARRANTS AN IN LIMINE DISMISSAL. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, BOTH THE REVENUES APPEAL AND THE ASSESSEES C.O. ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 20, 2013 SD/ - SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER & ( MUMBAI; /' DATED : 20.12.2013 #.'../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. & 0) ( ) / THE CIT(A) 4. & 0) / CIT - CONCERNED 5. 3#45 !)'67 , * 67- , & ( / DR, ITAT, MUMBAI 6. 589 :( / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , & ( / ITAT, MUMBAI