Bansilal R. Agarwal (HUF), V. Deputy Commissioner of Income-tax,

ITA 1084/PUN/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7059 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Retrospective amendment; Non-deduction of tax
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! ' # , $% &' #' , ' # '( BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWAS THY, JM '%. / ITA NO. 1084/PUN/2016 * +* / ASSESSMENT YEAR : 2011-12 BANSILAL R. AGARWAL (HUF), 283, BUDHWAR PETH, PUNE 411002 PAN : AACHA7282E ....... / APPELLANT /VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : SHRI P.S. NAIK / DATE OF HEARING : 09-02-2017 / DATE OF PRONOUNCEMENT : 15-02-2017 , / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-13, PUNE DATED 15-03 -2016 FOR THE ASSESSMENT YEAR 2011-12. 2 ITA NO. 1084/PUN/2016, A.Y. 2011-12 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A TRADER IN READYMADE GARMENTS. THE ASSES SEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 30 -09-2011 DECLARING TOTAL INCOME AS NIL. NOTICE U/S. 143(2) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISSUED T O THE ASSESSEE ON 13-09-2012. DURING THE COURSE OF SCRUTINY ASSESSMENT P ROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE P AYMENT OF INTEREST ` 59,35,808/- TO SMT. TRUPTI AGARWAL WITHOUT COMPLYING WITH THE PROVISIONS OF TDS. THE ASSESSING OFFICER DISALLOWED THE A FORESAID PAYMENT OF INTEREST U/S. 40(A)(IA) OF THE ACT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23-03-2013, T HE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE ASSESSMENT ORDER. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI KISHOR PHADKE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD TAKEN LOAN FROM SMT. TR UPTI AGARWAL, WIFE OF ONE OF THE MEMBER OF ASSESSEE (HUF). ADMITTEDLY, TH E TAX WAS NOT DEDUCTED IN RESPECT OF THE INTEREST PAYMENT MADE T O SMT. TRUPTI AGARWAL. HOWEVER, IN VIEW OF SECOND PROVISO TO SECTION 40(A )(IA) RECENTLY INSERTED BY FINANCE ACT, 2012, THE PROVISIONS OF SECTION 40(A)(IA) CANNOT BE APPLIED TO THE ASSESSEE AS SMT. TRUPTI A GARWAL HAS OFFERED THE INTEREST AMOUNT RECEIVED FROM THE ASSESSEE T O TAX AND HAS PAID TAX THEREON. IN SUPPORT OF HIS CONTENTIONS THE LD. A R HAS DRAWN OUR ATTENTION TO THE INCOME TAX RETURN FILED BY SMT. TR UPTI AGARWAL FOR ASSESSMENT YEAR 2011-12 AND THE STATEMENT OF INCOME FILE D ALONG WITH 3 ITA NO. 1084/PUN/2016, A.Y. 2011-12 THE RETURN PLACED ON RECORD AT PAGES 1 TO 5 OF THE PA PER BOOK. THE LD. AR SUBMITTED THAT THESE DOCUMENTS WERE FURNISHED BEFORE THE AUTHORITIES BELOW BUT THE SAME WERE NOT CONSIDERED. THE LD. AR SUBMITTED THAT THE SECOND PROVISO TO SECTION 40(A)(IA) THO UGH INSERTED BY FINANCE ACT, 2012 IS APPLICABLE RETROSPECTIVELY W.E.F. 01-0 4-2005. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCO ME TAX VS. ANSAL LANDMARK TOWNSHIP P. LTD. REPORTED AS 377 ITR 635. 4. ON THE OTHER HAND SHRI P.S. NAIK REPRESENTING THE DEP ARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). THE LD. DR SUBMITTED THAT THE ASSESSEE HAS VIO LATED TDS PROVISIONS IN RESPECT OF PAYMENT OF INTEREST TO SMT. TRUP TI AGARWAL. THE ASSESSING OFFICER HAS RIGHTLY MADE DISALLOWANCE U/S. 40(A )(IA) AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CORRECTLY AFFIR MED THE SAME. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PER USED. THE ONLY DISPUTE IN THE PRESENT CASE IS WITH RESPECT TO DISA LLOWANCE OF INTEREST PAYMENT ` 59,35,808/- U/S. 40(A)(IA) FOR NON-DEDUCTION OF TAX AT THE TIME OF PAYMENT OF INTEREST. THE LD. AR HAS CONTEND ED THAT THE RECIPIENT OF THE INTEREST AMOUNT SMT. TRUPTI AGARWAL HAS O FFERED THE INTEREST INCOME RECEIVED FROM ASSESSEE FOR TAX AND HAS P AID TAX THEREON. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR HAS PLAC ED ON RECORD A COPY OF INCOME TAX RETURN FILED BY SMT. TRUPTI AGARWAL FO R THE ASSESSMENT YEAR 2011-12, THE STATEMENT OF INCOME FILED A LONG WITH THE RETURN OF INCOME, THE CAPITAL ACCOUNT AND THE INTEREST AC COUNT OF SMT. TRUPTI AGARWAL. IT HAS BEEN CONTENDED THAT ALTHOUGH SE COND PROVISO TO 4 ITA NO. 1084/PUN/2016, A.Y. 2011-12 SECTION 40(A)(IA) HAS BEEN INSERTED BY THE FINANCE ACT, 2012 BUT THE AMENDMENT IS EFFECTIVE RETROSPECTIVELY FROM 01-04-2005. 6. THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ANSAL LANDMARK TOWNSHIP P. LTD. (SUPRA) HAD OCCASION TO DEAL WITH THIS ISSUE. APPROVING THE DECISION OF TRIBUNAL IN THE CASE OF RAJEEV KUMAR AGARWAL VS. ADDITIONAL COMMISSIONER OF INCOME TAX IN ITA NO. 337/AGRA/2013 FOR THE ASSESSMENT YEAR 2006-07 DECIDED ON 29-05-2013, THE HONBLE HIGH COURT HELD THAT THE INSERTIO N OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NA TURE AND IT HAS RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2005, BEING THE DATE FROM WHICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE ACT, 2004. THE SECOND PROVISO TO SECTION 40(A)(IA) READS AS UNDER : [ PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE O R ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIO NS OF CHAPTER XVII-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201 , THEN, FOR THE PURPOSE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESS EE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. ] IN THE PRESENT CASE, THE ASSESSEE HAS NOT BEEN DECLA RED ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT FOR NON-DEDUCTION OF TAX A T SOURCE ON THE PAYMENT OF INTEREST. 7. THUS, IN VIEW OF THE FACTS OF THE CASE AND THE DECISION O F HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF COMMISSIONER OF IN COME TAX VS. ANSAL LANDMARK TOWNSHIP P. LTD. (SUPRA), WE DEEM IT APP ROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR LIM ITED 5 ITA NO. 1084/PUN/2016, A.Y. 2011-12 PURPOSE TO VERIFY THE FACT; WHETHER SMT. TRUPTI AGARWA L HAS OFFERED THE INTEREST AMOUNT RECEIVED FROM ASSESSEE TO TAX. IF THE A MOUNT HAS BEEN OFFERED TO TAX NO DISALLOWANCE U/S. 40(A)(IA) IN THE HANDS OF AS SESSEE IS CALLED FOR. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 15 TH DAY OF FEBRUARY, 2017. SD/- SD/- ( / ANIL CHATURVEDI) ( ! / VIKAS AWASTHY) ' ! / ACCOUNTANT MEMBER # ! / JUDICIAL MEMBER ' / PUNE; $% / DATED : 15 TH FEBRUARY, 2017 RK , - ./& 0&+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. & & ' () / THE CIT(A)-13, PUNE 4. THE PR. CIT (CENTRAL), PUNE 5. *+ ,- , & ,- , . ./ , ' / DR, ITAT, B BENCH, PUNE. 6. +01 23 / GUARD FILE. // // TRUE COPY// &'4 / BY ORDER, 5 %6 / ASSISTANT REGISTRAR, & ,- , ' / ITAT, PUNE