The ITO, Ward-6(1), Surat V. Shri Chhotubhai Ramubhai Patel, Surat

ITA 106/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89649 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: M K PATEL
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO. 106/AHD/2012 ASST. YEAR 2007-08 INCOME-TAX OFFICER, WARD -6(1), SURAT. APPELLANT VS. M/S CHHOTUBHAI RAMUBHAI PATEL, PATEL STREET, AT & POST BHATALAL, TAL. CHORYASI, SURAT. RESPONDENT PAN :ABRPP 3188N APPELLANT BY : SHRI NARENDRA SINGH, SR. DR RESPONDENT BY : SHRI M. K. PATEL, AR DATE OF HEARING :30/6/2015 DATE OF PRONOUNCEMENT : 30/06/2015 O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 21.9.2011 ON THE FOLLOWING GROUNDS :- ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)-IV, SURAT HAS ERRED IN DELETING AN ADDIT ION OF RS.1,79,05,259/- MADE BY THE ASSESSING OFFICER AS P ER THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME-TAX A CT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)-IV, SURAT HAS ERRED IN HOLDING THAT THE LIABILITY TO DEDUCT TAX CEASES ON RECEIPT OF FORM NO.151 FROM TH E SUB CONTRACTORS IS NOT CORRECT AS AND WHEN THE ASSESS EE HAS FAILED TO FILE THE FORM NO.15J BEFORE THE PRESCRIBE D AUTHORITY AND WITHIN THE PRESCRIBED TIME LIMIT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)-IV, SURAT HAS ERRED IN ADMITTING THE ADD ITIONAL EVIDENCES AS PER THE PROVISIONS OF RULE 46A OF THE INCOME- TAX RULE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)-IV, SURAT HAS ERRED IN DELETING AN ADDIT ION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE I N AMOUNT OF INCOME, WITHOUT VERIFICATION OF THE CONTENTION O F THE ASSESSEE THAT THE EXCESS TDS IS PERTAINS TO THE INC OME OF EARLIER YEARS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A)-IV, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A ) IV, SURAT MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. THE ONLY ISSUE BEFORE US WITH REGARD TO DELETION OF ADDITION OF RS.1,79,05,259/- MADE UNDER SECTION 40(A)(IA) R .W.S. SECTION ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 3 194C. THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR AY 2007-08 DECLARING TOTAL INCOME AT RS.475,921/- ON 22.10.200 7. THE RETURN OF INCOME WAS DULY PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY, ACCORDINGLY, NOTICE U/S 143( 2) OF THE INCOME- TAX ACT WAS ISSUED ON 22.09.2008. DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD OB SERVED THAT THE ASSESSEE HAD CLAIMED HIRE EXPENSES OF RS.1,79,0 5,259/- BUT NO DEDUCTION OF TAX AT SOURCE WAS MADE AS REQUIRED U/S 194C. IN RESPONSE TO THE SHOW CAUSE NOTICE IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT NO DEDUCTION HAD BEEN MADE AS DECLARA TIONS HAD BEEN RECEIVED FROM SUB-CONTRACTOR IN FORM NO.15I. IT WAS SUBMITTED THAT FORM NO.15J FOR NON-DEDUCTION OF TDS HAD BEEN FILED ON 6.5.2008. THE SIMILAR SET OF FORM NO.15J WAS ALSO SUBMITTED O N 30.11.2009 I.E. AFTER 2 YEARS. THE DATE OF ISSUE OF SHOW CA USE WAS ONLY AN AFTERTHOUGHT TO COVER UP FOR LAPSE OF NON-DEDUCTION AT SOURCE. HE HELD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE AND SINCE NO DEDUCTION HAD BEEN MADE OR DEPOSITED WITHIN THE PRESCRIBED TIME IN THE GOVERNMENT ACCOUNT, THE PAYMENT OF RS.1 ,79,05,259/- ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 4 WAS HIT BY SECTION 40(A)(IA). THEREFORE, HE HELD TH AT THE HIRE CHARGES CLAIMED WERE INADMISSIBLE. 3. THE MATTER WAS CARRIED IN APPEAL BEFORE THE FIRS T APPELLATE AUTHORITY. THE CIT(A) CONSIDERING THE SUBMISSIONS M ADE ON BEHALF OF THE ASSESSEE GRANTED RELIEF TO THE ASSESSEE. SAM E HAS BEEN OPPOSED BY THE REVENUE BEFORE US. IT IS PLEADED BY THE REVENUE THAT CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.1,79,05,259/-. SO THE ORDER OF CIT(A) BE SET ASI DE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ON THE OTHER HAN D, THE LD. AR SUPPORTED THE ORDER OF CIT(A). 4. AFTER GOING THROUGH THE MATERIAL ON RECORD, WE F IND THAT PROVISIONS OF SECTION 40(A)(IA) COME INTO PLAY IF T HE RELEVANT TDS PROVISIONS IN THIS CASE SECTION 194C HAS BEEN VIOLA TED. THE ASSESSEE IS A CONTRACTOR AND AS PER SECTION THE ASS ESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE FROM SUB-CONTRACTO RS UNLESS THE SUB-CONTRACTOR FALLS WITHIN ANY OF THE EXCEPTIONS P ROVIDED IN THE ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 5 ACT. AS PER THE ASSESSEE HE HAD RECEIVED DECLARATIO N IN FORM NO.15I FROM THE SUB-CONTRACTORS DUE TO WHICH IT HAD NOT DEDUCTED TAX AT SOURCE. UNDISPUTEDLY FORM NO.15J WAS FILED L ATE- ONCE ON 6.5.2008 AND AGAIN ON 30.11.2009. THE ASSESSING OFF ICER CONSIDERED ONLY FORM NO.15J WHICH WAS FILED ON 30.1 1.2009 AND SINCE THE DATE OF FILING WAS AFTER ISSUE OF SHOW CA USE NOTICE, IN THIS CASE IT WAS HELD THAT THIS WAS AN AFTERTHOUGHT. THE ASSESSING OFFICER IGNORED THE CLAIM OF THE ASSESSEE BOTH BEFO RE HIM AND THE ITO TDS THAT FORM NO.15J HAD BEEN FILED ON 6.5.2008 ALSO. IN APPEAL, IT WAS FOUND BY CIT(A) THAT THE FIRST DATE OF FILING FORM NO.15J WAS BEFORE THE DATE OF ISSUE OF SHOW CAUSE N OTICE. HENCE THE THEORY OF AFTERTHOUGHT WAS NOT ENTERTAINED BY T HE CIT(A). HE OBSERVED THAT THE ASSESSEE WAS NOT LIABLE FOR DEDUC TION OF TAX AT SOURCE AND IN VIOLATION OF PROVISIONS OF SECTION 19 4C. THERE IS NO CONDITION PRESCRIBED IN THE ACT OR OTHERWISE THAT F ILING OF FORM NO.15J IS A PRE-CONDITION FOR NON-DEDUCTION OF TAX AT SOURCE. THE LIABILITY TO DEDUCT TAX CEASES ON RECEIPT OF FORM N O.15I FROM THE SUB-CONTRACTOR. THEREFORE, THE ASSESSEE CANNOT BE HELD TO BE IN ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 6 VIOLATION OF PROVISIONS OF SECTION 194C IN CASE OF DELAY IN FILING OF FORM NO.15J AND THEREFORE THE PROVISIONS OF SECTIO N 40(A)(IA) WAS NOT ATTRACTED IN THIS CASE. THIS VIEW IS FORTIFIED BY THE DECISION IN THE CASE OF VIPIN P. MEHTA VS.ITO IN ITA NO.3317/MU M/2010 AND BY THE DECISION OF AHMEDABAD TRIBUNAL BENCH IN THE CASE OF VALIBHAI KHANBHAI MANKAD ITA NO.2228/AHD/2009 DATED 29.4.2011. THERE IS NO INFIRMITY IN THIS FINDING OF CIT(A). THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 30 TH OF JUNE, 2015 SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED :30/6/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED ITA NO.106/AHD/2012 ASST. YEARS. 2007-08 7 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY.REGISTRAR,ITAT, AHMEDABAD 1. DATE OF DICTATION: 30/6/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 30/6/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 1/7/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: