Viral Glass Private Limited, Pune V. Income-tax Officer, Pune

ITA 1154/PUN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4005 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-09-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 09-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MAHESH AKHADE
• Keywords: Retrospective amendment
• Section: 143(3); 234B

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.1154/PUN/2017 / ASSESSMENT YEAR : 2012-13 VIRAL GLASS PRIVATE LIMITED, SR.NO.45/4/2, TILEKAR WARE, HOUSE, KONDHAWA BUDRUK, PUNE 411 048. PAN : AABCV2396Q. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 13(5), PUNE. . / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK. REVENUE BY : DR. MAHESH AKHADE. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) PUNE - 5, PUNE, DT.13.02.2 017 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN WHOLESALE AND RETAIL TRADING IN GLASS. ASSESSEE ELECTRONICALLY FILED ITS RETU RN OF INCOME FOR A.Y. 2012-13 ON 29.09.2012 DECLARING TOTAL INCOME OF RS.5,31,763/-. THE CASE WAS SELECTED FOR SCRUTINY AND TH EREAFTER / DATE OF HEARING : 11.09.2018 / DATE OF PRONOUNCEMENT: 01.11.2018 2 ITA NO.1154/PUN/2017 ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER D T.27.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.49,73,180/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.C IT(A), WHO VIDE ORDER DT.13.02.2017 (IN APPEAL NO. PN/CIT(A)-5/ITO WD-13(5 ), PUNE/37/2015-16) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS R AISED THE FOLLOWING GROUNDS : COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN MAKING DISALLOWANCE OF RS.44,41,419/- U/S 40(A)(IA) OF INC OME TAX ACT, 1961, APPELLANT PRAYS TO ALLOW THE SAME. 2. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED I N NOT FOLLOWING JURISDICTIONAL TRIBUNAL DECISION, IT MAY PLEASE BE HELD THAT CIT(A) ORDER IS BAD-IN-LAW. 3. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED I N CHANGING INTEREST U/S 234B SAME MAY PLEASE BE DELETED. 4. APPELLANT PRAYS JUST AND EQUITABLE RELIEF 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE SO LE CONTROVERSY IS WITH RESPECT TO DISALLOWANCE U/S 40(A)(IA) OF THE ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERUS ING THE DETAILS, AO NOTICED THAT ASSESSEE HAD PAID INTEREST OF RS.4 4,41,419/- TO TATA CAPITAL FINANCIAL SERVICES LIMITED ON WHICH THE TDS U/S 194A OF THE ACT WAS NOT DEDUCTED BY THE ASSESSEE. THE ASS ESSEE WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT OF INTEREST NOT BE DISA LLOWED U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TDS. ASSESSEE MADE DETAILED SUBMISSION WHICH WAS NOT FOUND ACCEPTABLE TO THE AO. AO FURTHER HELD THAT THE SECOND PROVISO TO SEC.40(A)(IA) OF T HE ACT WHICH WAS INSERTED BY THE FINANCE ACT, 2012 CANNOT BE HELD TO BE RETROSPECTIVE. HE THEREFORE DISALLOWED PAYMENT OF INTEREST OF 3 ITA NO.1154/PUN/2017 RS.44,41,419/- U/S 40(A)(IA) OF THE ACT. AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO BY OBSERVING AS UNDER : 4.11 I HAVE PERUSED CAREFULLY THE MATERIAL ON RECORD AND CONTENTION OF THE APPELLANT. I TEND TO AGREE WITH THE AO. THE AME NDMENT, IS AMENDMENT INSERTED BY THE FINANCE ACT 2012 W.E.F 01 .07.2012 AND THE DATE OF APPLICABILITY BEING SPECIFIC, THE APPELLANT 'S: CASE UNDER CONSIDERATION DOES NOT COME IN ITS AMBIT. IT HAS BE EN HELD IN GEM GRANITES VS. CIT (SC) 271 ITR 322 THAT, NO RETROSPE CTIVITY UNLESS EXPRESSLY STATED OR CLEARLY IMPLIED. THE HONBLE MA DRAS HIGH COURT HAS HELD, IN THE CASES OF CIT VS POOSHYA EXPORTS (P) LT D. (MAD) 262 ITR 417, CWT VS. RELIANCE MOTOR CO. LTD (MAD) 260 ITR 571 AN D CWT VS. BR THEATERS & INDUSTRIAL CONCERNS (P) LTD (MAD) 272 IT R 177 THAT BENEFICIAL PROVISION DOES NOT NECESSARILY IMPLY, THAT THE AMEN DMENT IS TO BE GIVEN RETROSPECTIVE EFFECT, UNLESS SPECIFICALLY MADE IT A S RETROSPECTIVE IN OPERATION THE APPELLANT HAS RELIED ON THE DECISION OF THE JURISDICTIONAL ITAT IN THE CASE OF M/S. GAURIMAL MAHAJAN & SONS ITA NO. 852/PN/2012 DT 06.01.2014 STATING THAT, THE HON'BLE ITAT HAD TA KEN A CONSISTENT VIEW THAT AMENDMENT TO SECTION 40(A)(IA) BY INSERTI NG PROVISO IS RETROSPECTIVE AND THAT THE SAID JURISDICTIONAL PUNE ITAT DECISION WAS BINDING ON THE CIT(A). THE CASE QUOTED HAS BEEN PER USED AND IT IS FOUND THAT, THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE AD WITH DIRECTIONS TO EXAMINE THE CONTENTION OF THE ASSESSE E AND DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW. THUS, THE CONTENTION OF THE APPELLANT REGARDING THE VIEW TAKEN BY THE HON'BLE P UNE ITAT IS ERRONEOUS AND THE RELIANCE PLACED ON THIS CASE IS M ISPLACED. IN VIEW OF THE DISCUSSION, IT IS HELD THAT THE PROVISO CANNOT BE APPLIED RETROSPECTIVELY. THE QUESTION OF THEREFORE CONSIDER ING THE CA CERTIFICATE OF TATA CAPITAL AND ADJUDICATING ON IT DOES NOT ARI SE. IN LIGHT OF THE ABOVE, THE AO'S ACTION, OF HOLDING THE INTEREST PAY MENT WITHOUT DEDUCTION OF TAX AT SOURCE U/S 194A OF THE ACT AND THE SAME BEING HIT BY THE PROVISION OF SECTION 40(A) (IA) AND THEREFORE WARRANTING DISALLOWANCE IS UPHELD. THE DISALLOWANCE IS SUSTAIN ED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 5. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, ASSESSEE HAD SUBMITTED CERTIFICAT E OF CA IN FORM 26A CERTIFYING THAT THE RECIPIENT OF INTEREST I.E., TATA CAPITAL FINANCIAL SERVICES LIMITED HAS INCLUDED THE INTEREST PAID BY THE ASSESSEE AS ITS INCOME, HAS PAID THE TAXES ON THE INTER EST RECEIVED BY THEM FROM THE ASSESSEE AND THEREFORE NO DISALLOWANCE WAS CALLED FOR IN VIEW OF AMENDMENT TO SEC.40(A)(IA) OF THE ACT R.W.S. PROVISO S EC.201 4 ITA NO.1154/PUN/2017 INSERTED BY THE FINANCE ACT, 2012 W.E.F. 01.07.2012. HE POIN TED TO THE COPIES OF CERTIFICATES PLACED AT PAGES 4 AND 5 OF THE PAPE R BOOK. HE FURTHER SUBMITTED THAT PUNE TRIBUNAL IN SERIES OF DECISIONS HAS HELD THAT INSERTION OF SECOND PROVISO TO SEC.40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE IN NATURE AND RETROSPECTIVE W.E.F. 01.04.2013 BEING THE DATE FROM WHICH SEC.40(A)(IA) OF THE ACT WAS INSERTED. HE TH EREFORE SUBMITTED THAT IN SUCH A SITUATION, NO DISALLOWANCE U/S 40 (A)(IA) OF THE ACT IS WARRANTED. LD.D.R. ON THE OTHER HAND, SUPPORTED T HE ORDER OF AO AND LD.CIT(A). 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO DISALLOW ANCE U/S 40(A)(IA) OF THE ACT. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD PAID INTEREST OF RS.44,41,419/- TO TATA CAPITAL FINANCE SERVICES LIMITED IN THE YEAR UNDER CONSIDERATION, ON WHICH TDS U/S 194A OF T HE ACT WAS NOT DEDUCTED BY THE ASSESSEE. ASSESSEE HAS HOWEVER PLACED ON RECORD THE COPY OF THE CA CERTIFICATE (THIS CERTIFICATE WAS ALSO PRO DUCED BEFORE LD.CIT(A)) WHEREIN THE CA HAS CERTIFIED THAT THE PAYEE (TAT A CAPITAL FINANCE SERVICES LTD.,) HAS ACCOUNTED FOR INTEREST RECEIVED FROM THE ASSESSEE AS ITS INCOME AND HAS PAID THE TAX ON SUCH INT EREST. IN SUCH A SITUATION, I AM OF THE VIEW THAT NO DISALLOWANCE U/S 40(A )(IA) OF THE ACT IS CALLED FOR IN VIEW OF THE DECISION OF HONBLE DELHI HIGH C OURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD., R EPORTED IN (2015) 377 ITR 635, WHEREIN IT HAS HELD THAT INSERTION OF SE COND PROVISIO TO SEC.40(A)(IA) OF THE ACT IS DECLARATORY AND CURAT IVE IN NATURE AND HAS RETROSPECTIVE EFFECT FROM 01.04.2005. IT HAS FURT HER HELD THAT AS LONG AS PAYEE OR RESIDENT HAS FILED ITS RETURN OF INCOM E DISCLOSING 5 ITA NO.1154/PUN/2017 THE PAYMENT RECEIVED BY AND IN WHICH THE INCOME EMBEDDE D BY IT AND HAS ALSO PAID TAXES ON SUCH INCOME, THEN NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. BEFORE ME, REVENUE HAS NOT POINTED OUT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THESE FACTS, I AM OF THE VIEW THAT NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS CALLED FOR IN THE PRESENT CASE AND THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 1 ST DAY OF NOVEMBER, 2018. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 1 ST NOVEMBER, 2018. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE CIT(A)-5, PUNE. THE PR.CIT, PUNE-4, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.