M/s Abhoy Charan Bakshi, Kolkata V. ACIT, CIR-27, HALDIA, Haldia

ITA 1492/KOL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5031 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-12-2015
• Court: TRIBUNAL
• Department Lawyers: MD G HYAS UDDIN
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Application of stay
• Section: 244A; 133(6); 194C; 201(1); 131

Judgement Text

M IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI P.M.JAGTAP, AM & SRI N.V.VA SUDEVAN, JM ] S.A.NO.08/KOL/2016 (A/O ITA NO.1492/KOL/2015) ASSESSMENT YEAR : 2012-1 3 M/S. ABHOY CHARAN BAKSHI -VS.- D. C.I.T., CIRCLE-27, KOLKATA HALDIA [PAN : AAEFM9711E) (APPELLANT) (RESPONDENT) ITA NO.1492/KOL/2015 ASSESSMENT YEAR : 2012-1 3 M/S. ABHOY CHARAN BAKSHI -VS.- A. C.I.T., CIRCLE-27, KOLKATA HALDIA [PAN : AAEFM9711E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI MIRAJ D.SHAH, FCA FOR THE RESPONDENT : MD. GHYAS UDDIN, JCIT, SR.DR DATE OF HEARING : 18.03.2016. DATE OF PRONOUNCEMENT : 06.04.2016. ORDER PER N.V.VASUDEVAN, JM THE ASSESSEE HAS FILED THE ABOVE APPLICATION FOR G RANT OF STAY OF RECOVERY OF OUTSTANDING DEMAND OF A SUM OF RS.54,34,801/- FOR A Y 2012-13. WITH THE CONSENT OF THE PARTIES, THE APPEAL WAS TAKEN UP FOR HEARING. 2. THE ASSESSEE HAS FILED THE ABOVE APPEAL AGAINST THE ORDER DATED 26.11.2015 OF CIT(A)-7, KOLKATA, RELATING TO AY 2012-13. 3. T HE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN SUSTAINING ADDITION TO THE EXTENT OF RS.1,81,96,525/- MADE BY THE AO 2 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 2 INVOKING THE PROVISIONS OF SEC.40(A)(IA) OF THE INC OME TAX ACT, 1961 (ACT). THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF EXECUTING CIVIL CONTRACTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2012-23 ON 31/03/2013 DECLARING TOTAL INCOME OF RS.14,00,570. IN AN ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE ACT, DATED 29/01/2015, THE AO DETERMINED THE TOTAL INCOME OF T HE ASSESSEE AT RS.2,17,39,410. THE LD. AO MADE THE FOLLOWING ADDITIONS IN THE SAID ASS ESSMENT ORDER : ON ACCOUNT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT RS.1,99,30,315 ON ACCOUNT OF INTEREST U/S 244A OF THE ACT RS. 4,08,524 TOTAL RS.2,03,38,389 4. AS ALREADY STATED THE ASSESSEE IS IN THE BUSINES S OF EXECUTING CIVIL CONTRACTS. AS A CONTRACTOR IT DEBITED AN AMOUNT OF RS.1,99,84,060/- UNDER THE HEAD COST OF EXECUTION AND DEDUCTED THE TDS AS PER THE FOLLOWING DETAILS : - TABLE-1: DETAILS OF PAYMENT OF EXECUTION CHARGES W/ O TDS SI. NAME OF THE PAYEES AMOUNT TDS (RS) NO. PAID (RS) 1 ANANDA SANKAR SAHOO 18,80,188 18,803 2 CHITARANJAN DWIRBEDY 2,75,835 2,7 59 3 PRASANTA KUMAR SAHOO 5,73,796 5, 738 4 KANCHAN BALA BISWAL 5,57,705 5, 577 5 MAHESWAR PARIDA 31,08,762 31,088 6 MANMATH KUMAR BHUTIA 48,92,262 48,924 7 SUSHANT KUMAR BEHARA 9,11,590 9,1 16 8 BABULI BEHERA 12,13,786 12,138 9 DILIP KUMAR PATRA 56,800 5 68 10 SUPREME INDUSTRIAL 7,65,400 7, 654 11 MANORANJAN PARIDA 37,500 375 12 BIJPYA KUMAR DEHURY 10,80,881 10,809 13 MAGIC POOL 1,90,400 1,904 14 MONALISA CONSTRUCTION 9,30,056 9 ,301 15 ASHA COMMUNICATION 8,600 86 16 SIBA PRASAD SATAPATHY 17,57,486 17, 575 17 PRASANTA KUMAR PATI 16,77,468 16,7 75 18 DEBABRATA DUTTA 11,800 118 SUB-TOTAL 1,99,30,315 1,99,308 3 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 3 19 MISCELLANEOUS 53,745 - TOTAL 1,99,84,060 1,99,308 5. THE ASSESSEE FILED THE DETAILS OF THE NAME, ADD RESS, PAN AND AO OF THE PARTIES TO WHOM THE ABOVE PAYMENT WERE WHICH ARE AS FOLLOWS:- DETAILS OF PAYMENT OF EXECUTION CHARGES WITHOUT TDS SL.NO. NAME OF THE NATURE OF AMOUNT PAN OF THE AO OF THE PERSONS TO PAYMENT PAID (RS.) PAYEES PAYEES WHOM PAYMENT WAS MADE BY THE ASSESSEE 1. ANANDA SANKAR JOB CHARGES 18,80,188 BUK PS3454F WARD ANGUL SAHOO 2. CHITARANJAN JOB CHARGES 2,75,835 AGUPD4758JWARD ANGUL DWIRBEDY 3. PRASANTA KUMAR JOB CHARGES 5,73,796 DHAPS6717N WARD ANGUL SAHOO 4. KANCHAN BALA BISWAL JOB CHARGES 5,57,70 5 BANPB8695J WARD ANGUL 5. MAHESWAR PARIDA JOB CHARGES 31,08,762 APFPP1461C WARD ANGUL 6. MANMATH KUMAR JOB CHARGES 48, 92,262 AMEPB5909P WARD ANGUL BHUTIA 7. SUSHANT KUMAR JOB CHARGES 9,11,590 ARGPB3954M WARD 2(3), BEHARA BHUBANESWAR 4 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 4 8. BABULI BEHERA JOB CHARGES 1 2,13,786 ANMPB5110B WARD ANGUL 9. DILIP KUMAR PATRA JOB CHARGES 56,800 AXFPP5490F WARD ANGUL 10. SUPREME INDUSTRIAL JOB CHARGES 7,6 5,400 AAVFS5007Q WARD 27(1), HALDIA 11. MANORANJAN PARIDA JOB CHARGES 3 7,500 ASQPP7625N WARD ANGUL 12. BIJAYA KUMAR DEHURY JOB CHARGES 10,80, 881 ABSPD9982F WARD ANGUL 13. MAGIC POOL JOB CHARGES 1,90,400 AEAPG1301A WARD 30(3), KOLKATA 14. MONALISA JOB CHARGES 9,30,056 AANFM9224B CIR 4(1), CONSTRUCTION B HUBANESWAR 15. ASHA JOB CHARGES 8,600 AAWPL34 27A CIR-52(1 ), COMMUNICATION KOLKATA 16. SIBA PRASAD JOB CHARGES 17,57,486 BIRPS4210G WARD ANGUL SATAPATHY 17. PRASANTA KUMAR JOB CHARGES 6,77,468 ADQPP4563L WARD ANGUL PATI 18 DEBABRATA DUTTA JOB CHARGES 11,8 00 AHYPD5610Q WARD 27(3), HALDIA TOTAL 1,99,30,315 5 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 5 6. THE PRAYER OF THE ASSESSEE BEFORE THE AO WAS TO VERIFY IF THE PAYEES HAVE DECLARED THE RECEIPT FROM THE ASSESSEE IN THEIR RETURN OF IN COME AND IF THEY HAVE SO DECLARED THEN THE ADDITION U/S.40(A)(IA) OF THE ACT SHOULD BE DEL ETED BY THE AO. THE ABOVE SUBMISSION WAS MADE IN THE CONTEXT OF THE AMENDMENT S TO THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT BY THE FINANCE ACT, 2012 W .E.F. 1-4-2013, WHEREBY A SECOND PROVISO WAS INSERTED WHICH PROVIDED THAT IF THE PAY EES HAVE FILED THEIR RETURN OF INCOME SHOWING THE RECEIPTS FROM THE ASSESSEE IN THEIR RET URN OF INCOME THAN THE IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYE E REFERRED TO IN SEC.40(A)(IA) OF THE ACT. THE ASSESSEE ALSO MADE ATTEMPT TO COLLECT FO RM 26A FROM THESE PARTIES AND THE ASSESSEE COULD SUCCEED TO COLLECT THE SAME FROM 3 P ARTIES TO WHOM PAYMENT OF RS.17,33,790 WAS MADE AND THE SAME WAS SUBMITTED BE FORE THE LD CIT APPEALS. THE DETAILS OF THESE PARTIES ARE AS FOLLOWS: PARTIES WHO GAVE 26A FORM BEFORE CIT (A): SL.NO. PAYEE DISALLOWANCE PAYMENT TOTAL INCOME E-FILING U/S.40A(A)(IA) ACKN OWLEDGED AS PER RETURN ACKNOWLEDGEMENT BY THE PAYEE NO. 7. SUSHANTA KR 9,11,590 9,11,590 84,370 831862850081113 BEHRA 9. DILIP KUMAR 56,800 56,800 1,78,220 623930880050613 PATRA 10. SUPREME 7,65,400 7,65,400 1,15,500 50340771290912 INDUSTRIAL 17,33,790 6 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 6 7. THE LD. CIT APPEALS ACCEPTED THE CONTENTION OF T HE ASSESSEE THAT THE AMENDMENT TO 2ND PROVISO THE SECTION 40(A)(IA) OF THE IT ACT 196 1 WAS CURATIVE AND HENCE RETROSPECTIVE IN NATURE. HOWEVER THE LD CIT APPEALS HELD THAT THAT AS THE ASSESSEE HAD NOT GIVEN THE FORM 26A WITH RESPECT TO OTHER PARTIE S THE DISALLOWANCE OF RS.1,99,30,315 WAS RESTRICTED TO RS.1 ,81 ,96,525. 8. IT WAS POINTED OUT BY THE LEARNED COUNSEL FOR TH E ASSESSEE BEFORE US THAT SUBSEQUENT TO THE PASSING OF THE APPELLATE ORDER, THE ASSESSEE COLLECTED A FEW MORE FORM 26A FROM THE ABOVE PARTIES AND THE ASSESSEE COULD IN TOTAL S UCCEED TO COLLECT THE SAME FROM 6 PARTIES TO WHOM PAYMENT OF RS.1,14,92,300. THE DETA ILS OF THESE PARTIES ARE AS FOLLOWS :- PARTIES WHO GAVE 26A FORM (AVAILABLE AS ON DATE) S.NO. PAYEE DISALLOWANCE PAYMENT TO TAL E-FILING U/S 40(A)(IA) ACKNOWLEDG ED INCOME AS PER ACKNOWLEDGEMENT NO. BY T HE PAYEE RETURN 5.MAHESWAR 31,08,762 31,08,762 4,11,220 842492020301113 PARIDA 6.MANMATH 48,92,262 48,92,262 10,63,020 75453293119081 3 KR BHUTIA 7.SUSHANTA 9,11,590 9 ,11,590 84,370 831862 850081113 KR BEHRA 9.DILIP KR PATRA 56,800 56,800 1,78,220 623930880050613 10.SUPREME 7,65,400 7,65,400 1,15,500 5034077 1290912 INDUSTRIAL 16.SIBA PRASAD 17,57,486 17,57,486 4,19,610 795190401270 913 SATHPATHY 1,14,92,300 7 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 7 9. IT WAS SUBMITTED THAT OUT OF 18 PARTIES THE ASSE SSEE COLLECTED FORM 26A FROM 6 PARTIES WHERE THE PAYMENT WAS RS.1,14,92,300 AND THE BALANC E 12 PARTIES WHERE THE PAYMENT WAS RS.84,38,015 THE FORM 26A COULD NOT BE COLLECTE D. THIS IS BECAUSE THE OTHER PARTIES DID NOT COOPERATE WITH THE ASSESSEE AND HENCE THE C OPIES OF FORM 26A COULD NOT BE COLLECTED FROM THEM. IT WAS ALSO CONTENDED THAT THE ASSESSEE DID NOT HAVE POWERS TO FORCE THE OTHER PARTIES TO SUBMIT FORM 26A AND THER EFORE DUE TO LACK OF STATUTORY POWERS THE ASSESSEE COULD NOT COLLECT THE SAME. 10. IT WAS ARGUED THAT THE ASSESSING OFFICER AND FI RST APPELLATE AUTHORITIES ARE VESTED WITH STATUTORY POWERS U/S 133(6) OR 131 AND OR OTHE R PROVISIONS AND THEY COULD HAVE MADE INQUIRES WITH THE PARTIES OR THEIR RESPECTIVE ASSESSING OFFICER. IN THIS REGARD IT WAS SUBMITTED THAT ALL THE RELEVANT DETAILS OF THE PAYEES WERE FURNISHED AND ARE AVAILABLE ON RECORD WITH THEIR PAN AND AO DETAILS. 11. IT WAS POINTED OUT THAT ITAT, KOLKATA IN THE CA SE OF RAMAKRISHNA VEDANTA MATH V. INCOME-TAX OFFICER, WARD 59 (1), KOLKATA, [2012] 24 TAXMANN.COM 29 (KOL.) HAS TAKEN A VIEW THAT ONCE ASSESSEE FURNISHES LAWFULLY MAINTA INED INFORMATION ABOUT RECIPIENTS, ASSESSING OFFICER SHOULD FIRST ASCERTAIN RELATED FA CTS ABOUT PAYMENT OF TAXES DIRECTLY FROM RECIPIENTS BEFORE INVOKING SECTION 201 (1). TH E ITAT IN ITS ORDER HELD: 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE POSITION. 6. LEARNED COUNSEL'S VEHEMENT RELIANCE IS ON HON'BL E ALLAHABAD HIGH COURT'S JUDGMENT IN THE CASE OF JAGRAN PRAKASHAN LTD. V. DY .CIT (TDS) [2012] 21 TAXMANN.COM 489 WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS: ........... IT IS CLEAR THAT DEDUCTOR CANNOT BE TRE ATED AN ASSESSEE IN DEFAULT TILL IT IS FOUND THAT ASSESSEE HAS ALSO FAILED TO PAY SUCH TAX DIREC TLY. IN THE PRESENT CASE, THE INCOME TAX AUTHORITIES HAD NOT ADVERTED TO THE EXPLANATION TO SECTION 191 NOR HAD APPLIED THEIR MIND AS TO WHETHER THE ASSESSEE HAS ALSO FAIL ED TO PAY SUCH TAX DIRECTLY. THUS, TO 8 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 8 DECLARE A DEDUCTOR, WHO FAILED TO DEDUCT THE TAX AT SOURCE AS AN ASSESSEE IN DEFAULT, CONDITION PRECEDENT IS THAT ASSESSEE HAS ALSO FAILE D TO PAY TAX DIRECTLY. THE FACT THAT ASSESSEE HAS FAILED TO PAY TAX DIRECTLY IS THUS, FO UNDATIONAL AND JURISDICTIONAL FACT AND ONLY AFTER FINDING THAT ASSESSEE HAS FAILED TO PAY TAX DIRECTLY, DEDUCTOR CAN BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX ..... 7. IT IS THUS ARGUED THAT THE ONUS IS ON THE REVENU E TO DEMONSTRATE THAT THE TAXES HAVE NOT BEEN RECOVERED FROM THE PERSON WHO HAD THE PRIM ARILY LIABILITY TO PAY TAX, AND IT IS ONLY WHEN THE PRIMARY LIABILITY IS NOT DISCHARGED T HAT VICARIOUS RECOVERY LIABILITY CAN BE INVOKED. LEARNED COUNSEL CONTENDS THAT ONCE ALL THE DETAILS OF THE PERSONS TO WHOM PAYMENTS HAVE BEEN MADE, IT IS FOR THE ASSESSING OF FICER, WHO HAS ALL THE POWERS TO REQUISITION THE INFORMATION FROM SUCH PAYERS AND FR OM THE INCOME TAX AUTHORITIES, TO ASCERTAIN WHETHER OR NOT TAXES HAVE BEEN PAID BY TH E PERSONS IN RECEIPT OF THE AMOUNTS FROM WHICH TAXES HAVE NOT BEEN WITHHELD. IT IS LEAR NED COUNSEL'S SUBMISSION THAT AS A RESULT OF HON 'BLE ALLAHABAD HIGH COURT'S JUDGMENT IN THE CASE OF JAGRAN PRAKASHAN LTD'S CASE (SUPRA), THIS PARADIGM SHIFT IN THE INTE RPRETATION OF SECTION 201 (1) HAS BEEN BROUGHT ABOUT. 