ITO, Ward - 2(3), Asansol, Asansol V. M/s. Reliable Transport Agency, Asansol

ITA 1592/KOL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5080 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 03-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2011
• Court: TRIBUNAL
• Department Lawyers: NONGOTHUNG JUNGIO
• Assessee Lawyers: N O N E
• Keywords: Retrospective amendment
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO. 1592/KOL/2011 ASSESSMENT YEAR: 2008-09 INCOME-TAX OFFICER, WD-2(3), ASANSOL. VS. M/S. RE LIABLE TRANSPORT AGENCY (PAN: AADFR2643B) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.02.2016 DATE OF PRONOUNCEMENT: 19.02.2016 FOR THE APPELLANT: SHRI NONGOTHUNG JUNGIO, JCIT FOR THE RESPONDENT: N O N E ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A), ASANSOL IN APPEAL NO. 310/CIT(A)/ASL/CIR-2/ASL/10-11 DATED 28.09.2011. A SSESSMENT WAS FRAMED BY DCIT, CIRCLE-2, ASANSOL U/S. 143(3) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2008-09 VIDE ITS ORDER DATED 30.11.201 0. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE MADE BY AO ON ACCOUNT OF TRUCK HIR E CHARGES PAID BY ASSESSEE WITHOUT DEDUCTION OF TDS U/S. 194C OF THE ACT THEREBY INVOK ING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 3. AT THE OUTSET, IT IS SEEN FROM THE ORDER SHEET E NTRIES FIXING THE APPEAL FROM 13.03.2012 AT LEAST 14 TIMES. NONE IS APPEARING ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. HENCE, QUA THE ASSESSEE, WE ARE DECIDIN G THIS APPEAL EX PARTE. 4. WE HAVE HEARD LD. SR. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS IN TH E BUSINESS OF TRANSPORTER AND FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. THE AO FROM THE D ETAILS OF EXPENDITURE UNDER THE HEAD TRUCK HIRE CHARGES AMOUNTING TO RS.1,54,19,182 /- NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS IN EXCESS OF RS.50,000/- TO EACH OF T HE TRUCK WITHOUT DEDUCTION OF TDS IN VIOLATION OF THE PROVISIONS OF SECTION 194C OF T HE ACT. THE AO HAS BROUGHT OUT ALL THE DETAILS OF PAYMENT, THE COPY OF WHICH WAS SUPPLIED TO THE ASSESSEE ON 18.11.2010, AND RECORDED ON PAGES 3 TO 19 OF THE ASSESSMENT ORDER, WHICH CLEARLY STATES THAT THE ASSESSEE HAS NOT DEDUCTED TDS U/S. 194C OF THE ACT AND ACCOR DINGLY, THE AO MADE DISALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AMOUNTING TO RS.1,19,22,929/-, 2 ITA NO. 1592/KOL/2011 RELIABLE TRANSPORT AGENCY, AY 2008-09 IN REGARD TO PAYMENTS WHICH COMES WITHIN THE AMBIT OF THE PROVISIONS OF SECTION 194C OF THE ACT. WE FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAS TAKEN THE PLEA THAT THERE IS NO CONTRACT EXISTS BETWEEN THE PARTIES BUT THE AO HAS NOT ACCEPTED THE PLEA OF THE ASSESSEE AND EVEN THE PAYMENTS ARE ABOVE RS. 50,000 /- PER ANNUM PER TRUCK. DESPITE OPPORTUNITY GIVEN TO ASSESSEE BY AO, HE COULD NOT P ROVE THE OWNERSHIP DETAILS OF THE TRUCK. AGGRIEVED AGAINST THE DISALLOWANCE, ASSESSE E PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE DISALLOWANCE BY A VERY CRYPTIC ORDE R STATING THE REASON THAT THE CIT(A) HAS WRONGLY PRESUMED THAT THERE EXISTS A CONTRACT B ETWEEN THE ASSESSEE AND THE TRUCK OWNER. THE RELEVANT FINDING OF THE CIT(A) IS THAT HOWEVER, HE IS NOT SEEN TO DENY THE APPELLANTS ASSERTION THAT THERE WAS NO CONTRACT BE TWEEN THE APPELLANT AND THE TRUCK OWNERS. THE AO IS SEEN TO IMPLY THAT CONTRACTS EXI STED BETWEEN THE APPELLANT AND THE CONTRACTORS. BUT IN VIEW OF THE ABOVE FACTS WHEN THE ASSESSEE HA S HIRED A TRUCK AND MADE PAYMENT DEFINITELY THERE EXISTS A CONTRACT, IT CAN BE VERBAL OR ORAL. OUR VIEW IS SUPPORTED BY THE