M/s. Premier Refractories of India Pvt. Ltd., Madhya Pradesh V. ACIT, New Delhi

ITA 1455/DEL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5875 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 09-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHI
• Keywords: Retrospective amendment; Reasonable cause
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO.1455/DEL/2017 ASSESSMENT YEAR: 2012-13 PREMIER REFRACTORIES OF INDIA PVT. LTD., NKJ KATNI, MADHYA PRADESH. V. ACIT, CIRCLE-20(1), NEW DELHI. TAN/PAN: AAACP6208J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI A.K. TRIPATHI, (EMPLOYEE IN COMPANY) RESPONDENT BY: MS. PARAMITA TRIPATHI, CIT-DR DATE OF HEARING: 22 05 2018 DATE OF PRONOUNCEMENT: 30 05 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 20.01.2016 PASSED BY CIT(A)-VII, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET, THE APPEAL OF THE ASSESSEE IS BA RRED BY LIMITATION BY 237 DAYS. IN THE PETITION FOR CONDONA TION OF DELAY, THE ASSESSEE SUBMITTED THAT THE APPELLATE OR DER WAS RECEIVED BY MR. PRADEEP KUMAR JHA, A STAFF OF THE A SSESSEE- COMPANY, WHO HAS LEFT THE JOB OF THE ASSESSEE-COMPAN Y AND I.T.A. NO.1455/DEL/2017 2 FAILED TO INFORM THE RECEIVING OF THE APPELLATE ORD ER TO THE DIRECTOR OF THE COMPANY. IT WAS ONLY WHEN THE ASSES SEE- COMPANY RECEIVED PENALTY NOTICE ON 22.02.2017 AND THEREAFTER INQUIRY IN THE OFFICE WAS CARRIED OUT, I T WAS GATHERED THAT THE APPELLATE ORDER WAS RECEIVED BY T HE SAID EMPLOYEE ON 16.05.2016 AND IT WAS NOT INTIMATED. IN SUPPORT, SWORN AFFIDAVIT OF SHRI DEEPAK KUMAR GUPTA, DIRECTO R OF THE ASSESSEE-COMPANY, HAS ALSO BEEN FILED. ACCORDINGLY, IT WAS PRAYED THAT THE DELAY IN FILING OF APPEAL WAS BEYON D THE CONTROL OF THE ASSESSEE AND THERE WAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. ON THE OTHER HAND, L EARNED DR HAS OBJECTED FOR CONDONATION OF DELAY. 3. AFTER CONSIDERING THE AFORESAID CIRCUMSTANCES, W E FIND THAT THERE ARE NO LATCHES ON THE PART OF THE ASSESS EE IN FILING THE APPEAL IN TIME AND THERE WAS A REASONABLE CAUSE AS STATED ABOVE. IN VIEW OF THE AFORESAID CIRCUMSTANCES, WE A RE CONDONING THE DELAY OF 237 DAYS. 4. IN THE GROUNDS OF APPEAL, THE ASSESSEE IS AGGRIE VED BY DISALLOWANCE MADE U/S. 40(A)(IA) OF RS.12,92,762/- ON THE PAYMENT MADE TO THE VARIOUS CONTRACTORS AGGREGATING TO RS.12,92,762/- ON THE GROUND THAT NO TDS WAS DEDUCT ED BY THE ASSESSEE. THE ASSESSEE-COMPANY IS ENGAGED IN TH E BUSINESS OF MANUFACTURING OF REFRACTORYS ITEM. ON THE PERUSAL OF THE P&L ACCOUNT, ASSESSING OFFICER NOTED THAT ASSESSEE HAS PAID PALLIATING CHARGES, BUSINESS PROM OTION, COMPUTER MAINTENANCE, GRINDING CHARGES, PRINTING CH ARGES TO I.T.A. NO.1455/DEL/2017 3 THE FOLLOWING CONTRACTORS:- PARTY NAME AMOUNT RAJI PRAKASH ASSOCIATES RS.2,61,916/- PRADEEP KUMAR RS.3,05,968/- MICRO COMPUTER SERVICES RS.61,053/- VINAYAK TRADERS RS.5,18,719/- INDU PACKAGING RS.1,45,106/- 4.1 ON SUCH PAYMENT, THE ASSESSEE HAS NOT DEDUCTED TDS AND ACCORDINGLY ASSESSING OFFICER PROCEEDED TO MAKE THE DISALLOWANCE U/S.40 (A) (IA) FOR SUM AMOUNTING TO RS.12,92,762/-. 5. BEFORE THE LD. CIT (A), ASSESSEE SUBMITTED THAT ALL THESE CONTRACTORS HAVE OFFERED HIS INCOME IN THE RETURN O F INCOME AND HAD PAID DUE TAXES ON IT AND DOCUMENTARY EVIDEN CES TO THIS EFFECT WERE ALSO FURNISHED. RELIANCE WAS PLACE D ON 1 ST PROVISO TO SECTION 201(1) AND 2 ND PROVISO TO SECTION 40(A)(IA) WHICH THOUGH HAS BEEN BROUGHT IN THE STATUTE BY THE FINANCE ACT, 2012 W.E.F. 1 ST APRIL, 2013. IT WAS PLEADED THAT SUCH PROVISO WAS BENEFICIAL AND IS APPLIED RETROSPECTIVELY. HOW EVER, THE LD. CIT (A) HELD THAT CERTIFICATE IN FORM NO.26 A HAS NOT BEEN FURNISHED AND ACCORDINGLY, HE CONFIRMED THE SA ID DISALLOWANCE. 6. BEFORE US THE AUTHORIZED REPRESENTATIVE OF THE A SSESSEE SUBMITTED THAT ALL THE RELEVANT CERTIFICATES ARE NO W AVAILABLE WITH THE ASSESSEE AND ALSO ASSESSEE HAS ALREADY FUR NISHED THE EVIDENCE THAT THESE PERSONS HAVE ALREADY DISCLOSED THE I.T.A. NO.1455/DEL/2017 4 PAYMENT IN THEIR RETURN OF INCOME AND HENCE IN VIEW OF THE RELEVANT PROVISOS INSERTED IN SECTIONS 201(1) AND 40(A)(IA), NO DISALLOWANCE SHOULD BE MADE. 7. ON THE OTHER HAND, LEARNED DR SUBMITTED THAT FOR CLAIMING SUCH BENEFIT, THE ONUS IS ON THE ASSESSEE TO PROVE THAT THESE PERSONS HAVE PAID THE TAXES ON SUCH PAYM ENT AFTER DISCLOSING THE SAME IN THEIR RETURN OF INCOME FOR W HICH CERTIFICATE IN FORM 26A IS REQUIRED WHICH HAS NOT B EEN DONE AS OBSERVED BY THE LD. CIT (A). IN CASE, THE ASSESSEE IS HAVING SUCH CERTIFICATE THEN ASSESSING OFFICER SHOULD BE D IRECTED TO VERIFY AND MATTER SHOULD BE REMANDED BACK TO THE AS SESSING OFFICER. 8. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE P ARTIES AND ON PERUSAL OF THE RELEVANT FINDINGS GIVEN IN TH E IMPUGNED ORDER, WE FIND THAT ASSESSEE HAS NOT DEDUCTED ANY T DS FOR MAKING THE PAYMENT TO THE ABOVE NAMED CONTRACTORS F OR SUMS AGGREGATING TO RS.12,92,762/-. THE ONLY PLEA WHICH HAS BEEN TAKEN IS THAT, THESE PERSONS HAVE SHOWN THEIR PAYME NT AS INCOME IN THEIR INCOME TAX RETURN AND ALSO PAID DUE TAXES ON IT. IN SUPPORT, RELIANCE HAS BEEN PLACED TO DULY INSERTED PROVISO BY THE FINANCE ACT, 2012 IN SECTIONS 201(1) AND 40 (A) (IA). NOW, IT HAS BEEN SETTLED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V/S. ANSAL LAND MARK TOWNSHIP (P) LTD. , REPORTED IN (2015) 377 ITR 635 (DEL) THAT THESE PROVISOS ARE DECLARATORY AND CURATIVE IN NATURE AND SHOULD BE GI VEN RETROSPECTIVE EFFECT. THUS, WE HOLD THAT BENEFIT OF THE SAID I.T.A. NO.1455/DEL/2017 5 PROVISO SHOULD BE GIVEN TO THE ASSESSEE WHICH PROVIDES THA T A PERSON SHALL NOT BE DEEMED TO BE IN DEFAULT FOR NOT DEDUCTING THE TDS IF SUCH PERSON TO WHOM PAYMENT IS TO BE MAD E HAS TAKEN INTO ACCOUNT FOR SUCH SUM FOR COMPUTING INCOM E IN SUCH RETURN OF INCOME AND HAS FURNISHED HIS RETURN OF INCOME U/S.139 AND HAS PAID THAT DUE TAXES AND FURNISHED T HE CERTIFICATE TO THIS EFFECT FROM THE ACCOUNTANT THEN IN TERMS OF 2 ND PROVISO 40(A)(IA), NO DISALLOWANCE CAN BE MADE. ACCORDINGLY, WE REMAND THE MATTER TO THE FILE OF TH E ASSESSING OFFICER TO EXAMINE WHETHER THESE PERSONS HAVE DECLA RED THE PAYMENTS MADE BY THE ASSESSEE AS THEIR INCOME IN TH EIR INCOME TAX RETURN AND ASSESSEE SHALL PROVIDE THE CE RTIFICATE FROM THE ACCOUNTANT AND/ OR INCOME TAX AND COMPUTAT ION WHEREIN SUCH INCOME HAS BEEN SHOWN BY THESE PARTIES IN THEIR INCOME TAX RETURN. WITH THIS DIRECTION, THE G ROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2018. SD/- SD/- [O.P. KANT] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH MAY, 2018