ITO, Ward 5(1), Pune, Pune V. Smt. Rashmi Maiskar, Pune

ITA 1441/PUN/2009

• Counselvise Citation: 144124514 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 1441/PN/10 (ASSTT. YEAR 2006-07) INCOME-TAX OFFICER, .. APPELL ANT WD. 5(1) PUNE VS. SMT RASHMI MAISKAR, .. RESPONDENT F/B 46/2 SHIVANAND GARDEN, ALAKNANDA, KOTHRUD, PUNE PAN ADAPM6082H APPELLANT BY: SHRI SANJAY SI NGH RESPONDENT BY: NONE DATE OF HEARING : 14.09.2011 DATE OF PRONOUNCEMENT : 27.09.2011 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, PUNE DATED 10.09.2009, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2006-07. 2. AT THE TIME OF HEARING, SHRI SANJAY SINGH, LEARN ED DEPARTMENTAL REPRESENTATIVE APPEARED FOR THE REVENUE, WHEREAS NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESSEE. THE NOTICE OF HEARING WAS SENT T O THE ADDRESS OF THE RESPONDENT AS PER COLUMN 11 OF THE MEMO OF APPEAL FIL ED BY THE REVENUE WHICH HAS BEEN RECEIVED BACK UNSERVED WITH THE POSTAL REMARK UN CLAIMED. AS A RESULT, THE APPEAL IS DISPOSED OFF AFTER HEARING THE AP PELLANT-REVENUE ON MERITS AND EX PARTE QUA THE RESPONDENT-ASSESSEE. 2 3. THE ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL I S THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN D ELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) O F THE ACT. THE FACTS, IN BRIEF, ARE THAT ON SCRUTINY OF THE DETAILS OF LABOUR CHARGES PAID TO SUB-CONTRACTORS FOR FABRICATION CHARGES, PAINTING CHARGES, LANDSCAPING CH ARGES ETC., THE ASSESSING OFFICER FOUND THAT THE TAX DEDUCTED AT SOURCE ON THESE PAYMENTS WAS PAID BEYOND THE TIME LIMIT PERMISSIBLE UNDER THE ACT. ACCORDINGLY, HE DISALLOWED THE ENTIRE EXPENSES BY INVOKING PROVISIONS OF SECTION 40(A )(IA) OF THE ACT ON THE GROUND THAT THE TDS WAS NOT PAID WITHIN THE TIME LIM IT PERMISSIBLE UNDER CHAPTER XVII OF THE ACT. AGAINST THE AFORESAID ACTION, THE A SSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). 4. BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), IT WAS SUBMITTED BY THE ASSESSEE THAT THE TDS IN RESPECT OF THE IMPUGNED EXPENDI TURE WAS DEPOSITED BY THE ASSESSEE ON 31.3.2006 IN BANK OF BARODA, SENAPATI B APAT ROAD BRANCH, PUNE WHICH WAS ENCASHED/REALIZED BY THE BANK ON 4.4.200 6. RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V OGALE GLASS WORKS LTD. 25 ITR 529 (SC) AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VARDHAMAN CHEMICALS V COMMISSIONER OF CENTRAL EX CISE & CUSTOMS, 263 ITR 460 (BOM), IT WAS SUBMITTED THAT IF THE PAYME NT BY ANY CHEQUE IS ACCEPTED AND CHEQUE ON PRESENTATION IS HONOURED, PAYMENT RELATED BACK TO THE DATE WHEN THE CHEQUE WAS RECEIVED. ACCORDINGLY, THE ASSESSEE SUBMITTED THAT 31.3.2006 SHOULD BE CONSIDERED AS DATE OF PAYMENT OF T DS AND IF CONSIDERED SO, THERE WILL BE NO CAUSE FOR THE IMPUGNED DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. THE COMMISSIONER OF INCOME-TAX (APPEALS) FOUND FORCE IN THE SUBMISSIONS OF THE ASSESSEE AS ACCORDING TO HIM, SINCE THE CHEQ UES IN THE PRESENT CASE WERE DEPOSITED WITHIN THE DUE DATE AND WE RE DULY HONOURED, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE ASSESSE ES CLAIM OF DEDUCTION ON THE GROUND THAT THE PAYMENT OF TDS WAS M ADE AFTER THE EXPIRY OF THE PRESCRIBED TIME. APART FROM THE AUTHORITIES CITED BY THE ASSESSEE, THE CIT(A) 3 ALSO DREW SUPPORT FROM THE DECISION OF THE CHENNAI BENC H OF THE TRIBUNAL IN THE CASE OF P L HAULWEL TRAILERS LTD REPORTED AT 100 ITD 4 85. ACCORDINGLY, THE COMMISSIONER OF INCOME-TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW THE ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF THOSE EXPEN SES, FOR WHICH CHEQUES FOR TDS WERE DEPOSITED BY THE ASSESSEE IN THE BANK WITHIN THE PRESCRIBED TIME LIMIT. BEING AGGRIEVED WITH THE AFORE SAID DIRECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS), REVENUE IS IN APPE AL BEFORE US 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIV E HAS ASSAILED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) BY PO INTING OUT THAT THE DATE OF TAX PAYMENT IS THE DATE ON WHICH THE PROCEEDS OF THE CHEQUE ARE REALIZED AND CREDITED TO THE GOVERNMENT ACCOUNT. IN THIS REGARD, A REFERENCE HAS ALSO BEEN MADE TO A DEPARTMENTAL CIRCULAR NO. 3DATED 11.2.1969 . IT IS, THEREFORE, CONTENDED THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT CORRECT IN HOLDING THAT SINCE THE CHEQUE HAS BEEN DEPOSITED WITHIN THE DUE DATE AND HAS NOT BEEN DISHONOURED, THE DATE OF DEPOSITING OF THE C HEQUE IS TO BE TREATED AS THE DATE OF PAYMENT OF TAX. 6. WE HAVE CAREFULLY CONSIDERED THE OBJECTIONS PUTFORTH BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WITH REGARD TO ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). IN THIS CASE, THE REQUISITE TAX DE DUCTED AT SOURCE IN RESPECT OF THE IMPUGNED EXPENDITURE WAS DEPOSITED BY TH E ASSESSEE ON 31.3.2006 IN THE BANK WHICH WAS ENCASHED/REALIZED ON 4.4 .2006. THE COMMISSIONER OF INCOME-TAX (APPEALS) HELD THAT SINCE THE CHEQUE FOR THE TAX WAS DEPOSITED WITHIN THE DUE DATE AND THE SAME WAS NOT DISHONOURED, THE DATE OF PAYMENT WOULD RELATE BACK TO THE DATE OF DEPOSITIN G OF CHEQUE BY THE ASSESSEE WITH THE BANK. ONCE THE SAID PROPOSITION IS ACCEPT ABLE, IT WOULD ELIMINATE THE DISALLOWANCE ENVISAGED AS PER SECTION 40(A )(IA) OF THE ACT, SINCE IT WOULD NOT BE A CASE WHERE THE TDS WAS NOT PAID WITHIN THE TIME LIMIT PRESCRIBED BY THE ACT. BEFORE THE COMMISSIONER OF INCOME-TAX (APP EALS), ASSESSEE HAS IN 4 PARTICULAR REFERRED AND RELIED UPON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF VARDHAMAN CHEMICALS V. COMMISSIONER OF CENTR AL EXCISE & CUSTOMS (SUPRA). IN TERMS OF THE SAID JUDGMENT WHERE TH E ASSESSEE HAS TENDERED CHEQUES FOR PAYMENT OF TAX DUE, THE DATE OF PAYMENT WOULD RELATE BACK TO THE DATE OF TENDERING OF THE CHEQUE, IF THE CHEQ UE IS SUBSEQUENTLY NOT DISHONOURED. IN VIEW OF THE AUTHORITATIVE PRONOUNCEM ENT OF THE JURISDICTIONAL HIGH COURT, WE HAVE NO REASON TO INTERFERE WITH THE PROPO SITION UPHELD BY THE COMMISSIONER OF INCOME-TAX (APPEALS). 7. IT MAY ALSO BE MENTIONED HERE THAT THE AFORESAID VIEW IS SUPPORTED BY THE FOLLOWING CIRCULARS ISSUED BY THE CBDT:- (I) CIRCULAR NO. 261 DATED 8.8.1979, (II) CIRCULAR NO 265 DATED 11.4.1980. AS PER THE AFORESAID DEPARTMENTAL CIRCULARS, IF A CHEQU E OR DRAFT TENDERED IN PAYMENT OF GOVERNMENT DUES IS HONOURED ON PRESENTATI ON, THE PAYMENT IS DEEMED TO HAVE BEEN MADE ON THE DATE ON WHICH IT WAS HANDED OVER TO THE GOVERNMENT BANKERS. A SOMEWHAT CONTRARY VIEW CONTAINED I N PARA 6 OF THE CIRCULAR NO. 3 (SUPRA), RELIED BY THE LEARNED DEPARTM ENTAL REPRESENTATIVE BEFORE US, IS APPLICABLE TO CASES WHERE THE CHEQUES ARE TENDERED AT THE CHEQUE RECEIVING COUNTERS OPENED BY THE INCOME-TAX DEPARTMENT . THE AFORESAID DISTINCTION IS DISCERNIBLE FROM A READING OF THE RESPECTI VE DEPARTMENTAL CIRCULARS. OSTENSIBLY, IN THE CASE BEFORE US, THE DIRECTION OF TH E COMMISSIONER OF INCOME- TAX (APPEALS) IS IN A SITUATION WHERE THE CHEQUE FOR P AYMENT OF TAX HAS BEEN TENDERED AT THE AUTHORISED BANKS AND NOT AT THE RECEIV ING COUNTERS OPENED BY THE INCOME-TAX DEPARTMENT. THUS, THE PLEA RAISED BY TH E LEARNED DEPARTMENTAL REPRESENTATIVE ON THE BASIS OF CIRCULAR NO. 3 (SUPRA) IS NOT RELEVANT. THEREFORE, WE FIND NO FAULT WITH THE DIRECTION OF THE COMMISSIONE R OF INCOME-TAX (APPEALS) TO THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF THOSE EXPENSES, FOR WHICH CHEQUES FOR TAX DEDUCTED AT SOURCE HA S BEEN DEPOSITED BY THE ASSESSEE IN THE BANK WITHIN THE PRESCRIBED TIME LIMIT S, PROVIDED SUCH 5 CHEQUES HAVE NOT BEEN DISHONOURED. THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IS ACCORDINGLY AFFIRMED. 8. IN THE RESULT, REVENUE HAS FAIL AND THE APPEAL IS D ISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPTEMBER, 2011. SD/- SD/- (SHAILENDRAKUMAR YADAV) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 27 TH SEPTEMBER, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT(A)-III PUNE 4. THE CIT-III, PUNE 5. THE D.R, A BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE