Asstt.Commissioner of Income-tax Central Circle-1(4), Nagpur V. M/s Urja Infrastructure, Mumbai

ITA 113/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93384 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 113/NAG/2013 ASS ESSMENT YEAR : 200 9-10. ASSTT. COMMISSIONER OF INCOME-TAX, M/S URJA INFRASTRUCTURE CENTRAL CIRCLE-1(4), NAGPUR. V/S. 303, SALVATION APPT., N.M. KALE MARG, DADAR, MUMB AI. PAN AACFU 0764H. APPELLANT. RESPONDENT. APPELLANT BY : SHRI S.R. KIRTANE. RESPONDENT BY : S HRI K.P. DEWANI. DATE OF HEARING - 23-04-2015 DATE OF ORDER 8 TH MAY, 2015. O R D E R PER SHRI MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF LEARNED CIT(APPEALS)-29, MUMBAI FOR ASSESSMENT YEAR 2009-10 AND THE GROUNDS RAISED ARE REPRODUCED BELOW : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE E OF ` .44,00,265/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) IGNORED THE EXTANT PROVISIONS OF SECTION 40 (A)((IA) OF THE ACT, RELEVANT TO THE ASSESSMENT YEAR 2009-10. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE AMENDMENT TO SECTION 40(A)(IA) IS W.E.F. 01-04-2010 I.E. FOR A.Y. 2010-11 AND THE AMENDMENT HAS NOT BEEN MADE RETROSPECTIVELY BUT PROSPECTIVELY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN FOLLOWING THE RATIO OF KOLKATTA HI GH COURT IGNORING THE RATIO OF HONBLE APEX COURT IN THE CASE OF RELIANCE JUTE & INDUSTRIES LTD. V/S. CIT (SC) REPORTED IN 120 ITR 921 ACCORDING TO WHICH TH E LAW TO BE APPLIED IS THAT WHICH IS IN FORCE DURING THE ASSESSMENT YEAR I.E. THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT PRIOR TO THEIR AMENDM ENT W.E.F. 01-04-2010. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 28-12-2011 WERE THAT TH E ASSESSEE FIRM IS A CIVIL CONTRACTOR. A RETURN OF INCOME WAS FILED DECLARING AN INCOME OF ` .80,22,252/-. ON PERUSAL OF THE BALANCE SHEET DRAWN AS ON 31 ST MARCH, 2009, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE TDS WAS PAYABLE OF ` .7,10,013/- PERTAINING TO THE SAID CONTRACTORS AND AN ANOTHER SUM OF TDS OF ` .13,606/- PERTAINING TO PROFESSIONAL CHARGES. THE ASSESSING OFFICER HAS ALS O MADE AN OBSERVATION IN PARA 7 OF THE ASSESSMENT ORDER THAT THE IMPUGNED AMOUNT OF TDS WAS PAID AFTER THE END OF THE FINANCIAL YEAR BUT BEFORE THE FILING OF THE RETURN OF INCOME. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE WAS REQUIRED TO DEPOSIT THE TDS UPTO 28-02- 2009 I.E. BEFORE 31 ST MARCH, 2009. SINCE THE ASSESSEE HAD DEFAULTED, HEN CE THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SEC TION 40(A)(IA) OF I.T. ACT. THEREAFTER, THE ASSESSING OFFICER HAS COMPUTED THE CORRESPONDING PAYMENTS TOTALING ` .44,59,899/- AND TAXED IN THE HANDS OF THE ASSESSEE . 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST AP PELLATE AUTHORITY, LEARNED CIT(APPEALS) HAS DISCUSSED FEW CASE LAWS AND DECIDE D THIS ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER : 3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E, ARGUMENTS OF THE ASSESSING OFFICER AND THE WRITTEN SUBMISSIONS OF T HE AUTHORISED REPRESENTATIVE OF THE APPELLANT. AS HAS BEEN DISCU SSED EARLIER APPELLANT HAS CLAIMED THAT HIS CASE IS COVERED BY THE DECISION O F CALCUTTA HIGH COURT IN THE CASE OF VIRGIN CREATIONS ITA NO. 302 OF 2011. I FIND THAT THE ONLY ISSUE IS TO BE DECIDED IS WHETHER IN THE CASE OF THE APPELL ANT, DISALLOWANCE CAN BE MADE UNDER THE PROVISIONS OF SECTION 40(A)(IA) TAK ING INTO CONSIDERATION THE FACT THAT THE APPELLANT HAS DEPOSITED THE TAX DEDU CTED DURING THE FINANCIAL YEAR BEFORE FILING OF RETURN OF INCOME WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1). IN THIS CASE APPELLANT HAS DEPOSIT ED THE TAX DEDUCTED AT SOURCE INTO GOVERNMENT ACCOUNT BEFORE FILING OF R ETURN WITHIN TIME ALLOWED UNDER SECTION 139(1). THE ISSUE IS SQUAREL Y COVERED BY THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF GOLDEN STABLES L IFESTYLE CENTRE PVT. LTD. IN ITA NO. 5145/MUM/2009 DATED 13-09-2010 AND THE DECISION OF MUMBAI ITAT IN THE CASE OF PIYUSH C MEHTA ITA NO. 132/MUM /2009 DATED 11-4- 2012. IN THE ORDER OF PIYUSH C MEHTA THE JURISDICTI ONAL ITAT HAS FOLLOWED KOLKATTA HIGH COURT IN THE CASE OF VIRGIN CREATION ITA NO. 302 OF 2011. 4. WITH THIS FACTUAL BACKGROUND WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE REVENUE THE LEARNED D.R. MR. S.R. KIRTANE AP PEARED AND SUPPORTED THE ACTION OF THE ASSESSING OFFICER AND PLEADED THAT TH E AMENDMENT IN QUESTION SHOULD BE CONSIDERED AS PROSPECTIVE IN NATURE BEING CLARIFICATORY IN NATURE. HENCE THE LEARNED CIT(APPEALS) WENT WRONG IN TREATING THE PROVISIONS OF SECTION 40(A)(IA) AS APPLICABLE RETROSPECTIVELY. ON THE OTHER HAND, L EARNED A.R. MR. K.P. DEWANI HAS PLACED FEW DECISIONS OF THE TRIBUNAL AND PLEADED T HAT THE ISSUE IS NOW COVERED BY ALL THOSE DECISIONS IN FAVOUR OF THE ASSESSEE, AS L ISTED BELOW : 1. ITAT, NAGPUR BENCH DECISION IN THE CASE OF SHR EE GANESH BUILDERS IN ITA NO. 05/NAG/2009 VIDE ORDER DATED 25-04-2011. 2. ITAT AHMEDABAD BENCH DECISION IN ITA NO. 1240/A HD/2011 IN THE CASE OF M/S PRECISIONS TECHNOFAB & ENGINEERING LTD . VIDE ORDER DATED 05- 09-2014. 4 IN THE CASE OF CIT V/S. VERGIN CREATIONS (CIVIL A PPELLANT JURISDICTION ITA NO. 302 OF 2011 ORDER DATED 23 RD NOV., 2011) IT WAS HELD AS UNDER : THE LEARNED TRIBUNAL ON FACT FOUND THAT THE ASSE SSEE HAD DEDUCTED TAX AT SOURCE FROM THE PAID CHARGES BETWEEN THE PERIOD AP RIL 1, 2005 AND APRIL 28, 2006 AND THE SAME WERE PAID BY THE ASSESSEE IN JULY AND AUGUST 2006 I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE FACTUAL POSITION WAS UNDI SPUTED. MOREOVER THE SUPREME COURT, AS HAS BEEN RECORDED B Y THE LEARNED TRIBUNAL IN THE CASE OF ALLIED MOTORS PVT. LTD. AN D ALSO IN THE CASE OF ALOM EXTRUSIONS LTD., HAS ALREADY DECIDED THAT THE AFOR ESAID PROVISION HAS RETROSPECTIVE APPLICATION. AGAIN, IN THE CASE REPO RTED IN 82 ITR 570, THE SUPREME COURT HELD THAT THE PROVISION, WHICH HAS I NSERTED THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATE D WITH RETROSPECTIVE OPERATION SO THAT REASONABLE CAN BE GIVEN TO THE S ECTION AS WELL. RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS, WE HER EBY CONFIRM THE FINDINGS OF THE LEARNED CIT(APPEALS). RESULTANTLY, WE FIND NO F ORCE IN THIS GROUND OF THE REVENUE, HENCE DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2015. SD/- SD/- (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER. NAGPUR, DATED: 8 TH MAY, 2015. 5 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY BY ORDER ASSISTANT REGISTRAR, WAKODE ITAT, NAG PUR