DCIT, CC-XXVII, Kolkata, Kolkata V. Sri Satyanarayan Pandey, Howrah

ITA 1256/KOL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1821 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Additional evidence; Reassessment proceedings
• Section: 143(3); 194C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S.S. VISWANETHRA RAVI, JM &DR. A.L. SAINI, AM ./ITA NO.1256/KOL/2014 ( / ASSESSMENT YEAR: 2007-08) D.C.I.T, CC-XXVII, KOLKATA POORVA 5 TH FLOOR, ROOM NO.510, 110, SHANTIPALLY. VS. SRI SATYANARAYAN PANDEY 13 PTR SIDING, SHIBPUR, SHALIMAR, HOWRAH 711102. ./ ./PAN/GIR NO. : AFOPP 2340 B (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI SAURABH KUMAR, ADDL. CIT(DR) RESPONDENT BY :SHRI SUBASH AGARWAL, ADVOCATE / DATE OF HEARING : 18/10/2017 /DATE OF PRONOUNCEMENT : 17/01/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINING TO ASSESSMENT YEAR 2007-08, IS DIRECTED AGAINST AN ORDER PASSED BY THE CIT(A)-CENTRAL-II, KOLKATA, IN APPEAL NO.44/CC-XXVII/CIT(A)C-II/13-14, DATED 14.03.2014, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S 147/143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 31.12.2012. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN HOLDING THAT FILING OF FORM 15I IN FORM 15J AFTER THE STIPULATED TIME BEFORE THE CONCERNED CIT WAS A TECHNICAL FAULT FOR WHICH PROVISIONS OF SECTION 40(A)(IA) CANNOT BE INVOKED. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ACCEPTING THE VIEW OF THE ASSESSEE THAT THE DETAILS OF FREIGHT PAYABLE, FILED IN COURSE OF REGULAR ASSESSMENT, WERE THE DETAILS OF BROKERS/AGENTS AND NOT THE LORRY OWNERS. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE DETAILS OF FREIGHT PAYABLE FILED IN COURSE OF REGULAR ASSESSMENT WERE THE DETAILS OF BROKERS/AGENTS AND NOT THE SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 2 LORRY OWNERS AND THUS ALLOWING RADICAL SHIFT OF STAND BY THE ASSESSEE IN COURSE OF APPELLATE PROCEEDINGS. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.156,64,495/- U/S 40(A)(IA). 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE A.O. HAS ACCEPTED THE CONTENTION OF THE ASSESSEE RELATING TO FREIGHT PAYABLE ISSUE IN A.Y. 2006-07. 6. THAT THE DEPARTMENT CRAVES LEAVE TO ADD, MODIFY OR ALTER ANY OF THE GROUNDS OF APPEAL AND OR ADDUCE ADDITIONAL EVIDENCE AT THE TIME OF HEARING OF THE CASE. 3. THE BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME OF RS.3,01,533/-.THE ASSESSEE IS A PROPRIETOR OF A CONCERN UNDER THE NAME & STYLE OF M/S LAXMI ROADWAYS AND WAS ENGAGED IN THE BUSINESS OF TRANSPORT. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S 143(2) OF THE ACT AND THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) ON 31.12.2009. LATER, THE ASSESSEE`S CASE WAS REOPENED UNDER SECTION 147 OF THE I.T. ACT, 1961. THE ASSESSING OFFICER NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ALLOWED TDS OF RS.2,38,147/-( RS.2,30,801 + RS.7,346) DEDUCTED BY STEEL AUTHORITY OF INDIA LTD. ON THE PAYMENT OF BILTY, FREIGHT CHARGES OF RS.1,06,13,945/-( RS.1,02,86,600 + RS.3,27,345) TO ASSESSEE ON 31.03.2007. BUT FROM THE LIST OF SUNDRY DEBTORS IT WAS REVEALED THAT AN AMOUNT OF RS.84,13,343/- INSTEAD OF RS.1,06,13,945/-, WAS RECEIVED AS BILTY FREIGHT BY THE ASSESSEE FROM THE STEEL AUTHORITY OF INDIA LTD. THEREFORE, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT ONLY RS.84,13,343/-, INSTEAD OF RS.1,06,13,945/-, RECEIVED FROM STEEL AUTHORITY OF INDIA LTD. WAS CREDITED TO P&L ACCOUNTS. THEREFORE, AN AMOUNT OF RS.2,20,0602/- (RS.1,06,13,945 RS.84,13,343) HAS ESCAPED ASSESSMENT. IT WAS ALSO NOTED BY AO THAT DURING THE YEAR, THE ASSESSEE HAD PAID TRUCK/CRANE HIRE CHARGES OF RS.1,56,64,496/- WHICH WAS ACTUALLY FREIGHT CHARGES AS PER DETAILS OF LORRY FREIGHT PAYABLE. ON SCRUTINY OF TAX AUDIT REPORT [CLAUSE 27(A)],THE AO FOUND THAT ASSESSEE DID NOT DEDUCT ANY TAX AT SOURCE WHILE PAYING FREIGHT CHARGES OF RS.1,56,64,496/-. IT WAS NOTED THAT SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 3 THE ASSESSEE HAD NOT FURNISHED THE DETAILS OF FREIGHT CHARGES TO THE INCOME TAX AUTHORITIES, IN FORM NO.15J ON OR BEFORE JUNE 30, AFTER THE EXPIRY OF FINANCIAL YEAR 2006-07. THIS NON-DEDUCTION OF TDS FROM THE SUB-CONTRACTOR ATTRACTS SECTION 40(A)(IA) OF THE ACT AND ACCORDINGLY THE WHOLE AMOUNT OF PAYMENT OF TRUCK/CRANE HIRE CHARGES OF RS.1,56,64,496/- WAS REQUIRED TO BE DISALLOWED AND THEREFORE, REASSESSMENT PROCEEDINGS WERE INITIATED AND NOTICE UNDER SECTION 147/148 OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, A SUBMISSION WAS FILED BY THE ASSESSEE ON 01.06.2012 REQUESTING TO TREAT THE ORIGINAL RETURN AS THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT HE HAD ALREADY SUBMITTED FORM NO.15I DURING THE REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. THE AO NOTED THAT HAD THE ASSESSEE BEEN SUBMITTED FORM NO.15-I DURING THE REGULAR ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE ASSESSEE WOULD HAVE ALSO SUBMITTED THE SAME DURING THE REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. SINCE THE ASSESSEE FAILED TO SUBMIT FORM NO.15I AND OTHER DOCUMENTS, AS REQUIRED BY AO, DURING THE REASSESSMENT PROCEEDINGS, THEREFORE AO, MADE ADDITION OF RS.1,56,64,496/-. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE DID NOT SUBMIT ANY REPLY. HOWEVER, DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT FORM NO.15I WAS SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF REGULAR ASSESSMENT U/S 143(3) OF THE ACT. FURTHER, DURING THE REASSESSMENT PROCEEDINGS, ASSESSEE DID NOT SUBMIT FORM NO.15I. THEREFORE, ASSESSING OFFICER DISALLOWED RS.1,56,64,496/- U/S 40(A)(IA) OF THE ACT. 4. AGGRIEVED BY THE ADDITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD. CIT(A) OBSERVED THAT IN THE ASSESSEES CASE UNDER CONSIDERATION, THE ASSESSEE DID NOT DEDUCT THE TAX ON PAYMENT OF SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 4 LORRY FREIGHT CHARGES BECAUSE THE LORRY OWNERS FILED FORM15I FOR NON- DEDUCTION OF TAX. BESIDES, THERE WAS NO EVIDENCE ON RECORD THAT THERE WAS ANY CONTRACT BETWEEN THE ASSESSEE COMPANY AND LORRY OWNERS. THE LD. CIT(A) NOTED THAT IN THE REMAND REPORT, THE ASSESSING OFFICER HAS NOT DRAWN ANY ADVERSE INFERENCE ABOUT THE FORM 15I SUBMITTED BY THE ASSESSEE. THEREFORE, LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. NOT BEING SATISFIED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY.ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS DEFENDED THE ORDER PASSED BY THE LD. CIT(A) AND ALSO RELIED ON THE JUDGMENT OF HOBBLE ITAT IN THE CASE OF M/S PANDEY FREIGHT CARRIERS PVT. LTD, IN ITA NO.795/KOL/2014, DATED 13.09.2017, WHEREIN IT WAS HELD THAT SUBMISSION OF FORM NO.15I IS A TECHNICAL DEFAULT, ON WHICH THE ADDITION MADE U/S 40(A) (IA) OF THE ACT IS NOT MAINTAINABLE. 6. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT IN THE ASSESSEES CASE UNDER CONSIDERATION, THE LD. CIT(A) CONSIDERED THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AND IN THE REMAND REPORT HE DID NOT FIND ANY ADVERSE FINDINGS. WE NOTE THAT PRIMARILY THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT BECAUSE THE ASSESSEE FAILED TO FURNISH THE DETAILS OF LORRY FREIGHT CHARGES BEFORE THE INCOME TAX AUTHORITIES IN FORM NO.15J ON OR BEFORE JUNE 30 AFTER THE EXPIRY OF FINANCIAL YEAR 2006-07 AND ALSO THE ASSESSEE DID NOT FILE FORM NO.15I DURING THE REASSESSMENT PROCEEDINGS. HOWEVER, WE NOTE THAT ASSESSEE HAS CLAIMED TO FILE FORM NO. 15I IN THE REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. THE ASSESSEE HAS NOT DEDUCTED THE TDS U/S 194C OF THE ACT, FOR THE REASON THAT THE LORRY OWNERS SUBMITTED FORM 15I FOR NON- SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 5 DEDUCTION OF TAX AND SUCH FORMS WERE PRODUCED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. WE ARE OF THE VIEW THAT THE PROVISIONS OF THE SECTION 40(A)(IA) ARE NOT APPLICABLE TO THE ASSESSEE UNDER CONSIDERATION BECAUSE ASSESSEE HAD OBTAINED FORM 15I FROM THE RESPECTIVE LORRY OWNERS. IN THIS CASE, THE ASSESSEE CLAIMED THAT FORM NO.15I WERE PRODUCED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND BEING SATISFIED, ASSESSING OFFICER, DID NOT DRAW ANY ADVERSE INFERENCE. HOWEVER, AS PER THE ASSESSING OFFICER THERE WAS NO EVIDENCE ON RECORD THAT THE FORM NO.15I WERE PRODUCED BEFORE THE ASSESSING OFFICER DURING THE PROCEEDINGS U/S 143(3) OF THE ACT. THE ASSESSEE DID NOT PRODUCE FORM NO. 15I DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THEREFORE ASSESSING OFFICER DOUBTED THE GENUINENESS OF ASSESSEE`S CLAIM. WE NOTE THAT ASSESSEE HAD STATED BEFORE THE LD. CIT(A) THAT IT WAS BEYOND HIS CONTROL TO ASK THE ASSESSING OFFICER TO MAKE A NOTING IN THE ORDER SHEET OR THE ASSESSMENT ORDER THAT THE ASSESSEE PRODUCED FORM 15I BEFORE HIM. THE ASSESSEE COULD NOT PRODUCE THE FORM NO.15I IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS BECAUSE THEY WERE MISPLACED AND NOT READILY TRACEABLE. BUT THE FACT IS THAT THE ASSESSEE WAS IN POSSESSION OF FORM 15I AT THE TIME OF DISBURSEMENT OF FREIGHT PAYMENT. FURTHER, ON LOCATING THE FORM NO.15I AT A LATER STAGE, THE SAME WERE PRODUCED DURING THE