The Dy.CIT, Circle 3(1), Hyderabad V. M/s Shodhana Laboratories Ltd, Hyderabad

ITA 1583/HYD/2013

• Counselvise Citation: 158322514 RSA 2013
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: P VINOD
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1583/HYD/2013 ASSESSMENT YEAR 2009-2010 DCIT, CIRCLE 3(1) HYDERABAD VS. M/S. SHODHANA LABORATORIES LTD. HYDERABAD 500082 PAN AAFCS1075D (APPELLANT (RESPONDENT) FOR REVENUE : MR. B. YADAGIRI FOR ASSESSEE : MR. P. VINOD DATE OF HEARING : 24.03.2014 DATE OF PRONOUNCEMENT : 26.03.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS A REVENUE APPEAL AGAINST THE ORDER OF THE CIT(A)-IV, HYDERABAD DATED 20.09.2013 FOR THE ASSESSMENT YEAR 2009-2010. 2. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO T HE DISALLOWANCE UNDER SECTION 40(A)(IA) ON THE REASON THAT TDS REMITTANCE MADE BEFORE THE DUE DATE OF FILING THE R ETURN OF INCOME WAS NOT IN CONFORMITY WITH THE PROVISIONS OF SECTION 40(A)(IA). REVENUE HAS RAISED TWO GROUNDS ON THE AB OVE ISSUE AND ALSO CONTENDING THAT THE AMENDMENT TO SEC TION 40(A)(IA) IS W.E.F. 01.04.2010 DOES NOT APPLY TO AS SESSMENT YEAR 2008-2009. 3. ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF DRUGS AND BULK INTERMEDIARIES. IN THE PROCESS OF SC RUTINY OF THE RETURN, ASSESSING OFFICER NOTICED THAT ASSESSEE REMITTED 2 ITA.NO.1583/HYD/2013 M/S. SHODHANA LABORATORIES LTD. HYDERABAD TDS OF RS.1,78,06,461/- UNDER SECTION 194C AND RS.2,97,973/- UNDER SECTION 194H TO GOVERNMENT ACCO UNT ON 21.05.2009 AND 26.05.2009 RESPECTIVELY. ASSESSIN G OFFICER HELD THAT SINCE THE ASSESSEE REMITTED THE T DS BELATEDLY, IT HAD VIOLATED THE PROVISIONS OF SECTIO N 40(A)(IA) AND DISALLOWED THE ENTIRE SUM OF RS.1,81,04,434/- U NDER SECTION 40(A)(IA). 4. LEARNED CIT(A) FOLLOWING THE JUDGMENT OF THE CALCUTTA HIGH COURT IN THE CASE OF CIT V/S. VIRGIN CREATION S (GA.NO. 3200 OF 2011 DATED 23.11.2011), ALLOWED THE ASSESSE ES APPEAL BY HOLDING AS UNDER : 5.3. THE APPELLANT HAS ADMITTEDLY PAID THE TDS BEF ORE THE DUE DATE FOR FILING OF RETURN OF INCOME U/S. 13 9(1). THIS ISSUE HAS BEEN EXAMINED BY THE CALCUTTA HIGH COURT IN CIT V/S. VIRGIN CREATIONS (GA NO.3200/201 1, DATED 23.11.2011) WHERE IT WAS HELD THAT THE AMENDMENT TO THE SECTION 40(A)(IA) WAS RETROSPECTIV E IN NATURE. THIS DECISION WAS ALSO FOLLOWED BY THE ITAT , AHMEDABAD BENCH IN THE CASE OF M/S. ALPHA PROJECTS SOCIETY P. LTD. V/S. DCIT (ITA.NO.2869/AHD/2011, DATED 23.03.2012). RESPECTFULLY FOLLOWING THESE DECISIONS, IT IS HELD THAT THE AMENDMENT TO SECTION 40(A0(IA) PERMITTING THE DEDUCTOR TO REMIT THE TDS TO GOVERNMENT ACCOUNT ON OR BEFORE THE DUE DATE UNDER SEC. 139(1) IS RETROSPECTIVE, AND THEREFORE, APPLIC ABLE TO THE APPELLANT FOR THE ASSESSMENT YEAR 2009-10. CONSEQUENTLY, THE DISALLOWANCE UNDER SECTION 40(A)( IA) IS SET ASIDE AND THE ADDITIONAL GROUNDS OF APPEAL A RE ALLOWED. 5. SINCE THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT(A)-IV, HYDERABAD V/S. PEC ELECTRONICS PVT. LTD . SECUNDERABAD IN ITA.NO.263 OF 2013 DATED 12.07.2013 UPHELD RETROSPECTIVE APPLICATION OF AMENDMENT TO PR OVISIONS OF SECTION 40(A)(IA), WE HAVE TO CONFIRM THE ORDER OF THE CIT(A), WHICH IS IN CONFORMITY WITH THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT. THE RELEVANT DECISION OF THE JURISDICTIONAL HIGH COURT IS AS UNDER : 3 ITA.NO.1583/HYD/2013 M/S. SHODHANA LABORATORIES LTD. HYDERABAD WITH REGARD TO THE NEXT QUESTION, THE TRIBUNAL BY FOLLOWING THE DECISION OF THE KOLKATA HIGH COURT IN CIT V/S. VIRGIN CREATIONS (GA.NO.3200/2011), WHEREIN IT HAS BEEN HELD THAT THE AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(IA) IS RETROSPECTIVE IN OPERATION AND CONSEQUENTLY IN RESPECT OF ANY PAYMENT TO TDS MADE BEFORE THE DUE DATE FOR THE FILING OF THE RETU RN OF INCOME, THE PROVISIONS OF SECTION 40(A)(IA) CANN OT BE INVOKED. THEREFORE, WE DO NOT FIND ANY REASON TO SEE THAT ANY FURTHER DECISION ON THIS POINT IS REQUIRED BY THIS COURT. 6. THE DECISION OF CIT(A) IS UPHELD AS HE HAS ALLOWED THE CLAIM AS ASSESSEE PAID/ REMITTED TAXES BEFORE FILING O RETURN O INCOME. REVENUE GROUNDS A RE ACCORDINGLY DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.03.2014. SD/- SD/- ( ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH MARCH, 2014 VBP/- COPY TO 1. THE DCIT, CIRCLE 3(1), HYDERABAD 2. M/S. SHODHANA LABORATORIES LTD. F.NO.705, ADITYA TRADE CENTRE, AMEERPET, HYDERABAD 500 082. 3. CIT(A)-IV, HYDERABAD 4. CIT-III, HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.