M.V.Rathinam, Salem V. DCIT, Salem

ITA 1472/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9617 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 10-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-06-2015
• Court: TRIBUNAL
• Department Lawyers: N MADHAVANJCIT
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Principle of natural justice
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! . ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1472 /MDS./2015 ( / ASSESSMENT YEAR :2010-11) SHRI M.V.RATHINAM , 55-A,KONDIKARAN KADU, AVARANGAPALAYAM,MAVELIPALAYAM POST, SANKARI,SALEM 637 301. VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCEL-II,SALEM. PAN AJRPR 3726 L ( %& / APPELLANT ) ( '(%& / RESPONDENT ) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE,ERODE / RESPONDENT BY : MR.N.MADHAVAN,JCIT, D.R / DATE OF HEARING : 10.03.2016 !' /DATE OF PRONOUNCEMENT : 06.04.2016 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A), SALEM DATED 27.03.2015 PERTAINING TO THE ASSESSMENT YEAR 2010- 11. ITA NO.1472/MDS/2015 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL:- 1) THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2) THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE GROUNDS OF APPEAL IN PROPER PERSPECTIVE. 3) THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE SETTLED PRINCIPLE THAT THE POWERS OF THE CIT(A) ARE CO-TERMINUS WITH THAT OF THE ASSESSING OFFICER. 4) THE LEARNED CIT (A) SIMPLY ENDORSED THE DISALLOW ANCE MADE BY THE ASSESSING OFFICER. 5) THE LEARNED CIT (A) ERRED IN NOT FINDING OUT WHE THER PAYMENTS BY THE APPELLANT WERE IN RESPECT OF ONE BILL OR MORE THAN ONE BILL, SO AS TO WARRANT DISALLOWANCE U/S.40A(3) [RELYING ON RAJA & CO V. DCIT (2013) 37 TAXMANN.COM 268(COCHIN-TRIB). 3. THERE WAS A DELAY OF TWO DELAYS FOR FILING THE APPEAL. LD.A.R SUBMITTED THAT THE ASSESSEE HAS NOT SENT THE APPEAL PAPER THROUGH SPEED POST ON 12.06.2015 AND IT WAS REACHED THE TRI BUNAL ON 16.06.2015. ON THE DATE OF DISPATCH THROUGH THE SP EED POST BY THE ASSESSEE, THERE WAS TIME AVAILABLE TO FILE THE APPE AL BEFORE THE DUE DATE OF FILING THE APPEAL AND IT IS IN TRANSIT. TH EREFORE,, THERE CANNOT ITA NO.1472/MDS/2015 3 BE ANY DELAY ON THE PART OF THE ASSESSEE. WE SATIS FIED ABOUT THE REASONS ADVANCED BY THE LD.A.R, AND THAT IT IS ALRE ADY OUT OF HAND DURING THE PERIOD AVAILABLE TO THE ASSESSEE TO FILE THE APPEAL, HENCE, IT CANNOT BE CONSIDERED AS DELAY AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE MADE PAYMENT OF ` 5,44,89,606/- DURING THE YEAR TO SUB-CONTRACTORS ON HIRING THE TRUCKS. OUT OF THIS, ` 20,05,084/- WAS BY CASH. ON THIS PAYMENT OF ` 20,05,084/-, THE AO INVOKED THE PROVISIONS OF THE S ECTION 40A(3) OF THE ACT AS THIS PAYMENT WAS MADE OTHERWISE BY CROSS ED DD OR CHEQUE. AGAINST THIS, THE ASSESSEE WAS IN APPEAL BE FORE THE LD.CIT(A). ON APPEAL BEFORE THE LD.CIT(A), THE ASSE SSEE PLEADED THAT DUE TO COMMERCIAL EXIGENCIES , ASSESSEE MADE T HESE PAYMENTS TO THE DRIVERS OF THE VEHICLE, OTHERWISE IT IS NOT POSSIBLE TO DELIVER THE GOODS IN TIME. THE LD.CIT(A) OBSERVED THAT ASSESSE E HAS NOT EXPLAINED THE NATURE OF EMERGENCY AND ACCORDING TO HIM, THE PROVISIONS OF THE SECTION 40A(3) IS APPLICABLE TO T HESE PAYMENTS OF ITA NO.1472/MDS/2015 4 ` 20,05,084/- AND HE HAS CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE PRIMARY OBJECTION OF THE LD.A.R IS THAT EAC H PAYMENT IS LESS THAN ` 20,000/-. IN VIEW OF THE ORDER OF THE COCHIN BENCH IN THE CASE OF RAJA & CO VS. DCIT REPORTED IN [2013] 37 TAXMANN .COM 268(COCHIN-TRIB), THIS PAYMENT CANNOT BE CONSIDERED FOR DISALLOWANCE. FURTHER, HE SUBMITTED THAT AS PER PR OVISO 2 TO SECTION 40A(3), DISALLOWANCE CANNOT BE MADE HAVING REGARD T O THE NATURE AND EXTENT OF BANKING FACILITIES AVAILABLE AT THAT TIME OF THE PAYMENT AND ALSO CONSIDERATION OF BUSINESS EXPEDIENCY. 6. THE LD.D.R SUBMITTED THAT THE ARGUMENT OF THE A SSESSEES COUNSEL THAT EACH PAYMENT IS LESS THAN OF ` 20,000/- IS NOT AT ALL TAKEN BEFORE THE LOWER AUTHORITIES AND IT CANNOT BE ENTER TAINED AT THIS STAGE. FOR THIS PURPOSE HE RELIED ON THE JUDGEMENT OF CO-O RDINATE BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., V. DCI T REPORTED IN [2012] 21 TAXMANN.COM 429(MUM.)(SB) WHEREIN HELD THAT QUES TION, WHICH HAS NOT BEEN RAISED BEFORE ANY OF THE LOWER AUTHORI TIES AND OBVIOUSLY ITA NO.1472/MDS/2015 5 NOT DECIDED BY ANY ONE OF THEM, CANNOT LEAD TO GRIE VANCE IN RESPECT OF WHICH A GROUND CAN BE VALIDLY TAKEN IN MEMORANDU M OF APPEAL. FURTHER, HE SUBMITTED THAT THE ASSESSEE HAS NOT EXP LAINED THE BUSINESS EXPEDIENCY BEFORE THE LOWER AUTHORITIES. H ENCE, THE DISALLOWANCE WAS MADE AND IT WAS SUSTAINED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE PAYMENT HAS BEEN MADE TO DRIVERS AT THE TIME OF UNLOADING THE G OODS AND IT IS NOT POSSIBLE TO MAKE CHEQUE PAYMENTS OR BY DD AT THE TI ME OF DELIVERY OF GOODS, AS THEY REFUSED TO ACCEPT CHEQUE OR DD AND I NSISTED FOR CASH PAYMENT. FURTHER, IT WAS STATED THAT THE PAYMENT W AS MADE LESS THAN ` 20,000/-. IN OUR OPINION, THIS ARGUMENT IS TO BE E XAMINED BY THE AO AND EVIDENCE PRODUCED BEFORE US IS NOT SUFFICIENT T O APPRECIATE THESE FACTS. HENCE, IN THE INTEREST OF JUSTICE, WE REMIT THE ENTIRE ISSUE TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATI ON. REGARDING THE ARGUMENT OF THE LD.A.R THAT ADDITIONAL GROUND RAISE D BY THE ASSESSEE TO BE ADJUDICATED, IN OUR OPINION, WHEN THE ASSESS EE PRODUCED ALL THE BOOKS OF ACCOUNTS BEFORE THE AO, THE LD. ASSESS ING OFFICER IS ITA NO.1472/MDS/2015 6 LIABLE TO LOOK INTO WHETHER EACH PAYMENT IS LESS TH AN ` 20,000/- OR NOT AND HE HAS TO GIVE FINDINGS ON IT. SINCE THERE IS A FAILURE ON THE PART OF REVENUE AUTHORITIES ALSO, WE ARE NOT IN A POSITI ON TO APPRECIATE THE ARGUMENT OF LD.D.R. ACCORDINGLY, THE ISSUE IN DISP UTE IS REMITTED BACK TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONS IDERATION AND THEREAFTER, OTHER ISSUE RELATING TO BUSINESS EXIGEN CY TO BE DECIDED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL,2016 AT CHENNAI SD/- SD/- ( . ) (G.PAVAN KUMAR) ( ( #$ % ) ) & CHANDRA POOJARI '( JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 6 TH APRIL,2016. K S SUNDARAM. )*((+,(-, /COPY TO: ( 1. /APPELLANT 2. /RESPONDENT 3. ( .(&' /CIT(A) 4. ( . /CIT 5. ,/0 (1 /DR 6. 02(3 /GF