M/s. Creators Engineers & Interiors (P) Ltd., CHENNAI V. ACIT, Trichy

ITA 118/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4783 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Opportunity of being heard
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI N.S. SAINI, AM AND SHRI GEORGE MATHAN, J.M. .. I.T.A. NO. 118/MDS/2011 ASSESSMENT YEAR 2007-08 M/S CREATORS ENGINEERS & INTERIORS P. LTD NO. ,26, ANGEL COMPLEX TVS TOLL GATE TRICHY 20. PAN : AACCC 4738 J VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE II THIRUCHIRAPALLI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. VIJAYARAGHAVAN DEPARTMENT BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL O R D E R PER N.S. SAINI, A.M :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A)-I, CHENNAI DATED 09.11.2010. PAGE 2 OF 5 I.T.A. NO. 118/MDS/2011 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE AS SESSEE IN ALL THE GROUNDS OF APPEAL IS THAT THE LD. CIT(A) ERRED IN C ONFIRMING THE DISALLOWANCE OF RS. 25,40,298/- MADE BY THE ASSESS ING OFFICER U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 [IN SHORT, TH E ACT] ON NON DEDUCTION OF TDS U/S 194 OF THE ACT. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE HAD MADE PAYMENTS TO TEN PARTIES TOTALING RS. 25,40,298/-. THE ASSESSE E STATED THAT THE PAYMENTS WERE FOR PURCHASES OF MATERIAL, HIRE CHARG ES, HENCE TDS WAS NOT REQUIRED TO BE DEDUCTED FROM THE SAID PAYME NTS. THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO F URNISH COPIES OF INVOICE REGARDING PURCHASE OF MATERIALS, BUT HE ASS ESSEE FAILED TO FURNISH THE SAME. THEREFORE, THE ASSESSING OFFICER DISALLOWED DEDUCTION FOR RS. 25,40,298/- BY INVOKING THE PROV ISIONS OF SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT NO TDS WAS DEDUCTED U/S 194C OF THE ACT. 4. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION O F THE ASSESSING OFFICER. PAGE 3 OF 5 I.T.A. NO. 118/MDS/2011 5. AT THE TIME OF HEARING, THE LD. A.R. SUBMITTED T HAT IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE TO FURNISH INVOICES AS ON 29.12.2009, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE PURCHASE INVOI CES AND WITHOUT GRANTING TIME PASSED THE ASSESSMENT ORDER ON THE VE RY SAME DATE I.E. ON 29.12.2009. HE ALSO SUBMITTED THAT THE PUR CHASE INVOICES WERE PRODUCED BEFORE THE LD. CIT(A) AND THE LD. CIT (A) DID NOT ACCEPT THE SAME AS THEY WERE NOT FILED BEFORE THE A SSESSING OFFICER. 6. THE LD. D.R. ON THE OTHER HAND, HAD NO OBJECTION ON THE ISSUE BEING RESTORED TO THE FILE OF THE LD. CIT(A) FOR FR ESH ADJUDICATION AFTER CONSIDERING THE PURCHASE INVOICES. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD, WE FIND THAT IN THE INSTANT CAS E, ASSESSEE HAD MADE PAYMENTS TO TEN DIFFERENT PARTIES TOTALING RS. 25,40,298/- FROM WHOM NO TDS WAS DEDUCTED FROM THE SAID PAYMENT S. THE ASSESSEE CLAIMED THAT THE PAYMENTS WERE MADE TOWARD S PURCHASE OF MATERIALS/HIRE CHARGES AND THEREFORE, NO TDS WAS RE QUIRED TO BE DEDUCTED, BUT THE ASSESSEE FAILED TO FURNISH THE PU RCHASE INVOICE PAGE 4 OF 5 I.T.A. NO. 118/MDS/2011 BEFORE THE ASSESSING OFFICER AND THEREFORE, THE ASS ESSING OFFICER, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, DISALLOWED RS. 25,40,298/- FOR NON-DEDUCTING OF TDS FROM PAYMENTS U/S 194C OF THE ACT . IT IS OBSERVED FROM THE ASSESSMENT ORDER THA T THE ASSESSEE WAS REQUIRED TO PRODUCE PURCHASE INVOICES ON 29.12.2009 AND IT IS ALSO OBSERVED THAT THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER ON 29.12.2009 ITSELF. THUS THE ASSESSEE WAS NOT GR ANTED SUFFICIENT OPPORTUNITY TO FILE PURCHASE INVOICES. THE ASSESSE E HAS ALSO SUBMITTED BEFORE US THAT THE PURCHASE INVOICES WERE FILED BEFORE THE LD. CIT(A) WHO DID NOT ACCEPT THE SAME AS THEY WERE NOT FILED BEFORE THE ASSESSING OFFICER. THIS CONTENTION OF THE LD. A.R. WAS NOT CONTROVERTED BY THE LD. D.R. WE, THEREFORE, IN THE INTEREST OF JUSTICE, SET ASIDE THE ORDERS OF THE LOWER AUTHORIT IES AND REMAND THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO READJ UDICATE THE ISSUE AFRESH AFTER CONSIDERING THE PURCHASE INVOICES FILE D BY THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE PURCHASE INVO ICES AND OTHER MATERIAL ON WHICH IT WISHES TO RELY UPON AS AND WHE N CALLED UPON TO DO SO BY THE LD. CIT(A). THE LD. CIT(A) IS FURTHER DIRECTED TO ALLOW REASONABLE AND PROPER OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES BEFORE ADJUDICATING THE ISSUE AFRESH. PAGE 5 OF 5 I.T.A. NO. 118/MDS/2011 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFT ER THE CONCLUSION OF HEARING ON 29 TH JUNE 2011. SD/- SD/- ((GEORGE MATHAN ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 29 TH JUNE, 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE