M/s. Trimit Builders, Pune V. Pr. Commissioner of Income tax -2, Pune

ITA 1405/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1000 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 02-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NANDITA KANCHAN
• Keywords: Retrospective amendment; TDS; Set aside
• Section: 143(3); 40(a)(ia); 263

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1405/PUN/2017 / ASSESSMENT YEAR : 2012-13 M/S. TRIMIT BUILDERS, 283, BUDHWARPETH, PUNE 411 002. PAN : AAAFT6769K. . / APPELLANT. V/S THE PRL.COMMISSIONER OF INCOME TAX 2, PUNE. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : MRS. NANDITA KANCHAN. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 2, PUNE DT.30.03.2017 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF PROMOTERS AND BUILDERS. ASSESSEE FILED ITS RETURN OF INCOM E FOR A.Y. 2012-13 ON 31.03.2014 DECLARING TOTAL INCOME AT RS.1,19,55,15 7/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMEN T WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.23.03.2015 AND THE TOTAL INCOME WAS / DATE OF HEARING : 23.07.2019 / DATE OF PRONOUNCEMENT: 06.09.2019 2 DETERMINED AT RS.1,21,84,647/-. SUBSEQUENTLY, LD.PCIT VID E ORDER DT.30.03.2017 PASSED U/S 263 OF THE ACT CONCLUDED THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE IN VIEW OF THE FACT THAT ASSESSEE HAD DEDUC TED TDS ON THE INTEREST EXPENDITURE OF RS.7,91,708/- BUT THE SAME WAS NO T PAID WITHIN THE DUE DATE U/S 200(1) OF THE ACT AND THEREFORE THE S AME SHOULD HAVE BEEN DISALLOWED BY THE AO U/S 40(A)(IA) OF THE ACT. LD.PCIT NOTED THAT AO HAD NOT MADE ANY DISALLOWANCE U/S 40(A)(IA) OF THE ACT AN D THEREFORE THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE AND HE ACCORDINGLY SET ASIDE THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.PCIT, ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED PR.CIT-2,PUNE ERRED IN LAW AND ON F ACTS IN SETTING ASIDE THE ISSUE OF DEDUCTION OF INTEREST, BY INVOKING PRO VISIONS OF SECTION 40(A)(IA) OF THE ITA, 1961 I . E. FOR DEDUCTION AND NON-PAYMENT OF TDS ON INTEREST IN AY 2012-13. 2. THE LEARNED CIT-2, PUNE OUGHT TO HAVE APPRECIATE D THAT, AS THE SAID TDS OF RS.79,171/- WAS INDEED PAID ON 28/03/2013 WITH I NTEREST FOR DELAY, DEDUCTION FOR INTEREST EXPENDITURE WAS AVAILABLE IN AY 2013-14, AS PER THE SCHEME OF ITA, 1961, AND AS SUCH, THE SAID DELAY IN PAYMENT OF TDS DOES NOT LEAD TO ANY PREJUDICE TO THE REVENUE IN ABSOLUT E SENSE. 3. THE LEARNED PRO CIT-2, PUNE ERRED IN LAW AND ON FACTS IN DISALLOWING INTEREST EXPENDITURE OF RS. 7,91,708/- U/S 40(A)(IA ) OF THE ACT, WITHOUT CONSIDERING THE FACT THAT PAYEE HAD FILED ROI AND O FFERED THE SAME TO TAX. THE LEARNED PRO CIT-2, PUNE OUGHT TO HAVE APPRECIAT ED THAT SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND IT HAS RETROSPECTIVE EFFECT W.E.F. 01/04/2005 AND AS SUCH, THE EXPENDITURE OUGH T TO HAVE BEEN ALLOWED IN CURRENT YEAR. 4. THE LEARNED PRO CIT-2, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT ANY ASSESSMENT ORDER OUGHT NOT TO BE HELD AS ELIGIBLE FOR 263 REVIEW MERELY FOR NON- APPLICATION OF MIND SINC E ACTION U/S 263 IS DEPENDENT ON TWIN CONDITIONS OF ERRONEOUS ORDER AS WELL AS PREJUDICE TO THE INTEREST OF REVENUE. 5. THE LEARNED CIT-2, PUNE ALSO ERRED IN NOT APPREC IATING THAT THE VERY SAME ISSUE WAS DECIDED AGAINST THE HONORABLE DELHI HIGH COURT IN THE CASE OF ANSAL LANDMARK PRIVATE LIMITED - 377 ITR 635 . THE LEARNED CLT-2, PUNE FURTHER ERRED IN NOT DEALING WITH THE SAID PRO POSITION DESPITE THE APPELLANT HAVING RAISED THE SAME DURING THE 263 PRO CEEDINGS. FURTHER, THE LEARNED CIT-2, PUNE ERRED I N NOT APPRECIATING THAT THE SAID ISSUE AT BEST IS CONTROVERSIAL AND FOR WHICH, 263 PROCEEDINGS CAN'T BE INITIATED. 3 6. ALTERNATIVELY AND WITHOUT PREJUDICE TO GROUND NO .3 ABOVE, THE LEARNED PR O CIT- 2, PUNE OUGHT TO HAVE DIRECTED FOR ALLOWING DE DUCTION OF THE IN TER E ST EXPENDITURE IN AY 2013-14, CONSIDERING THE ACTUAL P AYMENT OF TDS AS ON 28.03.2013. 3. ON THE DATE OF PRESENT HEARING NONE APPEARED ON BE HALF OF THE ASSESSEE NOR WAS ANY ADJOURNMENT APPLICATION FILED. CON SIDERING THE FACT THAT THE ISSUE IN THE PRESENT CASE IS COVERED BY VARIOUS DECISIONS OF PUNE TRIBUNAL, WE PROCEED TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 4. BEFORE US, LD. D.R. FAIRLY SUBMITTED THAT BEFORE LD.PCIT IT WAS SUBMITTED BY THE ASSESSEE THAT THE RECIPIENTS OF THE IN TEREST HAD OFFERED THE INTEREST AMOUNT RECEIVED FROM THE ASSESSEE TO TAX AND HAD ALSO PAID TAX THEREON AND THEREFORE RELYING ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP PVT. LTD., REPORTED IN (2015) 377 ITR 635 NO DISALLOWANCE U/S 40(A)(IA) O F THE ACT WAS CALLED FOR. IT WAS ALSO SUBMITTED THAT THE HONBLE DE LHI HIGH COURT HAS HELD THAT INSERTION OF SECOND PROVISO TO SEC.40(A)(IA) O F THE ACT TO BE DECLARATORY AND CURATIVE IN NATURE AND HAD RETROSPECTIV E EFFECT WITH EFFECT FROM 01.04.2005 BEING THE DATE FROM WHICH SEC.40(A)(IA) OF THE A CT WAS INSERTED. SHE SUBMITTED THAT LD.PCIT DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE INSERTION OF 2 ND PROVISO BY THE FINANCE ACT, 2012 CANNOT BE TREATED AS RETROSPECTIVE. IN SUC H CIRCUMSTANCES, SHE SUBMITTED THAT THE APPEAL BE DECIDED ACCORDINGLY. 5. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. 6. BEFORE US, ASSESSEE HAS CHALLENGED THE ORDER PASSED BY LD. PCIT U/S 263 OF THE ACT. LD.PCIT PASSED ORDER U/S 263 O F THE ACT AS HE WAS 4 OF THE VIEW THAT THE ASSESSEE HAD NOT DEPOSITED THE TD S ON INTEREST BEFORE THE DUE DATE U/S 200(1) OF THE ACT. FURTHER HE D ID NOT ACCEPT THE SUBMISSION OF ASSESSEE ABOUT THE INSERTION OF 2 ND PROVISO BY FINANCE ACT, 2012 TO BE RETROSPECTIVE. WE FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP PVT. LTD. (SUPRA) HAS HELD THAT INSERTION OF 2 ND PROVISO TO SEC.40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM 0 1.04.2005 BEING THE DATE FROM WHICH SEC.40(A)(IA) OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2012. THE AFORESAID DECISION OF HONBLE DELHI HIGH COUR T HAS BEEN FOLLOWED BY THE PUNE TRIBUNAL IN VARIOUS DECISIONS. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE ORDER OF AO IN NOT DISALLOWING THE INTEREST U/S 40(A)(IA) OF THE ACT CANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS CONTEMPLATED U/S 263 OF TH E ACT. WE THEREFORE HOLD THAT LD.PCIT WAS NOT JUSTIFIED IN INVO KING THE PROVISIONS. WE THEREFORE SET ASIDE THE ORDER OF LD. PCIT . THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 6 TH DAY OF SEPTEMBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 6 TH SEPTEMBER, 2019. YAMINI 5 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. PR.CIT-2, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.