8. THE PLEA IS INDEED WELL TAKEN. LEARNED COUNSEL I S QUITE RIGHT IN HIS SUBMISSION THAT, AS A RESULT OF THE JUDGMENT OF HON 'BLE ALLAHABAD H IGH COURT IN JAGRAN PRAKASHAN LTD.'S CASE (SUPRA) AND IN THE ABSENCE OF ANYTHING CONTRARY THERETO FROM HON'BLE JURISDICTIONAL HIGH COURT, THERE IS A PARADIGM SHIFT IN THE MANNER IN WHICH RECOVERY PROVISIONS UNDER SECTION 201 (1) CAN BE INVOKED. AS OBSERVED B Y THEIR LORDSHIPS, THE PROVISIONS OF SECTION 201(1) CANNOT BE INVOKED AND THE 'TAX DE DUCTOR CANNOT BE TREATED AN ASSESSEE IN DEFAULT TILL IT IS FOUND THAT ASSESSEE HAS ALSO FAILED TO PAY SUCH TAX DIRECTLY'. ONCE THIS FINDING ABOUT THE NON PAYMENT OF TAXES BY THE RECIPIENT IS HELD TO A CONDITION PRECEDENT TO INVOKING SECTION 201(1), THE ONUS IS O N THE ASSESSING OFFICER TO DEMONSTRATE THAT THE CONDITION IS SATISFIED. NO DOU BT THE ASSESSEE HAS TO SUBMIT ALL SUCH INFORMATION ABOUT THE RECIPIENT AS HE IS OBLIGED TO MAINTAIN UNDER THE LAW, ONCE THIS INFORMATION IS SUBMITTED IT IS FOR THE ASSESSING OF FICER TO ASCERTAIN WHETHER OR NOT THE TAXES HAVE BEEN PAID BY THE RECIPIENT OF INCOME. TH IS APPROACH, IN OUR HUMBLE UNDERSTANDING, IS IN CONSONANCE WITH THE LAW LAID D OWN BY HON 'BLE ALLAHABAD HIGH COURT. 9. IT IS IMPORTANT TO BEAR IN MIND THAT THE LAPSE O N ACCOUNT OF NON DEDUCTION OF TAX AT SOURCE IS TO BE VISITED WITH THREE DIFFERENT CONSEQ UENCES - PENAL PROVISIONS, INTEREST PROVISIONS AND RECOVERY PROVISIONS. THE PENAL PROVI SIONS IN RESPECT OF SUCH A LAPSE ARE SET OUT IN SECTION 271 C. SO FAR AS PENAL PROVISION S ARE CONCERNED, THE PENALTY IS FOR LAPSE ON THE PART OF THE ASSESSEE AND IT HAS NOTHIN G TO DO WITH WHETHER OR NOT THE TAXES WERE ULTIMATELY RECOVERED THROUGH OTHER MEANS. THE PROVISIONS REGARDING INTEREST IN DELAY IN DEPOSITING THE TAXES ARE SET OUT IN SECTIO N 201 (1A). THESE PROVISIONS PROVIDE THAT FOR ANY DELAY IN RECOVERY OF SUCH TAXES IS TO BE COMPENSATED BY THE LEVY OF INTEREST. AS FAR AS RECOVERY PROVISIONS ARE CONCERNED, . THES E PROVISIONS ARE SET OUT IN SECTION 201 (1) WHICH SEEKS TO MAKE GOOD ANY LOSS TO REVENU E ON ACCOUNT OF LAPSE BY THE ASSESSEE TAX DEDUCTOR. HOWEVER, THE QUESTION OF MAK ING GOOD THE LOSS OF REVENUE ARISES 9 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 9 ONLY WHEN THERE IS INDEED A LOSS OF REVENUE AND THE LOSS OF REVENUE CAN BE THERE ONLY WHEN RECIPIENT OF INCOME HAS NOT PAID TAX. THEREFOR E, RECOVERY PROVISIONS UNDER SECTION 201(1) CAN BE INVOKED ONLY WHEN LOSS TO REV ENUE IS ESTABLISHED, AND THAT CAN ONLY BE ESTABLISHED WHEN IT IS DEMONSTRATED THAT TH E RECIPIENT OF INCOME HAS NOT PAID DUE TAXES THEREON. IN THE ABSENCE OF THE STATUTORY POWERS TO REQUISITION ANY INFORMATION FROM THE RECIPIENT OF INCOME, THE ASSESSEE IS INDEE D NOT ALWAYS ABLE TO OBTAIN THE SAME. THE PROVISIONS TO MAKE GOOD THE SHORTFALL IN COLLEC TION OF TAXES MAY THUS END UP BEING INVOKED EVEN WHEN THERE IS NO SHORTFALL IN FACT. ON THE OTHER HAND, ONCE ASSESSEE FURNISHES THE REQUISITE BASIC INFORMATION, THE ASSE SSING OFFICER CAN VERY WELL ASCERTAIN THE RELATED FACTS ABOUT PAYMENT OF TAXES ON INCOME OF THE RECIPIENT DIRECTLY FROM THE RECIPIENTS OF INCOME. IT IS NOT THE REVENUE'S CASE BEFORE US THAT, ON THE FACTS OF THIS CASE, SUCH AN EXERCISE BY THE ASSESSING OFFICER IS NOT PO SSIBLE. IT DOES PUT AN ADDITIONAL BURDEN ON THE ASSESSING OFFICER BEFORE HE CAN INVOK E SECTION 201(1) BUT THAT'S HOW HON 'BLE HIGH COURT HAS VISUALIZED THE SCHEME OF AC T AND THAT'S HOW, THEREFORE, IT MEETS THE END OF JUSTICE. 10. THE MATTER THUS STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FRO FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW AND IN THE LIGHT OF OUR OBSERVATIONS ABOVE. WHILE DOING SO, THE ASSESSING OFFICER WILL GIVE A D UE AND FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE AND DISPOSE OF THE MATTER BY WAY OF A SPEAKING ORDER. WE DIRECT SO. 12. IT WAS SUBMITTED THAT THE ABOVE DECISION ITAT K OLKATA IN THE ABOVE MENTIONED CASE WILL ALSO APPLY FOR THE PURPOSES OF SECTION 40(A)(I A) OF THE ACT. FURTHER RELIANCE WAS ALSO PLACED ON THE DECISION OF THE ITAT KOLKATA IN THE CASE OF VAS ELECTRONICS VS. ACIT, ITAT KOLKATA IN I.T.A NO. 662/KOL/2013 DATED 24-11-2015 WHEREIN IT WAS HELD AS FOLLOWS: 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE HAS CLAI MED LABOUR CHARGES AT RS. 55, 440/-, CARRIAGE INWARD CHARGES AMOUNTING TO RS. 62,07,498/ - AND HIRE CHARGES AMOUNTING TO RS.29, 12, 123/- IN THE P&L ACCOUNT, BUT NO TDS WAS DEDUCTED U/S. 194C OF THE ACT. LD. COUNSEL FOR THE ASSESSEE BEFORE US NOW CLEARLY ADMITTED THAT THE ASSESSEE HAS NOT DEDUCTED TDS U/S. 194C BUT HE IS OBLIGED TO DEDUCT TDS U/S. 194C OF THE ACT. THE AO APPLIED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ON THE ABOVE THREE PAYMENTS AND MADE DISALLOWANCE. AGGRIEVED, ASSESSEE PREFERRED AP PEAL BEFORE CIT(A) , WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FAIR LY CONCEDED THE GROUNDS BUT REQUESTED ONLY ON THE ISSUE OF APPLICABILITY OF SECOND PROVIS O TO SECTION 40(A)(IA) OF THE ACT, WHICH IS HELD TO BE RETROSPECTIVE BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP P. LTD. (2015) 377 ITR 635 (DEL), WHEREIN THE AO IS DIRECTED TO VERIFY WHETHER THE RECIPIENTS HAVE INCL UDED THE RECEIPTS PAID BY THE ASSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME AND ALSO PAID TAXES ON THE SAME. WHEN THIS PLEA OF 10 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 10 THE LD. COUNSEL FOR THE ASSESSEE WAS CONFRONTED TO LD. SR. OR, HE FAIRLY CONCEDED THE POSITION AND URGED THE BENCH TO SET ASIDE THE MATTE R TO THE FILE OF THE AO 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE ARE INCLINED TO SET ASIDE THE ISSUE TO THE FILE OF THE AO AND ACCORDINGLY, WE DIRECT THE AO TO VERIFY WHETHER THE RECIPIENTS HAVE INCLUDED THE INCOME IN THEIR RESPECTIVE RETURNS AND ALSO PAID TAXES ON THE SAME. THE ASSESSEE WILL PROVIDE THE DETAILS OF RECIPIENTS I.E. THEIR ASSESSMENT PARTICU LARS ETC. TO THE AO SO THAT THE AO CAN VERIFY. IN CASE THE RECIPIENT PARTIES ARE NOT COOPE RATING IN PROVIDING DETAILS, THE AO CAN CALL FOR THE INFORMATION U/S. 133(6) OF THE ACT FOR VERIFICATION OF THE SAME. ACCORDINGLY, THIS ISSUE IS REMITTED BACK TO THE FIL E OF AO TO DECIDE IN TERMS OF THE ABOVE DIRECTIONS. THIS ISSUE OF ASSESSEE'S APPEAL IS ALLO WED FOR STATISTICAL PURPOSES. 13. IT WAS THEREFORE SUBMITTED THAT THE DISALLOWAN CE U/S.40(A)(IA) OF THE ACT TO THE EXTENT SUSTAINED BY THE CIT(A) SHOULD BE SET ASIDE AND REMANDED TO THE AO TO VERIFY WHETHER THE RECIPIENTS HAVE INCLUDED THE RECEIPTS P AID BY THE ASSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME AND ALSO PAID TAXES ON THE SAME. TO THE EXTENT THE RECIPIENTS FROM THE ASSESSEE HAVE SO INCLUDED THE S UM IN THEIR RETURNS OF INCOME AND FILED THE SAME, NO DISALLOWANCE U/S.40(A)(IA) OF TH E ACT SHOULD BE MADE BY THE AO. IN CASE THE RECIPIENT PARTIES ARE NOT COOPERATING IN P ROVIDING DETAILS, THE AO SHOULD BE DIRECTED TO CALL FOR THE INFORMATION U/S. 133(6) OR 131 OF THE ACT, FOR VERIFICATION OF THE SAME. 14. THE LEARNED DR RELIED ON THE ORDER OF THE CIT( A) AND SUBMITTED THAT THE BENEFIT OF THE SECOND PROVISO SHOULD NOT BE ALLOWED TO THE ASS ESSEE AS THE TAX DEDUCTED AT SOURCE HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE FOR FIL ING THE RETURN OF INCOME U/S.139(1) OF THE ACT. 15. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. THE CIT(A) HAS HELD THAT THE SECOND PROVISO TO SEC.40(A)(IA) O F THE ACT WILL APPLY IN THE PRESENT CASE AND THAT APPLICABILITY OF THE SECOND PROVISO T O SEC.40(A)(IA) OF THE ACT WHICH WAS INTRODUCED BY THE FINANCE ACT, 2012 W.E.F. 1.4.2013 WAS RETROSPECTIVE IN OPERATION AND WAS TO APPLY W.E.F. 1-4-2005, BEING THE DATE FROM W HICH SUB-CLAUSE (IA) OF SECTION 40(A) 11 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 11 WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. T HE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (I) PVT.LT D., IN ITA NO.160/2015 JUDGMENT DATED 26.8.2015 HAS TAKEN THE VIEW THAT TH E INSERTION OF THE SECOND PROVISO TO SEC.40(A)(IA) OF THE ACT IS RETROSPECTIVE AND WILL APPLY FROM 1.4.2005. ONCE IT IS HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF 2 ND PROVISO TO SEC.40(A)(IA) OF THE ACT, THE CIT(A) OUGHT TO HAVE DIRECTED THE AO TO VERIFY WHET HER THE RECIPIENTS HAVE INCLUDED THE RECEIPTS PAID BY THE ASSESSEE IN THEIR RESPECTI VE RETURNS OF INCOME AND ALSO PAID TAXES ON THE SAME. TO THE EXTENT THE RECIPIENTS FR OM THE ASSESSEE HAVE SO INCLUDED THE SUM IN THEIR RETURNS OF INCOME AND FILED THE SAME, NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT OUGHT TO HAVE BEEN SUSTAINED BY THE CIT(A). T HE CIT(A) OUGHT TO HAVE ALSO DIRECTED THE AO THAT IN CASE THE RECIPIENT PARTIES ARE NOT COOPERATING IN PROVIDING DETAILS, THE AO SHOULD CALL FOR THE INFORMATION U/S . 133(6) OR 131 OF THE ACT, FOR VERIFICATION OF THE SAME. IN THIS REGARD WE ALSO F IND THAT THE ASSESSEE HAS FURNISHED ALL THE DETAILS OF ASSESSMENT PARTICULARS OF THE RECIPI ENTS OF PAYMENT FROM THE ASSESSEE. THE AO THEREFORE SHOULD NOT HAVE ANY DIFFICULTY IN MAKING THE REQUIRED VERIFICATION. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) TO T HE EXTENT TO WHICH HE HAD SUSTAINED THE ORDER OF THE AO ON THE DISALLOWANCE U/S.40(A)(I A) OF THE ACT AND REMAND THE ISSUE TO THE AO TO VERIFY WHETHER THE RECIPIENTS HAVE INCLUD ED THE RECEIPTS PAID BY THE ASSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME AND ALSO PAID TAXES ON THE SAME. TO THE EXTENT THE RECIPIENTS FROM THE ASSESSEE HAVE SO INCLUDED THE S UM IN THEIR RETURNS OF INCOME AND FILED THE SAME, NO DISALLOWANCE U/S.40(A)(IA) OF TH E ACT SHOULD BE MADE BY THE AO. IN CASE THE RECIPIENT PARTIES ARE NOT COOPERATING IN P ROVIDING DETAILS, THE AO SHOULD BE DIRECTED TO CALL FOR THE INFORMATION U/S. 133(6) OR 131 OF THE ACT, FOR VERIFICATION OF THE SAME. 16. IN THE RESULT, APPEAL BY THE ASSESSEE IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSE. IN VIEW OF THE FACT THAT THE APPEAL HAS BEEN DECIDED A ND THE IMPUGNED ORDER OF THE CIT(A) 12 SA.NO.8/KOL/2016&ITA NO.1492/KOL/2015 M/S. ABHOY CHARAN BAKSHI. A.YR.2012-13 12 SET ASIDE, THE STAY APPLICATION HAS BECOME INFRUCTU OUS AND IS THEREFORE DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE COURT ON 06.04.2016. SD/- SD/- [P.M.JAGTAP] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06.04.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. ABHOY CHARAN BAKSHI, C/O D.J.SHAH & CO., KAL YAN BHAWAN, 2, ELGIN ROAD, KOLKATA-700020. 2. A.C.I.T., CIRCLE-27, HALDIA.. 3. CIT(A)-7, KOLKATA 4. CIT-9, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES