Krishna Kumar Agarwal, Bhubaneswar V. ITO, Khurda

ITA 131/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4409 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Keywords: Principle of natural justice
• Section: 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 131/CTK/2011 / ASSESSMENT YEAR 2006 - 07 KRISHNA KUMAR AGARWAL, A - 1/2, NAYAPALLI, BHUBANESWAR PAN: ABUPA 8704 A - - - VERSUS - INCOME - TAX OFFICER, KHURDA WARD, KHURDA. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : NONE / FOR THE RESPONDENT: / SHRI S.C.MOHANTY, DR / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER. THIS APPEAL BY TH E ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN DISMISSING THE ASSESSEES CONTENTIONS FOR WANT OF PROSECUTION. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR FILED THE RETURN OF INCOME OF 1.08 CRORES WHICH WAS SCRUTINIZED AND ASSESSED U/S.143(3) WHEN THE SOLITARY ITEM OF DISALLOWANCE WAS 7,50,000 UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME - TAX ACT,1961 ON THE OBSERVATION OF THE ASSESSING OFFICER THAT TAX HAD NOT BEEN DEDUCTED UNDER THE PR OVISIONS OF SECTION 194C ON THE ASSESSEE ENGAGING TRANSPORT CONTRACTORS FOR TRANSPORTATION. 3. NONE HAVE APPEARED ON BEHALF OF THE ASSESSEE APPELLANT. WE PROCEED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LEARNED DR AND ON THE BASIS OF THE MATERIAL AVAILA BLE ON RECORD. 4. THE ASSESSEE HAS AGITATED THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF TAX (APPEALS) WAS I.T.A.NO. 131/CTK/2011 2 NOT LEGALLY JUSTIFIED TO PASS THE APPEAL ORDER EX - PARTE AND CONFIRM THE ORDER OF THE ASSESSMENT WHICH IS ILLEG AL AND UNWARRANTED. THE NOTICE OF THE HEARING OF THE APPEAL HAS NOT BEEN SERVED TO THE APPELLANT. MOREOVER THE APPELLANT HAS BEEN RESIDING IN THE SAME ADDRESS FOR LAST 20 YEARS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE A SSESSING OFFICER WAS NOT LEGALLY JUSTIFIED TO DISALLOW PAYMENT MADE TO M/S. MANYZONE TRADING COMPANY AMOUNTING TO 7,50,000 TOWARDS TRANSPORTATION CHARGES ON ACCOUNT OF NON - DEDUCTION OF TDS U/S. 194C OF THE INCOME TAX ACT, 1961. THE APPELLANT HAS NOT DEDU CTED TDS ON TRANSPORTATION CHARGES AS THE TRANSPORTER HAD LESS THAN 2 TRUCKS. THE LIABILITY OF DEDUCTING TDS ON PAYMENT OF TRANSPORTATION CHARGES ARISES ONLY WHEN THE TRANSPORTER HAS MORE THAN 2 TRUCKS. IN THE INSTANT CASE, THE TRANSPORTER HAS DULY FILED T HE STATUTORY DECLARATION IN FARM NO. 15 - I DULY FILLED IN AND SIGNED. MOREOVER THE APPELLANT ALSO FILED THE ANNUAL TDS RETURN IN PRESCRIBED FORM 15 - J BEFORE THE LEARNED COMMISSIONER OF INCOME TAX, BHUBANESWAR BUT THE ORDER HAS BEEN PASSED IGNORING THE SAME, AS SUCH, THERE HAS BEEN APPARENT ERROR OF RECORD AND THE CONSEQUENT ORDER IS NOT LEGALLY SUSTAINABLE. NO DUE AND PROPER OPPORTUNITY HAS BEEN EXTENDED BY THE ASSESSING OFFICER BEFORE PASSING THE ORDER OF ASSESSMENT AS SUCH, THERE HAS BEEN CLEAR VIOLATION O F PRINCIPLES OF NATURAL JUSTICE. MOREOVER THE LEARNED CIT (APPEALS) SHOULD HAVE PASSED THE ORDER ON MERITS CONSIDERING THE SUBMISSION OF THE APPELLANT MADE IN THE GROUNDS OF APPEAL AND