SH. KAMAL KANT GUPTA, JAMMU V. INCME TAX OFFICER WARD-2(2), JAMMU

ITA 161/ASR/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1908 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(3); 40(a)(ia); 201(1); 250; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 161/Asr/2019 Assessment Year: 2012-13 Sh. Kamal Kant Gupta Prop. M/s Cee Aay International C/o M/s Chuni Lal Amar Nath R.N. Bazar, Jammu [PAN: ADCPK 6770C] Vs. Commissioner of Income Tax/ Income Tax Officer, Ward 2(2) Jammu (J&K) (Appellant) (Respondent) Appellant by : Sh. K. R. Jain, Adv. Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 20.04.2022 Date of Pronouncement: 19.05.2022 ORDER Per Anikesh Banerjee, JM: The instant appeal was filed by the assessee is the order of the learned Commissioner of Income Tax (Appeal)-2, Ludhiana, {in brevity the CIT(A)} bearing appeal number 260/ROT/IT/CIT(A)–2/LDH/2018–19, order dated 14/12/2018 passed under section 250 (6) of the Income Tax Act, 1961 (in brevity the Act) for assessment year 2012–13. The said order was originated by order of the learned Income Tax Officer, Ward – 2 (2), Jammu (in brevity the AO) passed under section 143(3) of the Act, date of order 23.02.2015, for assessment year 2012-13. ITA No. 161/Asr/2019 Kamal Kant Gupta v. ITO 2 2. The brief fact of the case is that assessee paid to its parties M/s K.C. Cold Storage amount to Rs. 618,630/– for cold storage charges and Rs. 1,08,650/- to M/s C.A. International for security charges. No TDS was deducted at source. The assessee violated the section 201 of the Act. Both the expenses are disallowed by the learned AO under section 40(a)(ia) of the Act. The Aggrieved assessee filed appeal before the learned CIT(A) and filed the certificates before the ld appellant authority. Both the certificates are from its contractors, M/s K.C. Cold Storage and M/s C.A. International as proof of payment of tax by said contractors on behalf of contractee against these payments. The learned CIT (A.) did not take cognizance of both the certificates of the contractors and upheld the order of the ld AO accordingly. The aggrieved assessee filed an appeal before us for further adjudication. 3. During the appeal proceeding the ld. councel of the assessee filed written submission which is kept in record. The assessee also filed additional evidence through his advocate. The assessee enclosed two certificates from two parties as proof that both the incomes are declared in the returns of the parties. No revenue was miscarriage related to the payments. The certificates are enclosed in annexure A and B in the submission of the assessee. The extract of the order of ld CIT(A) is as follows:- “7.1 In support of ground No. 4 of appeal, the assessee through his learned AR has filed written submissions vide letter dated 06.12.2018, the relevant paras of which read as under:- Assessee is a wholesale dry fruit merchant. During the year assessee paid Rs. 6,18,630/- to M/s K.C. Cold Storage and Ice Factory on account of Cold Storage charges and has not deducted tax at source. Similarly assessee paid Rs. 1,08,650/- on account of security service and did not deducted tax at source. The ITA No. 161/Asr/2019 Kamal Kant Gupta v. ITO 3 A.O. by evoking the provisions of section 40(a)(ia) of the act disallowed both the payments of Rs. 6,18,636/- and Rs. 1,08,658/-. The second proviso to section 40(a)(ia) of the Income Tax Act introduced by the Finance Act 2012 (which provides that where an assessee fails to deduct whole or any part of the tax in accordance with the provisions of chapter XV1I-B but is not deemed to be an assessee in default under I* provision to 201(1) to the payee has filed the return taking into account such sum for computing his income has paid tax due on such income declared and furnishes a certificate to this effect from on accountant . the assessee shall not be subject to disallowed in respect of such source has retrospective application. When a provision is made in fiscal statute for the benefit of the assessee, in the absence of any express provision which by necessary implication gives a deferred impression, such provision which is beneficial to assessee must be read and gives effect retrospectively. Since assessee has paid expenses on account of Cold storage charges and security charges to M/s K.C Cold Storage and Ice Factory and Sparrow Security Agencies a certificate from the accountants of both the parties is being produced to show that this payment have been accounted for in then books and have paid tax thereon. 7.2. I have considered the observations of the Assessing Officer as made by him in the assessment order while making the impugned additions. I have also considered written submissions filed by the assessee through his learned AR vide letter dated 06.12.2018 on the issues under reference. I have further considered other material on record. On careful consideration of the assessment order, it has been noticed that the Assessing Officer has made the impugned additions as the assessee failed to deduct tax at source while making payments on account of cold storage charges and security charges. On the other hand, the learned AR of the assessee has submitted that as the payees have paid the tax on the amounts paid by the assessee, both the additions made by the Assessing Officer may be deleted. 7.3. On careful consideration of the rival contentions, it has been noticed that although the learned AR of the assessee has promised to produce the necessary certificate from the accountants of both the payees in the prescribed form for payment of tax on the amounts received from the assessee but could not produced the same. Under such circumstances, no relief can be allowed to the assessee. Moreover, I am also of the opinion that the assessee was required to deduct tax at source on both the payments ITA No. 161/Asr/2019 Kamal Kant Gupta v. ITO 4 under consideration. Under such circumstances, the action of the Assessing Officer in making additions of Rs.6,18,630/- on account of disallowance of expenses for failure on the part of the assessee to deduct tax at source on Cold Storage Charges paid to M/s K.C. Cold Storage & Ice Factory and Rs. 1,08,650/- on account of disallowance of expenses for failure on the part of the assessee to deduct tax at source while making payment on account of Security charges to Sparrow Security Agencies cannot be said to be unjustified and as such both the additions made by the Assessing Officer deserves to be upheld. Having said so, both the additions made by the Assessing Officer under reference are, therefore, upheld. In the result, the ground No. 4 of appeal taken by the assessee is dismissed too.” 4. The learned DR argued and relied on the orders of both the authorities. 5. We heard both the parties and consider the documents available on the record. The assessee had violated provision under section 201 of the Act by not deducting of TDS from the parties. Accordingly, violated the provision of section 40(a)(ia) of the Act. The said amount paid to the parties was duly declared in the return of the contractees. The certificates produced before learned CIT (A). But the Learned Authority did not consider the said documents and passed the Order Accordingly. In Case of, ACIT-III, Kanpur v. Raja Chkravarty [2015] 57 taxmann.com 88 (Lucknow - Trib.) observed that no disallowance under section 40(a)(ia) can be made if it is established that deductee has paid tax on amount received. In this stage we are unable to verify the sanctity of the documents. Hence, the matter is setting aside to the Ld CIT(A) for de-novo adjudication by considering the evidences of assessee. Further, the assessee should get the reasonable opportunity for representing its case. ITA No. 161/Asr/2019 Kamal Kant Gupta v. ITO 5 6. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 19.05.2022 Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member Date: 19.05.2022 *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order