C.R.Rajan, CHENNAI V. ITO Non Corporate Ward 6(1), CHENNAI

ITA 1456/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4094 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL B SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NOS.1456 & 1457/CHNY/2018 # $%# / ASSESSMENT YEARS : 2011-12 & 2012-13 SHRI C.R. RAJAN, NO.35/3, WILLA BALI, PORUR, A1, POTHEPAD ROAD, CHENNAI - 600 034. PAN : AEOPR 3000 F V. THE INCOME TAX OFFICER, NON CORPORATE WARD 6(1), BSNL TOWER-I, NO.16, GREAMS ROAD, CHENNAI - 600 006. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : NONE )*'( + , / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT - $ + ./ / DATE OF HEARING : 04.10.2018 01% + ./ / DATE OF PRONOUNCEMENT : 11.10.2018 / O R D E R BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) -5, CHENNAI, DATED 07.03.2018 AND PERTAIN TO ASSESSMENT YEARS 2011-12 AND 2012-13. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF INTEREST PAID TO SHRIRAM CITY UNION FINANCE LIMITED FOR NON- DEDUCTION OF TAX. 2 I.T.A. NOS.1456 & 1457/CHNY/18 3. NO ONE APPEARED FOR THE ASSESSEE EVEN THOUGH NOT ICE OF HEARING WAS SERVED ON THE ASSESSEE BY RPAD. THE REGISTRY H AS PLACED ON RECORD THE POSTAL ACKNOWLEDGEMENT AS PROOF OF SERVI CE OF NOTICE TO THE ASSESSEE. THEREFORE, I HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOSE OF THE APPEAL ON MERIT. 4. SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ASSESSEE PAID INTEREST TO SHRIRA M CITY UNION FINANCE LTD. WITHOUT DEDUCTING TAX AT SOURCE. THEREFORE, A CCORDING TO THE LD. D.R., THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT'). THE CIT(APPEALS) BY PLACING RELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN THOMAS GEORGE MUTHOOT V. CIT (2015) 63 TAXMANN.COM 99, CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD . DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RELEVANT MATERIAL AV AILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE PAID INTEREST TO SHRIRAM C ITY UNION FINANCE LTD. WITHOUT DEDUCTING TAX. THE ASSESSEE APPEARS TO HAV E CLAIMED BEFORE THE LOWER AUTHORITIES THAT THE RECIPIENT, NAMELY, SHRIR AM CITY UNION FINANCE LTD. PAID THE TAXES. IN VIEW OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, IF THE RECIPIENT PAID THE TAXES, THERE CAN NOT BE ANY DISALLOWANCE. THIS PROVISION WAS HELD TO BE PROSPECTIVE BY THE KE RALA HIGH COURT. 3 I.T.A. NOS.1456 & 1457/CHNY/18 HOWEVER, THE DELHI HIGH COURT IN CIT V. ANSAL LAND MARK TOWNSHIP PVT. LTD. (377 ITR 635) FOUND THAT IT IS RETROSPECTIVE I N OPERATION. THEREFORE, THERE ARE TWO CONFLICTING VIEWS ON THE SUBJECT, ONE BY KERALA HIGH COURT AND ANOTHER ONE BY DELHI HIGH COURT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THERE WAS CONFLICTING OPINION BET WEEN TWO DIFFERENT COURTS, IN THE ABSENCE OF JUDGMENT OF JURISDICTIONA L HIGH COURT, THE JUDGMENT WHICH FAVOURS THE ASSESSEE HAS TO BE FOLLO WED. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDG MENT OF DELHI HIGH COURT WHICH HOLDS THAT THE SECOND PROVISO TO SECTIO N 40(A)(IA) OF THE ACT IS RETROSPECTIVE IN OPERATION NEEDS TO BE FOLLOWED. 6. MOREOVER, IT NEEDS TO BE VERIFIED WHETHER THE RE CIPIENT, NAMELY, SHRIRAM CITY UNION FINANCE LTD. HAS ALREADY PAID TA XES IN RESPECT OF INTEREST PAID BY THE ASSESSEE. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE MATERIAL AVAILABLE ON RECORD AND FIND OUT WHETHER THE RECIPI ENT, NAMELY, SHRIRAM CITY UNION FINANCE LTD. HAS PAID THE TAXES IN RESPE CT OF INTEREST PAYMENT RECEIVED FROM THE ASSESSEE AND THEREAFTER DECIDE TH E ISSUE AFRESH AFTER FOLLOWING THE JUDGMENT OF DELHI HIGH COURT IN ANSAL LAND MARK TOWNSHIP PVT. LTD. (SUPRA). 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NOS.1456 & 1457/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 11 TH OCTOBER, 2018 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 3! /DATED, THE 11 TH OCTOBER, 2018 KRI. + ).45 65%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 7. () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 5$8 ). /DR 6. 9# : /GF.