Anandidevi Gairola, Panvel V. ITO, Panvel

ITA 1247/PUN/2012

• Counselvise Citation: 124724514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D Y PANDIT
• Keywords: Procedural lapse
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1247/ P N/ 20 12 ASSESSMENT YEAR : 2006 - 07 SMT. ANANDIDEVI GAIROLA, 6, NEELKAM AL, SECTOR - 11, ROAD # 12, NEW PANVEL VS. COMMISSIONER OF INCOME TAX (APPEALS), THANE (APPELLANT) (RESPONDENT) PAN NO. AEOPG0145G APPELLANT BY: SHRI D.Y. PANDIT RESPONDENT BY: SMT. SHAILJA RAI DATE OF HEARING : 17 - 09 - 2013 DATE OF PRONOUNCEMENT : 30 - 09 - 2013 ORDER P ER R.S. PADVEKAR , JM : - THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - I, THANE DATED 07 - 02 - 2012 FOR THE A.Y. 2006 - 07. THE GROUND NO. 1 READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.60,092/ - MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME UNDER SECTION 40(A)(IA) OF THE INCOME - TAX ACT WITHOUT CONSIDERING THE GROUND REALITIES. T HE CLEARING CHARGES WERE PAID TO THREE PARTIES OF THEM NONE EXCEEDED THE THRESHOLD LIMIT UNDER THE PROVISIONS OF SECTION 194C OF INCOME - TAX ACT. THE LEARNED ASSESSING OFFICER ERRONEOUSLY CONSIDERED CLEARING CHARGES UNDER THE HEAD PROFESSIONAL AND TECHNICA L SERVICES INSTEAD OF CONTRACTUAL SERVICES AND MADE ADDITIONS TO TOTAL INCOME AMOUNTING TO RS.60,092/ - . 2. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE TRADING IN OPTICAL LENS ACCESSORIES, LENS PROCESSING INSTRU MENTS, MACHINERY, SPARES AND CONSUMABLES ETC. UNDER THE NAME AND STYLE OF M/S. LENSTECH SER VICES. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2006 - 07 DECLARING TOTAL INCOME OF RS.3,28,080/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY. IT WAS NOTICED BY THE 2 ITA NO. 1247/PN/2012, SMT. ANANDID EVI GAIROLA, NEW PANVEL ASSESSING OFFICER THAT THE ASSESSEE HAS MADE PAYMENT IN RESPECT OF C LEARING AND FORWARDING CHARGES TO DIFFERENT PARTIES TO THE EXTENT OF RS.60,092/ - . IN THE OPINION OF THE ASSESSING OFFICER , THE SAID PAYMENT IS COVERED U/S. 194 J OF THE INCO ME - TAX ACT AND THE ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE. THE ASSESSING OFFICER INVOKED THE SEC. 40(A)(IA) OF THE ACT AND MADE THE DISALLOWANCE OF RS.60,092/ - . THE ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE THE LD. CIT(A) BUT WITHOUT SUCCESS. 3 . WE HAVE HEARD THE PARTIES. SO FAR AS THE FACTS ARE CONCERNED IT IS NOT IN DISPUTE THAT THE PAYMENT IN QUESTION IS MADE TO CLEARING AND FORWARDING AGENT S FOR CUSTOM S CLEARANCE. THE MUTE QUESTION IS WHETHER CLEARING CHARGES PAID TO THE CLEARING AND FORWA RDING AGENTS ARE FOR RENDERING THE PROFESSIONAL SERVICES . THE IDENTICAL ISSUE HAS COME FOR THE CONSIDERATION. IN THE CASE OF GLAXO SMITH K LINE CONSUMER HEALTH C A RE LTD. VS. ITO ( 2007 ) 12 SOT 221 (DELHI) AND AFTER ELABORATE DISCUSSION IT IS HELD THAT THE SERVICES RENDERED BY CLEARING AND FORWARDING AGENTS ARE SQUARELY COVERED U/S. 194C OF THE ACT. WE, THEREFORE, HOLD THAT THE PAYMENT MADE BY THE ASSESSEE TO THE C & F AGENT ARE NOT COVERED U/S. 194J BUT U/S. 194C. WE FIND THAT AS PER THE AMOUNTS AMENDMENT MENTIONED AGAINST EACH C & F AGENT IN THE ASSESSMENT ORDER THE AMOUNT S ARE LESS THAN RS.50,000/ - AND PER THE PROVISIONS OF SEC. 194C THE AGGREGATE LIMIT OF PAYMENT WAS RS.50,000/ - FOR A.Y. 2006 - 07. WE , ACCORDINGLY , HO LD THAT THERE WAS NO OBLIGATION ON TH E ASSESSEE TO DEDUCT THE TAX AT SOURCE FROM THE PAYMENTS MADE TO C & F AGENTS AND ALLOW THE GROUND NO. 1 AND DELETE THE ADDITION . 4. THE GROUND NO. 2 READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME - T AX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,83,643/ - MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME UNDER SECTION 40(A)(IA) OF THE INCOME - TAX ACT WITHOUT CONSIDERING THE GROUND REALITIES. THE APPELLANTS INADVERTENT OMISSION TO DELIVER T HE COPIES OF THE DECLARATI O NS IN FORM NO. 15G TO THE COMMISSIONER OF INCOME TAX WAS NOT CONSIDERED AS A 3 ITA NO. 1247/PN/2012, SMT. ANANDID EVI GAIROLA, NEW PANVEL PROCEDURAL LAPSE OCCURRED ON THE PART OF A SENIOR CITIZEN OF HER AGE AND RELYING ON THE ADVICE OF AN EXPERT. 5. IT WAS NOTICED BY THE ASSESSING OFFI CER THAT THE ASSESSEE HAS MADE AN INTEREST PAYMENT TO THE EXTENT OF RS.1,87,991/ - AND OUT OF THE SAID PAYMENT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENT OF RS.1,83,643/ - U/S. 194A OF THE INCOME - TAX ACT. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE DEDUCTION WAS NOT MADE A S THE CONCERNED PARTIES HAD GIVEN FORM NO. 15G OF THE INCOME - TAX ACT WHICH IS IN NATURE OF DECLARATION. IT APPEARS THAT THE ASSESSEE HAS NOT FILED THE COP IES OF THE FORM NO. 15G IN THE OFFICE OF THE CCIT OR CIT WITHIN 7 DAYS AS PER THE RULE 19C OF THE INCOME - TAX RULES, 1962. THE ASSESSING OFFICER, THEREFORE, INVOKED THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT FOR FAILURE ON THE PART OF THE ASSESSEE TO MAKE DEDUCTION AT SOURCE FROM THE INTEREST PAYMENT AND MADE THE ADDITION OF RS.1,83,643/ - . THE ADDITION WAS SUSTAINED BY THE LD. CIT(A). 6. WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL SUBMITS THAT THE COPIES OF FORM NO. 15G WERE FURNISHED BY THE RECIPIENT S AND HENCE , NO TAX WAS DEDUCTED. THE COUNSEL ALSO FILED THE COPIES OF FORM NO. 15G IN THE PAPER BOOK TO DEMONSTRATE THAT THE SAID FORMS WERE RECEIVED FROM THE RECIPIENT S IN RESPECT OF INTEREST PAID WITHIN BEFORE END OF FINANCIAL YEAR. THE LEARNED COUNSEL ALSO RELIED ON THE DECISIONS IN THE CASE OF V IPIN P. MEHTA VS. ITO, ITA NO. 3317/MUM/2010 ORDER DATED 20 - 05 - 2011 AND IN THE CASE OF KARWAT STEEL TRADERS VS. ITO, ITA NO. 6822/MUM/2011 ORDER DATED 10 - 07 - 2013 . WE HAVE ALSO HEARD THE LD. DR . 7. IN THIS CASE, IT IS NOT IN DISPUTE THAT THE AMOUNT IN QUE STION IS AN INTEREST AND COVERED U/S. 194 OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT THE RECIPIENTS OF THE INTEREST HAVE GIVEN FORM NO. 15G TO THE ASSESSEE AND HENCE, THE ASSESSEE DID NOT DEDUCT THE TAX AT SOURCE. HE SUBMITS THAT ALL THE FORMS WE RE FILED BEFORE THE ASSESSING OFFICER AT THE 4 ITA NO. 1247/PN/2012, SMT. ANANDID EVI GAIROLA, NEW PANVEL TIME OF ASSESSMENT BUT IS NOT AWARE WHETHER THE COPIES OF THE SAID FORMS WERE SUBMITTED TO THE CIT. 8. IN TH IS CASE, THE SHORT ISSUE IN CONTROVERSY IS NON - DEDUCTION OF TAX AT SOURCE BY THE ASSESSEE IN RESPECT O F THE INTEREST PAYMENT OF RS.1,83,643/ - WHICH WAS DISALLOWED BY INVOKING THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT EVEN IF THE FORM NO. 15G COLLECTED FROM THE RECIPIENT WAS NOT SENT TO THE CCIT OR CIT AS PER RULE B UT THE SAID FORMS WERE AVAILABLE WITH THE ASSESSE E AND HENCE, THE ASSESSEE DID NOT DEDUCT THE TAX AT SOURCE . O N THE PERUSAL OF THE ASSESSMENT ORDER , WE FIND THAT THE ONLY REASON GIVEN BY THE ASSESSING OFFICER FOR DISALLOWING THE INTEREST AMOUNT FOR NOT DE DUCTING THE TAX AT SOURCE IS THAT THE ASSESSEE DID NOT FILE THE COPIES OF FORM NO. 15G TO THE OFFICE OF THE CCIT OR CIT. THE ASSESSING OFFICER HAS NOT QUESTIONED WHETHER THE ASSESSEE HAS RECEIVED THE SAID FORMS BEFORE IN THE F INANCIAL YEAR I.E. 31 - 03 - 2006 . THE LD. CIT(A) PUT HIS STAMP OF APPROVAL BY OBSERVING THAT COPY OF THE FORM NO. 15G WAS NEVER FILED IN THE INCOME - TAX OFFICE. 9. IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA) THE ASSESSEE HAD PAID INTEREST TO 34 PARTIES AGGREGATING RS.7,87,291/ - BUT DI D NOT DEDUCT TAX AT SOURCE U/S. 194A. IT WAS CLAIMED BY THE ASSESSEE THAT ALL THE PAYEES TO WHOM THE INTEREST WAS PAID HAVE FURNISHED DECLARATIONS IN FORM NO. 15H/15G TO THE ASSESSEE . THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT THE SAID FORMS W ERE FILED BELATEDLY BY MISTAKES. THE TRIBUNAL ALSO OBSERVED THAT EVEN IF THE ASSESSEE HAVE BELATEDLY FILED THE DECLARATION S WITH THE OFFICE OF CCIT/CIT BEYOND THE TIME LIMIT SPECIFIED IN SEC. 197A(2) THAT AMOUNT TO OMISSION OR DEFAULT FOR WHICH THE PENALT IES PRESCRIBED AND NO DISALLOWANCE U/S. 40 (A) (IA) CAN BE MADE . 10. IN THE CASE OF KARWAT STEEL TRADERS VS. ITO (SUPRA) THE ASSESSEE HAS PAID THE INTEREST BUT DID NOT DEDUCT THE TAX AT SOURCE IN RESPECT OF 17 PARTIES. IT WAS CLAIMED THAT FORM NO. 15H/15G W ERE RAISED . THE 5 ITA NO. 1247/PN/2012, SMT. ANANDID EVI GAIROLA, NEW PANVEL ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT MADE THE DISALLOWANCE TO THE EXTENT OF RS. 5,30,429/ - . THE TRIBUNAL FOLLOWED A DECISION IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA) AND HELD THAT EVEN IF THE ASSES SEE HAS DELAYED THE FILING OF THE COPIES OF THE FORM NO. 15H/15G BEYOND THE TIME LIMIT SPECIFIED IN SEC.197A(2) THAT WAS A DISTINCT OMISSION OR DEFAULT FOR WHICH PENALTY IS PRESCRIBED . 11. IN BOTH THE ABOVE CASES, IT IS SEEN THAT EITHER THE FORMS WERE FIL ED DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR BELATEDLY IN THE PRESENT CASE. THE ASSESSING OFFICER HAS NOWHERE DOUBT ED THAT THE ASSESSEE HAD NOT RECEIVED THE FORMS IN QUESTION I.E. THE 15G/15H BEYOND END OF FINANCIAL YEAR BUT DISALLOWANCE IS MERELY BA SED ON THE REASON OF VIOLATION OF RULE FOR NOT SENDING THE COPIES OF THE SAID FORMS TO THE OFFICE OF THE CCIT OR CIT. IN OUR OPINION, THE PRINCIPLES LAID DOWN IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA) ARE SQUARELY APPLICABLE TO THE ASSESSEES CASE. W E , ACCORDINGLY , FOLLOWING THE DECISION IN THE CASE OF VIPIN P. MEHTA VS. ITO (SUPRA), ALLOW THE CLAIM OF THE ASSESSEE AND DELETE THE ADDITION, ACCORDINGLY, GROUND NO. 2 IS ALLOWED . 12. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OP EN COURT ON 30 - 09 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 30 TH SEPTEMBER, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I, THANE 4 THE CIT - I, THANE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE