M/s RMC Services, Chandigarh V. JCIT, Range IV, Chandiarh

ITA 1413/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8097 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYA INDER SINGH CIT
• Keywords: Retrospective amendment; TDS; Set aside
• Section: 40(a)(ia); 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1413/CHD/2019 ! ' / ASSESSMENT YEAR : 2011-12 M/S RMC SERVICES, SCO855,IST FOOR, NAC, MANUMAJRA, CHANDIGARH #$ THE JCIT, RANGE IV, CHANDIGARH % & ./PAN NO: AAJFR6827P %'/ APPELLANT )*%' /RESPONDENT HEARING THROUGH VIDEO CONFERENCING +, - . /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE - . / REVENUE BY : SHRI DAYA INDER SINGH, ADDL CIT . / 0 - ,1& /DATE OF HEARING : 30.07.2020 23'! - ,1& / DATE OF PRONOUNCEMENT : 17.08.2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 14.08.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS)-1, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)] . 2. THE SOLE ISSUE RAISED BY THE ASSESSEE IS REGARD ING THE CONFIRMATION OF DISALLOWANCE BY THE CIT(A) WHICH WA S MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE INCOME TAX A CT, 1961 (IN SHORT 'THE ACT') AS THE ASSESSEE DID NOT DEDUCT TAX AT SO URCE (TDS) ON ITA NO. 1413-C-2019 M/S RMC SERVICES, CHANDIGARH 2 INTEREST PAYMENT TO NON-BANKING FINANCE COMPANIES ( NBFC). 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE AMENDED PROVISIONS OF SECTION 201( 1) AND SECTION 40(A)(IA) OF THE ACT TO STATE THAT AS PER THE AMEND MENT MADE VIDE FINANCE ACT, 2012, AN ASSESSEE WILL NOT BE TREATED AS ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT ON ACCOUNT OF NON-DED UCTION OF TDS ON PAYMENT MADE TO A RESIDENT, IF HE HAS FURNISHED HI S RETURN OF INCOME AND HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMMUTING I NCOME IN SUCH RETURN OF INCOME AND HAS PAID THE DUE TAXES ON THE INCOME DECLARED BY HIM IN SUCH RETURN AND FURTHER THE ASSESSEE FUR NISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT. THE ASSESSEE, BEFORE US, HAS TAKEN THE PLEA THAT THOUGH THE ASSESSEE HAD NOT DED UCTED THE TAX AT SOURCE, HOWEVER, RECIPIENTS HAVE OFFERED THE INCOME IN THE COMPUTATION IN THEIR RETURNS OF INCOME AND, THEREFO RE, THE ADDITION IS NOT ATTRACTED IN THE CASE OF THE ASSESSEE AS PER THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. HE, IN TH IS RESPECT HAS RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. (2015) 61 TAXMAN.COM 45 (DELHI) WHEREIN IT HAS BEEN HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CUR ATIVE AND IT HAS A RETROSPECTIVE EFFECT FROM 01.04.2005. THE LD. COUN SEL HAS FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DEC ISION OF HON'BLE APEX COURT IN THE CASE OF HINDUSTAN COCA CO LA BEVERAGES (P) ITA NO. 1413-C-2019 M/S RMC SERVICES, CHANDIGARH 3 LTD. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THA T THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER TO PRODUCE THE RELEVANT EVIDENCE IN THIS RESPECT. 4. THE LD. DR HAS NOT OBJECTED TO THE SAME. 5. IN VIEW OF THE ABOVE, THE IMPUGNED ORDER OF THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE CONTENTIONS OF THE ASSESSEE THAT THE INTEREST PAID TO THE NON-BANKING FINANCE COMPANIES HAVE BEE N TAKEN INTO ACCOUNT BY THE SAID PAYEE IN THEIR RETURNS OF INCOM E AND DUE TAXED PAID AS PER THE RETURN OF INCOME AND FURTHER A CER TIFICATE TO THIS EFFECT BE FURNISHED BEFORE THE ASSESSING OFFICER AS PER THE REQUIREMENT OF THE SECTION. THE ASSESSING OFFICER A FTER CONSIDERATION OF THE MATTER WILL DECIDE THE ISSUE IN ACCORDANCE W ITH LAW. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 17.08.2020. SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 17.08.2020 .. ITA NO. 1413-C-2019 M/S RMC SERVICES, CHANDIGARH 4 4-),5676', / COPY OF THE ORDER FORWARDED TO : 1. %' / THE APPELLANT 2. )*%' / THE RESPONDENT 3. / 8, / CIT 4. / 8, ( )/ THE CIT(A) 5. 69),: , 1: ! , ;<=> / DR, ITAT, CHANDIGARH 6. =?0 / GUARD FILE 4 / / BY ORDER, @ / ASSISTANT REGISTRAR