EVIDENCES AVAILABLE IN RECORD. THERE HAS BEEN NON - CONSIDERATION AND MIS - CONSIDERATION OF FACTS AND EVIDENCES AVAILABLE IN RECORD AND THE ORDER OF ASSESSMENT HAS BEEN PASSED PURELY BASING UPON SUSPICIOUS AND SURMISES IGNORING THE SAME, AS SUCH, THERE HAS BEEN APPARENT ERROR OF LAW AND RECORD IN THE CIRCUMSTANCES OF THE CASE AN D THE ORDER PASSED BY THE LEARNED CIT (APPEALS) IS NOT LEGALLY SUSTAINABLE. THE ORDERS PASSED BY THE I.T.A.NO. 131/CTK/2011 3 FORUMS BELOW MAKING ADDITIONS ON THE INCOME RETURNED ARE OTHERWISE ILLEGAL, ARBITRARY AND WITHOUT JURISDICTION, AS SUCH, LIABLE TO BE QUASHED. 5. THE LEAR NED DR SUBMITTED THAT THE ASSESSING OFFICER WAS NOT GIVEN THE BENEFIT OF GOING THROUGH THE ANNUAL TAX DEDUCTED RETURN FILED BY THE ASSESSEE IN FORM 15 - J. HE WAS CONSTRAINED TO DISALLOW THE SUM OF 7,50,000 FOR WANT OF EXPLANATION TO THIS SCORE ON HIS ISSU E OF NOTICE U/S.143(2). HE PRAYED THAT THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THESE PURPORTED FORMS NO.15 - I AND 15 - J. 6. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND AFTER HEARING THE LEARNED DR, WE ARE INCLIN ED TO HOLD THAT THE ASSESSING OFFICER HAS GIVEN NO CLUE OR REASON TO DISALLOW TRANSPORT EXPENSES PAID TO ONE M/S. MANYZONE TRADING COMPANY WITHOUT TDS U/S.194C. THE LEARNED CIT(A) ON THE OTHER HAND HAS DISMISSED THE ASSESSEES CONTENTION WITHOUT OBSERVING AS TO HOW THE DOCUMENTS FILED WITH THE DEPARTMENT COULD NOT BE PERUSED BY THE ASSESSING OFFICER FOR CONSIDERATION FOR WANT OF APPEARANCE OF THE APPELLANT BEFORE HIM. WE ARE OF THE CONSIDERED VIEW THAT WHEN DEDUCTION OF TAX AT SOURCE INVOLVES TWO SEPARATE A UTHORITIES FOR VERIFYING THE PAYMENTS AND RECEIPTS OF TAX IS ALREADY AVAILABLE TO THE AUTHORITIES SHOULD NOT BE A GROUND FOR APPLYING THE DEEMING PROVISIONS OF SECTION 40(A)(IA) AND THEN HOLD THE SAME AS DISALLOWA BLE FOR WANT OF TDS U/S.194C. THE ASSESSEE RETURNING INCOME AFTER CLAIMING SUCH EXPENSES INDICATES THE AMOUNT OF TAX DEDUCTED AT SOURCE ON PAYMENTS SUBJECT TO TDS CLAIMED IN THE PROFIT & LOSS ACCOUNT. THE AUDITORS IN THEIR REPORT ALSO HAVE TO DISCLOSE THE SAME WHICH DOES NOT APPEAR TO HAVE BEEN GONE THROUGH BY THE ASSESSING OFFICER. IN THE FITNESS OF THE PROCEDURE AS LAID OUT FOR SUCH GIVING CREDIT OF TAX AT SOURCE FOR CLAIMING EXPENSES WE RESTORE THE ISSUE TO THE FILE OF THE LEARNED CIT(A) WHO, AFTER AFFOR DING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD, WILL I.T.A.NO. 131/CTK/2011 4 DETERMINE AS TO HOW SUCH LAPSES NOT ON THE PART OF THE ASSESSEE HAVE OCCURRED AND NOT DUE TO ASSESSEES DEFAULT. THE SYSTEM EXISTING IN THE DEPARTMENT REQUIRES INTER SE VERIFICATION OF THE CREDIT BE GIVEN TO THE ASSESSEEIS TO BE RECONCILED WITH THE AMOUNT OF TOTAL TAX COLLECTED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 13 TH MAY, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DAT E: 13 TH MAY, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : KRISHNA KUMAR AGARWAL, A - 1/2, NAYAPALLI, BHUBANES WA. 2 / THE RESPONDENT: INCOME - TAX OFFICER, KHURDA WARD, KHURDA. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.