APPELLANT PROCEEDINGS AND COPY THEREOF WAS FORWARDED TO THE ASSESSING OFFICER IN REMAND PROCEEDINGS. WE NOTE THAT IN REMAND REPORT, THE ASSESSING OFFICER DID NOT COMMENT ANYTHING ADVERSE ABOUT FORM NO.15I. THEREFORE, WE ARE OF THE VIEW THAT IT IS IMMATERIAL AS TO WHETHER THE FORM NOS. 15I WERE PRODUCED IN THE COURSE OF ORIGINAL PROCEEDINGS OR NOT, BUT THE FACT THAT IN REMAND PROCEEDINGS THE FORM NOS.15I WERE AVAILABLE TO THE ASSESSING OFFICER FOR HIS COMMENT AND VERIFICATION AND WE FIND THAT ASSESSING OFFICER DID NOT GIVE ANY ADVERSE COMMENT ABOUT FORM NOS.15I. THE ASSESSEE EXPLAINED THE REASONS, DUE TO WHICH, FORM 15I COULD NOT BE PRODUCED AT THE TIME OF RE-ASSESSMENT PROCEEDINGS. THE ASSESSEE SUBMITTED THE COPIES OF THOSE FORMS IN THE SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 6 COURSE OF APPELLATE PROCEEDINGS AND THE SAME WERE FORWARDED TO THE ASSESSING OFFICER. IT WAS OBSERVED THAT IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT DRAWN ANY ADVERSE INFERENCE WITH REGARD TO FORM 15I SUBMITTED BY THE ASSESSEE. THEREFORE, BASED ON THE FACTUAL POSITION DISCUSSED ABOVE, WE ARE OF THE VIEW THAT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABLE TO THE ASSESSEE UNDER CONSIDERATION BECAUSE HE HAD OBTAINED FORM 15I FROM THE RESPECTIVE LORRY OWNERS. WE ALSO NOTE THAT IN THE PRECEDING YEAR, UNDER THE SIMILAR FACTS OF THE ASSESSEE, THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF THE ASSESSEE AND NO ADVERSE REFERENCE WAS DRAWN FOR MAKING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. WE ALSO NOTE THAT SECTION 194C DEALS WITH PAYMENT TO CONTRACTOR AND SUB CONTRACTOR AND IN ORDER TO INVOKE THE PROVISIONS OF SECTION 194C THERE MUST BE A CONTRACT AND WE FIND THAT IN ASSESSEE`S CASE UNDER CONSIDERATION THERE IS NO ANY EVIDENCE ON RECORD OF THE ASSESSING OFFICER/CIT(A) THAT THERE WAS ANY CONTRACT BETWEEN THE ASSESSEE AND LORRY OWNERS/AGENTS, HENCE PROVISIONS OF SECTION 194C IS NOT APPLICABLE AND DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A) (IA) SHOULD BE DELETED. WE ALSO RELY OF THE JUDGMENT OF COORDINATE BENCH OF ITAT KOLKATA IN THE CASE OF M/S PANDEY FREIGHT CARRIERS PVT. LTD, IN ITA NO.795/KOL/2014, DATED 13.09.2017, WHEREIN IT WAS HELD THAT SUBMISSION OF FORM NO.15I IS A TECHNICAL DEFAULT, ON WHICH THE ADDITION MADE U/S 40(A)(IA) OF THE ACT IS NOT MAINTAINABLE. CONSIDERING THE FACTUAL POSITION DISCUSSED ABOVE, WE ARE OF THE VIEW THAT ORDER PASSED BY THE LD CIT(A) DOES NOT REQUIRE ANY INTERFERENCE, THEREFORE, WE CONFIRM THE ORDER PASSED BY LD CIT(A). 7.IN THE RESULT, THE APPEAL FILED BY THE REVENUE, IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17/01/2018. SD/- (S.S. VISWANETHRA RAVI) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 17/01/2018 [ RS SPS] SRI SATYANARAYAN PANDEY ITA NO.1256/KOL/2014 ASSESSMENT YEAR: 2007-08 PAGE | 7 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT- D.C.I.T, CC-XXVII, KOLKATA 2. / THE RESPONDENT-SRI SATYANARAYAN PANDEY 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.