ORDER OF THIS COORDINATE BENCH IN THE CASE OF DCIT VS. KAMAL MUKHERJEE & CO. (SHIPPING) (P) LTD. ITA NO. 199/KOL /2010, WHEREIN IT IS HELD AS UNDER : ( FROM HEAD NOTES) . UNDOUBTEDLY, THESE DECISIONS DO INDICATE THAT THERE IS A WORKMAN EMPLOYER RELATIONSHIP BETWEEN THE DOCK WORKERS AND THE STEVEDORES LIKE ASSESSEE WHEN THEY EMPLOY THOSE WORKERS, BUT BE THA T AS IT MAY, THE FACT REMAINS THAT THE ASSESSEE HAS MADE PAYMENTS TO THE CDLB FOR SUPPLY OF LABOUR, EVEN WHEN THIS LABOUR MAY BE TREATED AS EMP LOYED BY THE ASSESSEE FOR ALL PRACTICAL PURPOSES, THE PROVISIONS OF SECTI ON 194C ARE CLEARLY ATTRACTED. IN SUCH A SITUATION, I.E. WHEN LABOUR HI RED BY THE ASSESSEE THROUGH CDLB IS CONSIDERED TO BE IN ASSESSEES EMPL OYMENT, THE PAYMENTS MADE TO CDLB CANNOT BE TREATED AS PAYMENTS FOR ANY WORK, BUT NEVERTHELESS THESE PAYMENTS COULD STILL BE COVERED BY THE PROVISIONS OF SECTION 194C BECAUSE THESE ARE PAYMENTS MADE FOR SU PPLY OF LABOUR WHICH ARE SPECIFICALLY COVERED BY SECTION 194C(1). CDLB I S AN AGENT OF THE STEVEDORES LIKE THE ASSESSEE IN THE SENSE THAT THE LABOUR IS RECRUITED BY THE ASSESSEE THROUGH CDLB, BUT WHEN THIS FACT DOES NOT AFFECT THE NATURE OF PAYMENT BY THE ASSESSEE TO THE CDLB WHICH IS ADM ITTEDLY IN THE NATURE OF PAYMENT FOR SUPPLY OF LABOUR. THE REASONING ADOP TED BY THE COMMISSIONER (APPEALS), THOUGH SOMEWHAT IMPRESSIVE AT FIRST GLANCE, IS FALLACIOUS. THERE IS NO CAUSE AND EFFECT RELATIONSH IP BETWEEN WORKERS ASSIGNED BY THE CDLB HAVING EMPLOYER WORKMAN RELATI ONSHIP WITH THE ASSESSEE, AND THE PAYMENTS BEING MADE BY THE ASSESS EE TO CDLB BEING NOT IN THE NATURE OF PAYMENT FOR SUPPLY OF LABOUR. SIMILAR VIEW IS TAKEN BY HONBLE KARNATAKA HIGH COU RT IN THE CASE OF J. RAMA VS. CIT (2010) 236 CTR 105 (KTK.). SINCE THE CIT(A) HAS NOT EXAMINED THE ISSUE AND PASSED A CRYPTIC ORDER, WE FEEL THAT IN THE INTEREST OF JUST ICE THIS ISSUE NEEDS RE-EXAMINATION AT THE LEVEL OF CIT(A) AFRESH. THE CIT(A) WILL ALSO EXAMI NE THE IMPLICATION OF THE AMENDMENT 3 ITA NO. 1592/KOL/2011 RELIABLE TRANSPORT AGENCY, AY 2008-09 BY VIRTUE OF WHICH THE SECOND PROVISO WAS INSERTED TO SECTION 40(A)(IA) OF THE ACT BY FINANCE ACT, 2013, WHICH WAS HELD TO BE PROSPECTIVE BY HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD., ITA NOS. 160 & 161/KOL/2015, WHEREIN IT HAS BEEN HELD AS UNDER: NO S. 40(A)(IA) DISALLOWANCE FOR FAILURE TO DEDUCT TDS ON PAYMENT IF PAYEE HAS OFFERED AMOUNT TO TAX. SECOND PROVISO TO S. 40(A)(I A) INSERTED BY FINANCE ACT 2013 W.E.F. 1.4.2013 SHOULD BE TREATED AS CURATIVE AND T O HAVE RETROSPECTIVE EFFECT FROM 1.4.2005. ITAT PRAISED FOR 'THOROUGH ANALYSIS' OF T HE PROVISION IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MATTER TO HIS FILE FOR FRESH ADJUDICATION IN TERMS OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD. CITED SUPRA WHERE IN IT IS HELD THAT IN CASE THE RECIPIENTS OF THESE EXPENSES HAVE INCLUDED THE RECE IPTS IN THEIR RESPECTIVE RETURNS OF INCOME FILED WITH THE DEPARTMENT AND PAID TAXES ON THE SAME IN THAT CASE THE DISALLOWANCE IN THE HANDS OF THE ASSESSEE IS TO BE DELETED. THE INFORMATION REGARDING THE RECIPIENTS INCOME TAX PARTICULARS, THEIR PAN ETC. ARE TO BE GI VEN BY THE ASSESSEE TO THE AO. THIS APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOS ES. 5. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.02.2 016 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-2(3), ASANSOL. 2 RESPONDENT M/S. RELIABLE TRANSPORT AGENCY, WEST A PCAR GARDEN, ASANSOL-713304 3 . THE CIT(A), ASANSOL 4. 5. A CIT ASANSOL DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .