Asst.CIT, Circle-9(1), Hyderabad V. M/s Venkateswara Mining Services, Hyderabad

ITA 1333/HYD/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69799 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL BABU
• Keywords: Retrospective amendment; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1333/HYD/2012 ASSESSMENT YEAR 2006-07. ACIT, CIR-9(1), -V- M/S. VENK ATESWARA MINING SERVICES, HYDERABAD. HYDERABAD. P AN:AAFFV 3013P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VAMSHI KRISHN A RESPONDENT BY SHRI SUNIL BABU DATE OF HEARING 26-08-2013 DATE OF PRONOUNCEMENT 05-09-2013 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED A GAINST THE ORDER DATED 1-6-2012 OF CIT (A)-IV, HYDERABAD PASS ED IN APPEAL NO.0176/11-12/CIT (A) -VI PERTAINING TO ASSESSMENT YEAR 2006- 07 DELETING THE ADDITION MADE ON ACCOUNT OF DISALLO WANCE MADE U/S 40(A)(IA) OF THE ACT. 2. BRIEFLY THE FACTS ARE THE ASSESSEE IS A PARTNE RSHIP FIRM DERIVING INCOME FROM EXECUTION OF CONTRACT WORK. F OR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE FILED ITS RE TURN ON 31- 10-2006 DECLARING A TOTAL INCOME OF RS.6,58,160/-. INITIALLY, THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATE D 18-2- 2 ITA NO.1333 OF 2012 VENKATESWEARA MINING SERVICES, HYD. 2008 DETERMINING THE TOTAL INCOME AT RS.7,58,160/-. SUBSEQUENTLY, THE ASSESSING OFFICER HAVING REASON T O BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT INITIATED ACTION U/S 147 OF THE ACT BY ISSUING A NOTICE U/S 148 ON 22-4-2010. DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOT ICED THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.74,86,240/- TO THE PROFIT & LOSS A/C TOWARDS SUB-CONTRACT AMOUNT PAYABLE TO M/S GANESH TRADERS TOWARDS BLASTING CHARGES. HE FURTHER NOTI CED THAT THE AMOUNT WAS DEBITED ON VARIOUS DATES DURING THE YEAR AS PER THE DETAILS MENTIONED IN THE TDS CERTIFICATE DATED 30-1 0-2006. HOWEVER, TDS WAS REMITTED INTO GOVERNMENT ACCOUNT O N 28-10- 2006 AFTER EXPIRY OF TIME PRESCRIBED UNDER SUB-SECT ION (1) OF SECTION 200. HE THEREFORE PROPOSED TO DISALLOW THE EXPENDITURE CLAIMED U/S 40(A)(IA) OF THE ACT. THE ASSESSEE HOW EVER OBJECTED BY SUBMITTING THAT AS PER THE AMENDED PROVISIONS OF 40(A)(IA), THE TDS IS CREDITED INTO GOVERNMENT ACCOUNT WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME, HENCE, NO DISALLOWA NCE CAN BE MADE U/S40(A)(IA). IT WAS FURTHER CONTENDED BY THE ASSE SSEE THAT THE AMENDMENT BEING CLARIFICATORY IN NATURE SHOULD BE D EEMED TO HAVE BEEN BROUGHT RETROSPECTIVELY WITH EFFECT FROM 1-4-2005. THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT THE CO NTENTION OF THE ASSESSEE AND DISALLOWED THE SUB-CONTRACT PAYMEN T OF RS.74,86,240/- U/S 40(A)(IA) AND ADDED IT TO THE TO TAL INCOME OF THE ASSESSEE. THE ASSESSEE BEING AGGRIEVED OF THE ASSESSMENT SO MADE PREFERRED AN APPEAL BEFORE THE CIT (A). 3. THE CIT (A) AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE IN THE LIGHT OF THE DECISION OF HONBLE C ALCUTTA HIGH COURT IN CASE OF VIRGIN CREATORS AND OTHER DECISION S OF THE INCOME-TAX APPELLATE TRIBUNAL WHEREIN IT IS HELD TH AT THE AMENDMENT BROUGHT TO SECTION 40(A)(IA) IS CLARIFICA TORY IN 3 ITA NO.1333 OF 2012 VENKATESWEARA MINING SERVICES, HYD. NATURE, IS RETROSPECTIVE IN ITS APPLICATION AND IF THE TDS AMOUNT IS REMITTED TO THE GOVERNMENT ACCOUNT WITHIN THE DUE D ATE OF FILING OF RETURN AS PRESCRIBED U/S 139(1) OF THE ACT, NO D ISALLOWANCE U/S 40(A)(IA) CAN BE MADE HELD IN THE FOLLOWING MANNER: - THE INCOME-TAX APPELLATE TRIBUNAL IN ALL THE DECIS IONS CITED ABOVE HAS RELIED ON THE DECISION OF THE SUPREME COU RT IN THE CASE OF ALOM EXTRUSIONS PVT. LTD., AND CONCLUDED TH AT THE PROVISION OF SEC. 40(A)(IA) AS AMENDED BY FINANCE A CT, 2010 IS CLARIFICATORY IN NATURE AND THEREFORE APPLICABLE WI TH RETROSPECTIVE EFFECT FROM 1-4-2005. I ALSO FIND THAT THE SPECIAL BENCH OF THE INCOME-TA X APPELLATE TRIBUNAL MUMBAI HAD HELD THAT THE AMENDMENT WAS PRO SPECTIVE, IN THE CASE OF BHARATI SHIPYARD LTD 132 ITD 53 (MUM ) (SB). HOWEVER, SUBSEQUENTLY, THE CALCUTTA HIGH COURT HELD IN THE CASE OF VIRGIN CREATORS THAT THE AMENDMENT WAS CLARIFICA TORY AND RETROSPECTIVE IN ITS APPLICATION. THE CONFLICT BET WEEN THESE TWO DECISIONS WAS CONSIDERED N THE FOLLOWING DECISIONS OF THE INCOME-TAX APPELLATE TRIBUNAL. 1. M/S. ALPHA PROJECT S SOCIETY P. LTD. VS. DCIT (INCO ME-TAX APPELLATE TRIBUNAL, AHMEDABAD) 2. RAJAMAHENDRI SHIPPING & OIL FIELD SERVICES LTD. VS. ACIT (INCOME-TAX APPELLATE TRIBUNAL VIZAG) 3. THE INCOME-TAX APPELLATE TRIBUNAL, IN BOTH THESE DE CISIONS, FOLLOWED THE DECISION OF THE CALCUTTA HIGH COURT A ND HELD THAT THE AMENDMENT TO SEC. 40(A)(IA) BY THE FINANCE ACT, 2010, W.E.F. 1-4-2010 WAS RETROSPECTIVE IN ITS APPL ICATION. RESPECTFULLY FOLLOWING THESE DECISIONS OF THE INCOM E-TAX APPELLATE TRIBUNAL, IT IS HELD THAT THE ASSESSEE HA D TIME AVAILABLE TILL THE DUE DATE FOR FILING THE RETURN O F INCOME U/S 139(1), FOR PAYMENT OF TDS AND SINCE THE ASSESSEE H AD REMITTED THE TDS INTO GOVERNMENT ACCOUNT ON 28-10-2 006, IT HAD COMPLIED WITH THE PROVISIONS OF SEC. 40(A)(IA) AND NO DISALLOWANCE WAS CALLED FOR. IN THE RESULT, THE APP EAL IS ALLOWED. 4 ITA NO.1333 OF 2012 VENKATESWEARA MINING SERVICES, HYD. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL ON RECORD. ON A PERUSAL OF TH E ASSESSMENT ORDER, IT IS VERY MUCH CLEAR THAT THE ASSESSING OFF ICER HAS HIMSELF HAS NOTED THE FACT THAT THE ASSESSEE HAS REMITTED T HE TDS AMOUNT INTO THE GOVERNMENT ACCOUNT ON 28-10-2006 WH ICH IS WITHIN THE DUE DATE OF FILING THE RETURN U/S 139(1 ) OF THE ACT. THE HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS. VIR GIN CREATIONS IN ITA NO.302 OF 2011 GA-3200/2011 DECIDED ON 23-11-2 011 HAS HELD THAT THE AMENDMENT TO SECTION 40(A)(IA) BY TH E FINANCE ACT, 2010 WILL APPLY RETROSPECTIVELY. FOLLOWING TH E AFORESAID DECISION OF THE HONBLE CALCUTTA HIGH COURT, DIFFER ENT BENCHES OF TRIBUNAL INCLUDING THE INCOME-TAX APPELLATE TRIBUNA L, HYDERABAD BENCH IN CASE OF JCIT VS. M/S SHALIMAR AGRO-TECH PV T. LTD., HYDERABAD IN ITA NO.1877/HYD/2011 HAVE HELD THAT IF THE TDS AMOUNT IS REMITTED INTO GOVERNMENT ACCOUNT WITHIN THE DUE DATE OF FILING OF RETURN AS PROVIDED U/S 139(1) OF THE ACT, THEN NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF THE ACT. THEREFORE, CONSIDERING THE FACT THAT THE ASSESSEE HAS REMITT ED THE TDS AMOUNT WITHIN THE DUE DATE OF FILING OF RETURN AS P RESCRIBED U/S 139(1) OF THE ACT, IN OUR VIEW, THE CIT (A) WAS JUS TIFIED IN HOLDING THAT NO DISALLOWANCE CAN BE MADE U/S 40(A)(IA) OF T HE ACT. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A) WHICH IS ACCORDINGLY UPHELD. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5 -9-2013. SD/- ( CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 5 TH SEPT. 2013 5 ITA NO.1333 OF 2012 VENKATESWEARA MINING SERVICES, HYD. COPY TO:- 1) ACIT, CIR-9(1), HYDERABAD. 2) M/S. VENKATESWARA MINING SERVICES, GREEN HILLS C OLONY, SAROORNAGAR, HYDERABAD. 3) CIT (A)VI, HYDERABAD. 4) CIT-VI,, HYDERABAD. 5.THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERA BAD. JMR* *