GLOBAL VENTURE CORPORATION, Kolkata V. ACIT, Circle-49, Kolkata, Kolkata

ITA 107/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9292 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 20-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: SURAJIT GHOSH
• Keywords: Retrospective amendment; TDS; Set aside
• Section: 40(a)(ia); 201(1); 139

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 107/KOL/2017 ASSESSMENT YEAR: 2006-07 GLOBAL VENTURE CORPORATION PAN: AACFG 9172 F VS. ACIT, CIRCLE 49, KOLKATA APPELLANT RESPONDENT DATE OF HEARING 14.01.2019 DATE OF PRONOUNCEMENT 03.04.2019 FOR THE APPELLANT SHRI SOUMITRA CHOUDHURY, ADVOCATE & SHRI SURAJIT GHOSH, ADVOCATE FOR THE RESPONDENT SHRI C.J. SINGH, JCIT, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 15 KOLKATA DATED 10.11.2016 FOR A.Y. 2006-07. 2. AT THE OUTSET ITSELF, WE NOTE THAT THIS IS THE 2 ND ROUND APPEAL BEFORE THIS TRIBUNAL AND IN THE FIRST ROUND, THE TRIBUNAL VIDE ORDER DATED 1 3.04.2012 REMANDED THE ISSUES BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN RESPECT OF CERTAIN DISALLOWANCE MADE U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 (THE ACT). 3. FIRST GROUND OF THE APPEAL OF THE ASSESSEE IS OF LD. CIT(A) IN DISALLOWING AN AMOUNT OF RS. 5,26,890/- PAID TO THE CLEARING AGENT (EXEL INDIA PVT. LTD.). 4. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A MANUFACTURER AND AN EXPORTER, WHICH DERIVES INCOME MAINLY FROM THE BUSINESS OF EXPORT O N COTTON BAGS, P.P. BAGS ETC. IN THE NAME AND STYLE OF M/S. GLOBAL VENTURE CORPORATION. THE RETURN OF INCOME WAS FILED DISCLOSED IN TOTAL INCOME OF RS. 5,12,200/-. LATER IT WAS TAKEN UP FOR SCRUTINY AND THE AO VIDE ORDER DATED 02.12.2008 FRAMED THE ASSESSMENT O RDER MAKING CERTAIN DISALLOWANCES U/S 40(A)(IA) OF THE ACT. ON APPEAL, THE LD. CIT(A) VID E ORDER DATED 22.12.2009 HAD SET ASIDE THE MATTER WITH CERTAIN DIRECTIONS TO THE AO. AGGRI EVED BOTH REVENUE AND ASSESSEE FILED AN 2 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL WAS PLE ASED TO REMAND THE ISSUES BACK TO THE AO FOR FRESH ADJUDICATION IN RESPECT TO THE DISALLO WANCE MADE U/S 40(A)(IA) OF THE ACT BY ORDER DATED 13.04.2012 5. IN THE 2 ND ROUND, THE AO AFTER DISCUSSING THE CASE WITH THE A R OF THE ASSESSEE, ISSUED SHOW CAUSE NOTICE CONVEYING HIS INTENTION AS TO WHY THE AMOUNT OF RS. 5,26,890/- WHICH THE ASSESSEE CLAIM TO HAVE BEEN PAID TO EXEL INDIA PVT. LTD. AS REIMBURSEMENT OF EXPENSES BE DISALLOWED. THE ASSESSEE REPLIED THAT EXEL INDIA PV T. LTD. BEING SHIPPING & AIR CARGO AGENT INCURRED VARIOUS STATUTORY CHARGES LIKE THE PAYMENT OF TERMINAL HANDLING & WHARFAGE CHARGES, CONTAINER HIRE CHARGES, DOCUMENTS DRAFTING CHARGES ETC. ON BEHALF OF THE ASSESSEE AND SUBSEQUENTLY THESE AMOUNTS WERE REIMBURSED BY T HE ASSESSEE WHEN BILLS ARE RAISED AND FURNISHED THE BREAKUP OF THE EXPENSES OF RS.5,26,89 0/- AND CLAIMED THAT THE PAYMENT CANNOT ATTRACT DISALLOWANCE U/S 40(A)(IA). HOWEVER THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION AND WAS PLEASED TO DISALLOW THE CLAIM OF AMOUNT OF RS. 5,26,890/-. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS P LEASED TO CONFIRM THE SAME. AGGRIEVED THE ASSESSEE IS BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. WE NOTE THAT THE ASSESSEE HAS MADE PAYMENT OF RS. 5,26,890/- TO EXEL INDIA PV T. LTD. WHICH IS A SHIPPING AND AIR CARGO AGENT. SINCE TAX WAS NOT DEDUCTED AT SOURCE ON THES E PAYMENTS, THE AO DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT WHICH ACTION HAS BEEN CONF IRMED BY THE LD. CIT(A). WE NOTE THAT THE BREAKUP OF THE EXPENSES CLAIMED BY THE ASSESSEE IS AS UNDER: THE LIST OF SUCH REIMBURSEMENTS SO DISALLOWED ARE AS FOLLOWS: BAF & BL CHARGES 2,56,643.37 HANDLING & WHARFAGE CHARGE 2,52,567.18 CHARGES TO SHIPPING AGENCY 1,650.00 DRAFTING CHARGES OF SHIPPING/AIRWAY BILL 5,350/- OTHER PETTY EXPENSES 10,680.00 5,26,890.55 3 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 7. WE NOTE THAT THE AO IN HIS ASSESSMENT ORDER HAS OBSERVED THAT FREIGHT PAYMENTS ARE REIMBURSED ON WHICH TDS HAS NOT BEEN DEDUCTED SO DI SALLOWANCE WAS MADE. WE NOTE THAT THESE ARE EXPENSES WHICH HAVE BEEN BORNE BY THE CLE ARING AGENT EXEL INDIA PVT. LTD. ON BEHALF OF THE ASSESSEE. THE REIMBURSEMENT OF EXPENS ES BORNE BY EXEL INDIA LTD. ON BEHALF OF THE ASSESSEE CANNOT BE REGARDED AS INCOME IN THE HA NDS OF THE PAYEE. WE NOTE THAT IN THE REIMBURSEMENT OF EXPENSES BY THE PAYER, THERE IS NO ELEMENT OF INCOME IN THE HANDS OF THE PAYEE, THEREFORE, QUESTION OF ANY DISALLOWANCE U/S 40(A)(IA) DOES NOT ARISE AND, THEREFORE, WE ALLOW THE CLAIM OF THE ASSESSEE AND DIRECT DELETION OF THE ADDITION MADE ON THIS ISSUE. 8. COMING TO THE 2 ND GROUND OF APPEAL, THE ASSESSEE IS CONCERNED AGAINS T THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS . 15,18,550/- AND RS. 24,01,071/- U/S 40(A)(IA) ON ACCOUNT OF NON DEDUCTION OF TAX U/S 1 94C WHICH WAS PAID BY THE ASSESSEE TO M/S. PAUL ENTERPRISE & M/S. P.K. ENTERPRISE RESPECT IVELY. 9. BRIEF FACTS OF THE CASE IS THAT THE AO NOTED THA T THE ASSESSEE HAS MADE PAYMENTS OF RS. 15,18,550/- TO M/S. PAUL ENTERPRISE FOR CUTTIN G AND STITCHING CHARGES AS WELL AS TO M/S. P.K. ENTERPRISE AN AMOUNT OF RS. 24,01,071/- UNDER THE SAME HEAD CUTTING AND STITCHING CHARGES WITHOUT DEDUCTION OF TAX. ON BEING ASKED T HE ASSESSEES REPLY WAS THAT THE TOTAL PAYMENT TO THE PARTIES AMOUNTED TO RS. 15,18,550/- AND RS. 24,01,071/-. HOWEVER WHEN THE MONEY WAS DISBURSED ON A DAILY BASIS OR EACH TIME P AYMENT WAS MADE, IT NEVER EXCEEDED RS. 20,000/-. SO ACCORDING TO THE ASSESSEE THE DISA LLOWANCE UNDER THE CHAPTER XVII WAS NOT ATTRACTED AND SO NO DEDUCTION OF TAX AT SOURCE WHEN PAYMENT WAS MADE WAS REQUIRED. THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE A ND WAS PLEASED TO DISALLOW THE SAME. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) WHO WAS PLEASED TO CONFIRM THE SAME. AGGRIEVED THE ASSESSEE IS BEFORE US. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. BEFORE US, THE LEARNED AR SUBMITTED THAT BOTH THE PAYEES ARE INCOME TAX ASSES SEES AND ARE HAVING SEPARATE PAN NUMBERS AND HAVE FILED THEIR RETURN OF INCOME REFLE CTING THE AMOUNTS WHICH THE ASSESSEE HAS PAID AND THE CERTIFICATE BY THE CHARTERED ACCOUNTAN T AS PRESCRIBED BY THE LAW HAS BEEN FILED AND SUBMITTED THE FOLLOWING FACTS BEFORE US TO SUPP ORT HIS CONTENTIONS: 4 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 NAME PAN TOTAL SUM OF CREDIT IN THE YEAR TO THE ACCOUNT OF THE PAYEE GROSS TURNOVER AS DISCLOSED BY THE DEDUCTEE IN THEIR P& L A/C IT PAID IT RETURN ACK. NO. DATE OF SUBMISSION OF RETURN PAUL ENTERPRISE AKZPP1078J 15,18,550.00 16,38,465.00 145/- 49140090 48 29.03.2007 P.K. ENTERPRISE (PROP. PRADYUT MUKHERJEE AKQPM9840E 24,20,331.25 32,06,469.25 24211/- 5311014207 31.032 007 THE AFORESAID PARTICULARS ALONG WITH COPY OF ITR AC KNOWLEDGEMENTS AND FINANCIAL STATEMENTS FOR THE RELEVANT OF SUCH PARTIES WERE SU BMITTED BEFORE THE AUTHORITIES BELOW [PG. 44, 62-66 & 67-70 OF THE PAPER BOOK]. THESE FACTS WERE ALSO OBSERVED IN THE ERSTWHILE ASS ESSMENT [PG. 38 OF THE PAPER BOOK]. CERTIFICATES FROM CHARTERED ACCOUNTANTS IN THIS REG ARD THAT IMPUGNED PAYEES ARE SEPARATE ASSESSEE INCLUDED THE RELEVANT INCOME ON W HICH TAX WAS ALLEGED TO HAVE BEEN NOT DEDUCTED AND PAID LEGITIMATE TAX DUE ON THEIR O WN AT THE TIME OF FILING THEIR INCOME TAX RETURNS WERE ALSO SUBMITTED BEFORE THE AUTHORIT IES BELOW [PG. 71-75 & 76-81 OF THE PAPER BOOK]. 11. WE NOTE THAT THE FINANCE ACT, 2012 HAS INSERTED IN SECTION 40 OF THE ACT IN CLAUSE (A), IN SUB-CLAUSE (IA) AFTER THE PROVISO AND BEFORE THE EXPLANATION THE FOLLOWING AS UNDER: PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO D EDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVIS O TO SUB-SECTION (1) OF SECTION 201, THEN, FOR THE PURPOSE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE O F FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. 12. WE NOTE THAT THE SECOND PROVISO TO SECTION 40(A )(IA) REFERENCE OF SECTION 201(1) IS AS UNDER: 201.[(1) WHERE ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY,- (A) WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT; OR (B) REFERRED TO IN SUB-SECTION (1A) OF SECTION 192, BEING AN EMPLOYER, DOES NOT DEDUCT, OR DOES NOT PA Y, OR AFTER SO DEDUCTING FAILS TO PAY, THE WHOLE OR AN Y PART OF THE TAX, AS REQUIRED BY OR UNDER THIS ACT , 5 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 THE, SUCH PERSON, SHALL, WITHOUT PREJUDICE TO ANY O THER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX: [PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVI SIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT I N RESPECT OF SUCH TAX IF SUCH RESIDENT- (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTIO N 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED B Y HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCO UNTANT IN SUCH FORM AS MAY BE PRESCRIBED:]' 13. WE NOTE THAT THE HONBLE DELHI HIGH COURT IN TH E CASE OF CIT VS ANSAL LANDMARK TOWNSHIP (P) LTD. ITA NO. 160/2015 AND 161/2015 DAT ED 26.08.2015 HELD THAT THE 2 ND PROVISO TO SECTION 40(A)(IA) OF THE ACT IS DECLARAT ORY IN NATURE AND SO CURATIVE AND HAS RETROSPECTIVE EFFECT FROM 01.04.2005. THEREFORE, WE ARE OF THE OPINION THAT IF THE PAYEES HAVE INCLUDED THE SUBJECT MENTIONED RECEIPTS IN THE IR RETURN OF INCOME, THEN BY APPLYING SECOND PROVISO TO SECTION 40(A)(IA) READ WITH SECTI ON 201 OF THE ACT IS WARRANTED. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE AO FOR VERIFYING AS TO WHETHER THE PAYEES IN THIS CASE HAS DULY CONSIDERED THE SUBJECT MENTIONED PAYMENT MADE BY THE ASSESSEE IN THEIR RESPECT RETUR N OF INCOME FILED U/S 139 OF THE ACT AND HAD TAKE INTO CONSIDERATION SUCH SUM FOR COMPUTING INCOME AND HAD PAID THE TAX DUE IN THE INCOME DECLARED BY THE PAYEES IN THE RETURN OF INCO ME AND IF THESE FACTS ARE EVIDENT FROM CHARTERED ACCOUNTANT CERTIFICATE ISSUED IN TERMS OF THE FIRST PROVISO TO SECTION 201(1) OF THE ACT THEN NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT I S WARRANTED. 14. BEFORE WE PART OUR ATTENTION WAS DRAWN TO THE F ACT THAT THE LD. CIT(A) HAS NOT GIVEN RELIEF TO THE ASSESSEE ON THE PLEA THAT MR. S. PAUL (PROP. PAUL ENTERPRISE) AND MR. P.K. MUKHERJEE (PROP. P.K. ENTERPRISE) HAD FILED THEIR R ETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 ON 29.03.2007 AND 31.03.2007 RESPECTIVELY. SO ACCORDING TO THE LD. CIT(A) SINCE THE RETURN OF INCOME U/S 139(1) LAYS DOWN THE TIME LIMIT FOR FILING RETURN OF INCOME HAS EXPIRED, HE WAS OF THE OPINION THAT THE PAYEES HAVE NOT COMPLIED WITH THE PROVISION OF SECTION 201(1) AND DID NOT GIVE RELIEF TO THE ASSES SEE. THE PRECISE ISSUE OF BELATED FILING OF RETURN BY THE PAYEES WHICH PRECIPITATED THE ACTION OF THE AUTHORITIES BELOW DENYING THE RELIEF IN SUCH CIRCUMSTANCES HAS BEEN ADJUDICATED BY COORD INATE BENCH OF THIS TRIBUNAL IN THE CASE 6 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 OF JASHOJIT MUKHERJEE VS ACIT ITA NO. 403/KOL/2017 FOR ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 04.05.2018 HAS HELD AS UNDER: 7. THE LAST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE ACT IN THE SUM OF RS 1,15,716/- RELATING TO ADHIR KUMAR MONDAL UPON PAYMENT OF LABO UR AND FABRICATION CHARGES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE HAD CLAIMED AN EXPENDITURE OF RS 63,59,500/- UNDER THE HEAD LABOUR & FABRICATION CH ARGES DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE SUBMITTED PARTY WISE D ETAILS OF LABOUR AND FABRICATION EXPENSES AND PARTY WISE DETAILS OF TDS IN ALL THE F OUR QUARTERS. WHILE COMPARING THE PARTY WISE DETAILS WITH THE TDS DETAILS, THE LD AO NOTICED THAT THE ASSESSEE HAD SHORT DEDUCTED TAX AT SOURCE IN RESPECT OF AMOUNT PAID TO ADHIR KUMAR MONDAL TO THE TUNE OF RS 1,15,716/-. THE LD AO DISALLOWED THE SAME U/S 4 0(A)(IA) OF THE ACT FOR SHORT DEDUCTION OF TAX AT SOURCE. IN APPEAL, THE LD CITA OBSERVED THAT THE ASSESSEE HAD SUBMITTED A CERTIFICATE FROM THE CHARTERED ACCOUNTA NT THAT ADHIR KUMAR MONDAL HAD CONSIDERED THE SUBJECT MENTIONED PAYMENT IN HIS RE TURN FILED ON 23.3.2013 AND ACCORDINGLY IN VIEW OF THE SECOND PROVISO TO SECTIO N 40(A)(IA) READ WITH SECTION 201, WHICH HAS BEEN HELD TO BE RETROSPECTIVE IN OPERATIO N, THE ASSESSEE SHOULD NOT BE TREATED AS ASSESSEE IN DEFAULT AND CONSEQUENTIALLY NO DISAL LOWANCE U/S 40(A)(IA) OF THE ACT COULD BE INFLICTED ON HIM. THE LD CITA OBSERVED TH AT SINCE ADHIR KUMAR MONDAL HAD FILED THE RETURN OF INCOME ON 23.3.2013 (I.E BEYOND THE DUE DATE U/S 139(1) OF THE ACT), THE CONDITIONS LAID DOWN IN PROVISO TO SECTION 201( 1) OF THE ACT ARE NOT SATISFIED AND ACCORDINGLY UPHELD THE DISALLOWANCE OF RS 1,15,716/ - MADE BY THE LD AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUND:- 4. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, LD. CIT(A) WAS WRONG IN CONFIRMING THE DISALLOWANCES OF RS. 1,15,716/- RELA TING TO ADHIR KUMAR MONDAL UPON PAYMENT OF LABOUR & FABRICATION CHARGES U/S 40(A)(I A), THEREFORE, THE ADDITION SO MADE IS LIABLE TO BE CANCELLED. 7.2. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OU TSET, WE FIND THAT THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT HAS BEEN MADE DUE TO SHORT DEDUCTION OF TAX AT SOURCE ON LABOUR AND FABRICATION CHARGES PAID TO ADHIR KUMAR MONDAL. WE FIND THAT THE LD CITA HAD CONSIDERED THE ASSESSEE (PAYER) AS ASSESSEE IN DEFA ULT DESPITE THE CHARTERED ACCOUNTANTS CERTIFICATE PROVING THE FACT THAT ADHI R KUMAR MONDAL HAD DULY CONSIDERED THE PAYMENTS MADE BY THE ASSESSEE IN HIS RETURN OF INCOME FILED ON 23.3.2013. THE LD CITA HAD HELD THAT SINCE THE RETURN WAS FILED BELAT EDLY U/S 139(4) OF THE ACT BY THE PAYEE (I.E ADHIR KUMAR MONDAL), THE CONDITIONS PRES CRIBED IN PROVISO TO SECTION 201(1) OF THE ACT WERE NOT SATISFIED AND ACCORDINGLY THE A SSESSEE IS TO BE TREATED AS ASSESSEE IN DEFAULT. IN THIS REGARD, THE CONDITIONS PRESCRIBE D IN PROVISO TO SECTION 201(1) OF THE ACT ARE REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- 7 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 SECTION 201 CONSEQUENCES OF FAILURE TO DEDUCT OR PAY (1) 18 [ PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER O F A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDAN CE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITE D TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT O F SUCH TAX IF SUCH RESIDENT (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139 ; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOM E IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFE CT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED 19 :] FROM THE BARE READING OF THE CONDITIONS PRESCRIBED IN PROVISO TO SECTION 201(1) OF THE ACT ABOVE, WE FIND THAT THE LEGISLATURE HAD NO WHER E PROVIDED THAT THE PAYEE SHOULD FURNISH HIS RETURN OF INCOME U/S 139(1) OF THE ACT. THE CONDITION ONLY SAYS SECTION 139. IT DOES NOT MENTION ABOUT SECTION 139(1) OF THE ACT . THE RETURN FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(4) OF THE ACT IS ALSO A VALID RE TURN AS THAT LEEWAY HAS BEEN PROVIDED IN THE STATUTE ITSELF. IT IS NOT IN DISPUTE THAT T HE PAYEE (I.E ADHIR KUMAR MONDAL) HAD DULY CONSIDERED THE SUBJECT MENTIONED PAYMENT MADE BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 139 OF THE ACT AND HAD TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING THE INCOME AND HAD PAID THE TAXES DUE ON THE INCOME DEC LARED BY HIM IN THE RETURN OF INCOME. ALL THE THREE CONDITIONS ARE DULY SATISFI ED. THESE FACTS ARE EVIDENT FROM THE CHARTERED ACCOUNTANT CERTIFICATE ISSUED IN TERMS OF FIRST PROVISO TO SECTION 201(1) OF THE ACT , WHICH IS PART OF RECORDS BEFORE US, AND WHICH FACT REMAIN UNCONTROVERTED BY THE REVENUE BEFORE US. WE FIND THAT THE LD CITA HAD T AKEN COGNIZANCE OF THIS CA CERTIFICATE BUT HAD NOT GIVEN WEIGHTAGE OF THE SAME DUE TO HIS INTERPRETATION THAT SECTION 139 REFERRED TO IN THE PROVISO TO SECTION 201(1) OF THE ACT NEED TO BE CONSTRUED ONLY AS SECTION 139(1) OF THE ACT AND NOT OTHERWISE. IN TH ESE FACTS AND CIRCUMSTANCES, WE HOLD THAT THE ASSESSEE HAD FURNISHED REQUISITE EVIDENCES TO PROVE THAT THE PAYEE HAD DULY CONSIDERED THE SUBJECT MENTIONED RECEIPT IN HIS RET URN OF INCOME AND HENCE NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT COULD BE INFL ICTED ON THE SAME IN THE HANDS OF THE ASSESSEE PAYER. ACCORDINGLY, THE GROUND NO. 4 RAI SED BY THE ASSESSEE IS ALLOWED. 7.3. YET ANOTHER POINT THAT ARISES FOR OUR CONSIDER ATION IN THE INSTANT CASE IS AS TO WHETHER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT COULD BE INVOKED FOR SHORT DEDUCTION OF TAX AT SOURCE. WE FIND THAT THIS ISSUE HAS BEEN HELD IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT VS S K TEKRIWAL IN ITA NO. 1135/KOL/2010 DATED 21.10.2011( 2014) 361 ITR 432 WHEREIN IT WAS HELD THAT IN THE CASE OF SHORT DEDUCTION OF TAX AT SOURCE, NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE AND THE ASSESSEE COULD BE PROCEEDED AGAINST ONLY UNDER SECTION 201 OF THE ACT IN SUCH CASES. THIS DECISION WAS 8 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 ADMITTEDLY APPROVED BY THE HONBLE JURISDICTIONAL H IGH COURT IN THE SAME CASE IN ITAT NO. 183 OF 2012 G.A.NO. 2069 OF 2012 DATED 3.12.20 12. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT COULD BE MADE IN THE HANDS OF THE ASSESSEE PAYER HEREIN. ACCORDINGLY, THE GROU ND NO. 4 RAISED BY THE ASSESSEE DESERVES TO BE ALLOWED ON THIS ASPECT ALSO. 15. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, THE REASON GIVEN BY THE LD. CIT(A) FOR NOT GIVING RELIEF TO THE ASSESSEE ON THE REASON THAT THE PAYEES FILED BELATED RETURN OF INCOME CANNOT BE COUNTENANCED. SO, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF THE AO FOR V ERIFYING AS TO WHETHER THE PAYEES IN THIS CASE HAS DULY CONSIDERED THE SUBJECT MENTIONED PAYM ENT MADE BY THE ASSESSEE IN THEIR RESPECTIVE RETURN OF INCOME FILED U/S 139 OF THE AC T AND HAD TAKE INTO CONSIDERATION SUCH SUM FOR COMPUTING INCOME AND HAD PAID THE TAX DUE I N THE INCOME DECLARED BY THE PAYEES IN THE RETURN OF INCOME AND IF THESE FACTS ARE EVIDENT FROM CHARTERED ACCOUNTANT CERTIFICATE ISSUED IN TERMS OF THE FIRST PROVISO TO SECTION 201 (1) OF THE ACT THEN NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS WARRANTED. THIS GROUND OF T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE WITH THE AFORESAID DIRECTION FO R VERIFICATION. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03 .04. 2019 SD/- SD/- (P.M. JAGTAP) (ABY. T. VARKEY) VICE-PRESIDENT JUDICIAL MEMBER DATED : 3RD APRIL, 2019 BISWAJIT (SR. P.S.) 9 ITA NO.107/KOL/2017 GLOBAL VENTURE CORPORATION AY 2006-07 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT GLOBAL VENTURE CORPORATION, 28A, J.K . GHOSAL ROAD, ARIADAHA, KOLKATA 700 057. 2 RESPONDENT ACIT, CIRCLE 49, UTTRAPAN COMPLEX, DS-2, MANICKTALA CIVIC CENTRE, 2 ND FLOOR, KOLKATA 700 054. 3. THE CIT(A) - KOLKATA. (THROUGH E-MAIL) 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. (THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR/H.O.O. ITAT, KOLKATA BENCHES