Hariharan Auto Sales & Service (Firm), Pattukkottai V. ITO, Thanjavur

ITA 1602/CHNY/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4078 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAGADEVAN
• Assessee Lawyers: ULAGANATHAN SHANKAR
• Section: 139

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC D BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1602/MDS/2011 ( / ASSESSMENT YEAR: 2006-07) M/S. HARIHARAN AUTO SALES & SERVICE (FIRM), NO.196/B-1, PANNAVAYAL ROAD, PATTUKKOTTAI 614 602. VS THE INCOME TAX OFFICER, WARD I(1), THANJAVUR PAN : AADFH7372P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI ULAGANATHAN SHANKAR, FCA /RESPONDENT BY : SHRI SAGADEVAN, JCIT /DATE OF HEARING : 04.07.2017 !' /DATE OF PRONOUNCEMENT : 10.07.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), TIRUCHIRAPALLI, DATED 28.07.2011 IN ITA NO.230/2008 -09 FOR THE ASSESSMENT YEAR 2006-07 PASSED U/S.250(6) R.W.S.143 (3) & 147 OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE LD.AO TO TH E EXTENT OF RS.3,06,678/- U/S.40(A)(IA) OF THE ACT. 2 ITA NO.1602MDS/2011 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM ENGAGED IN THE BUSINESS AS DEALER OF MINIDOOR VAN, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 10.10.2006 ADMITTING TOTAL INCOME OF RS.1,58,240/-. SUBSEQUEN TLY THE CASE WAS SELECTED FOR SCRUTINY AND FINALLY ORDER WAS PAS SED U/S.143(3) R.W.S.147 OF THE ACT ON 24.12.2008, WHEREIN THE LD. AO DISALLOWED RS.3,71,148/- U/S.40(A)(IA) OF THE ACT, STATING THAT NO TAX HAS BEEN DEDUCTED AT SOURCE U/S.194(A) OF THE A CT. ON APPEAL, THE LD.CIT(A) PARTLY CONFIRMED THE ORDER OF THE LD.AO BY DELETING THE AMOUNT RS.64,470/- OUT OF THE AGGREGAT E DISALLOWANCE. THEREBY THE LD.CIT(A) SUSTAINED THE A DDITION OF RS.3,06,678/- INVOKING SECTION 40(A)(IA) OF THE ACT . 4. AT THE OUTSET, THE LD.AR SUBMITTED THAT THE RECI PIENTS OF THE AMOUNT PAID BY THE ASSESSEE HAD DULY DECLARED THE A MOUNT IN THEIR RESPECTIVE RETURN OF INCOME AND PAID TAX. HE THEREFORE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO, SO THAT THE ASSESSEE MAY BE IN A POSITION TO COMPLY WITH SECTION 201 AND THE RECENTLY AMENDED PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, WHICH STATES AS FOLLOWS:- 3 ITA NO.1602MDS/2011 PROVISO TO SECTION 40(A)(IA :-) PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF T HE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201, TH EN, FOR THE PURPOSE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DA TE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYE E REFERRED TO IN THE SAID PROVISO SECTION 201 : (1) WHERE ANY PERSON, INCLUDING THE PRINCIPAL OFFIC ER OF A COMPANY,- A) WHO IS REQUIRED TO DEDUCT ANY SUM IN ACCORDANCE WIT H THE PROVISIONS OF THIS ACT ; OR B) REFERRED TO IN SUB-SECTION (1A) OF SECTION 192, BEI NG AN EMPLOYER, DOES NOT DEDUCT, OR DOES NOT PAY, OR AFTER SO DEDUC TING FAILS TO PAY, THE WHOLE OR ANY PART OF THE TAX, AS REQUIRED BY OR UNDER THIS ACT, THEN, SUCH PERSON, SHALL, WITHOUT PREJUDI CE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX : PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL O FFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON T HE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT- I. HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 13 9 ; II. HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOM E IN SUCH RETURN OF INCOME ; AND III. HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFE CT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED (RULE 31 ACB AND FORM NO.26A) 4 ITA NO.1602MDS/2011 5. THE LD.DR STRONGLY OBJECTED TO THE SUBMISSION OF THE LD.AR AND PLEADED TO SUSTAIN THE ORDER OF THE LD.CI T(A). 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS WORTHWHILE TO MENTION THAT THE TRIBUNAL ON SEVERAL OCCASIONS HAS HELD THAT THE RECENTLY AMENDED PROVISO TO SECTION 40(A)(IA) OF THE ACT IS A BENEFICIAL PROVISION WHICH BRINGS DOWN THE RIGGER OF SECTION 4 0(A)(IA) OF THE ACT AND THEREFORE IT SHOULD BE GIVEN EFFECT RETROSP ECTIVELY. FURTHER IF THE TAXES ARE DULY PAID BY THE RECIPIENT S, THE REVENUE IS AT NO LOSS AND THERE IS NO SCOPE FOR REVENUE LEA KAGE TO THE DEPARTMENT. IN THIS SITUATION, IM OF THE CONSIDER ED VIEW THAT THE ASSESSEE SHOULD BE PROVIDED WITH AN OPPORTUNITY TO ESTABLISH HIS CLAIM AND COMPLIANCE IN ACCORDANCE WITH THE RECENTL Y AMENDED PROVISO OF SECTION 40(A)(IA) OF THE ACT. THEREFORE , I HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD.AO, THEREBY P ROVIDING AN OPPORTUNITY TO THE ASSESSEE TO COMPLY WITH THE RELE VANT PROVISIONS OF THE ACT. I ALSO DIRECT THE LD.AO TO GRANT RELIEF TO THE ASSESSEE IF IT ESTABLISHES THAT THE RECIPIENTS OF T HE PAYMENTS MADE BY THE ASSESSEE HAVE DECLARED THE SAME IN THEI R 5 ITA NO.1602MDS/2011 RESPECTIVE RETURN OF INCOME AND PAID TAX DULY, AND ON SUBMISSION OF THE REQUISITE CERTIFICATE ISSUED BY THE QUALIFIE D CHARTERED ACCOUNTANT AS PER THE PROVISIONS OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 10 TH JULY, 2017 AT CHENNAI. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER #$ /CHENNAI, %& /DATED 10 TH JULY, 2017 JR & () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. / /GF