ITO, CHENNAI V. Shri G.Sujith, CHENNAI

ITA 1649/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1116 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-03-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G BASKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] I.T.A.NO.1649/MDS/2012 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER BUSINESS WARD XIV(2) CHENNAI VS SHRI G. SUJITH H 25B PERIYAR NAGAR EAST AVENUE, KORATTUR CHENNAI - 80 [PAN BDXPS 4971D] (APPELLANT) (RESPONDENT) C.O.NO.163/MDS/2012 ASSESSMENT YEAR : 2009-10 SHRI G. SUJITH H 25B PERIYAR NAGAR EAST AVENUE, KORATTUR CHENNAI - 80 VS THE INCOME TAX OFFICER BUSINESS WARD XIV(2) CHENNAI (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY : SHRI SHAJI P. JACOB, ADDL. CIT ASSESSEE BY : SHRI G. BASKAR, ADVOCATE DATE OF HEARING : 07-03-2013 DATE OF PRONOUNCEMENT : 15-03-2013 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REV ENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)- XII,CHENNAI, DATED 22.5.2012. I.T.A.NO.1649/12 C.O.NO.163/12 :- 2 -: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1 . THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE . 2 . 1 . THE ID. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE FOR NON- DEDUCTION OF TDS U/S 40(A)(IA ) OF THE IT ACT ON PAYMENT FOR ADVERTISEMENT OF RS. 82 , 84 , 203/ - OUT OF TOTAL DISALLOWANCE OF RS . 87,04,721/- 2 . 2 THE ID. CIT(A) FAILED TO APPRECIATE THE FACT THA T AS PER SEC . 40(A)(IA) OF THE IT ACT , THE TAX HAS TO BE DEDUCTED BY THE ASSESSEE ON THE PAYMENTS MADE IRRESPECTIVE O F WHETHER PAID OR PAYABLE AND THAT NON- DEDUCTION OF TAX WARRANTS ACTION U/S 40A(IA) OF THE ACT . 2.3 HAVING REGARD TO THE FACT THAT THE RELIED UPON DECISION OF THE CIT(A) IN THE CASE OF M/S MERILYN S HIPPING & TRANSPORTS( 20 TAXMANN . COM 244) (VIZAG) (SS) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND FURTHER APP EAL HAS BEEN PREFERRED U/S 260 A IN THE HIGH COURT . 2 . 4 IT IS SUBMITTED THAT THE WORD 'PAYABLE' INCLUDES THE WORD 'PAID' FOR THE PURPOSE OF SEC. 40(A)(IA) OF TH E IT ACT AS PER THE DECISION OF THE SANGALORE ITAT IN THE CA SE OF SMT . RAMA VS. ITO IN ITA NO . 1204/BANG/08 (AT) . 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS CRAVED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. 3. THE ASSESSEE, IN THE CROSS OBJECTION, HAS TAKEN TH E FOLLOWING GROUNDS: 1. THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN UPHOLDING THE ACTION OF THE AO IN CONCLUDI NG THAT THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE WHEN HE MADE THE PAYMENTS TO THE FOLLOWING ENTITIES, WHO AR E AGENTS OF THE PRINT MEDIA. HE OUGHT TO HAVE SEEN TH AT THE ASSESSEE IS UNDER NO OBLIGATION TO DEDUCT TAX AT SOURCE: I.T.A.NO.1649/12 C.O.NO.163/12 :- 3 -: A. M/S RAJESWARI COMMUNICATION CENTRE, B. M/S UPASANA, C. M/S VIJAY MEDIA, D. M/S PRECIOUS PUBLICATIONS PVT. LTD; AND E. M/S JEEVAN AGENCIES. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE VIEW OF THE ASSESSING OFFICER IS TOTA LLY INCORRECT AND THIS HAS BEEN CLARIFIED BY THE FINANCE MINISTER HIMSELF ON THE FLOOR OF THE HOUSE WHEN THE PROVISION WAS INTRO DUCED. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO H AVE FOLLOWED THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SANDS ADVERTISING COMMUNICATIONS P LTD WHEREIN A SIMILAR ISSUE HAD BEEN CONSIDERED BY THE BENCH. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN UPHOLDING THE LEVY OF INTEREST U/S.234B OF THE IT ACT. HE OUGHT TO HAVE SEEN THAT ALL THE RECEIPTS OF THE ASSESSEE HAV E SUFFERED TAX DEDUCTION AT SOURCE AND IN FACT, THE ASSESSEE I S ENTITLED TO A REFUND. 5. IN ANY EVENT, THE COMMISSIONER OF INCOME-TAX (APPEA LS) OUGHT TO HAVE ALSO SEEN THAT THE ASSESSEE COULD NOT HAVE ANTICIPATED THE TECHNICAL DISALLOWANCE WHEN THE ADV ANCE TAX INSTALLMENTS WERE DUE AND PAYABLE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED T HE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAIL ABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER DISALLOWED ` 82,84,203/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS DEFAULTED BY NOT DEDUCTING I TDS ON ` 82,84,203/- PAID TO M/S RAJESWARI COMMUNICATIONS CE NTRE, M/S UPASANA ADVANTAGE COMMUNICATION P. LTD., M/S VIJAY MEDIA, M/S I.T.A.NO.1649/12 C.O.NO.163/12 :- 4 -: PRECIOUS PUBLICATIONS LTD., AND M/S JEEVAN AGENCIES FOR ADVERTISING EXPENSES. 5. ON APPEAL, THE CIT(A) DELETED THE DISALLOWANCE BY F OLLOWING THE DECISION OF VISAKHAPATNAM SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORTS, 20 TAXMA NN.COM 244 (VIZAG) (SB). 6. AT THE TIME OF HEARING, BEFORE US, THE A.R OF THE ASSESSEE SUBMITTED THAT HIS CONTENTION TO THE EFFECT THAT TH E ASSESSEE WAS NOT LEGALLY REQUIRED TO DEDUCT ITDS ON ` 82,84,203/- AS PER THE PROVISIONS OF LAW WAS NOT ADJUDICATED UPON BY THE CIT(A) BECAU SE OF THE FACT THAT DISALLOWANCE WAS OTHERWISE NOT SUSTAINABLE IN VIEW OF THE SPECIAL BENCH DECISION MENTIONED ABOVE. HE, THEREFORE, PRAY ED THAT AS THE OPERATION OF THE DECISION OF THE SPECIAL BENCH HAS BEEN STAYED BY THE HON'BLE A.P. HIGH COURT, THE ISSUE SHOULD BE RESTO RED TO THE FILE OF THE CIT(A) FOR DECIDING THE OTHER CONTENTION OF THE AS SESSEE ON MERITS. HE CONTENDED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SANDS ADVERTISING COMMUNICATIONS(P) LTD. VS DY. CI T, [2010] 37 SOT 179(BANG). I.T.A.NO.1649/12 C.O.NO.163/12 :- 5 -: 7. THE DR SUBMITTED THAT HE HAS NO OBJECTION ON RESTOR ING THE ISSUE BACK TO THE FILE OF THE CIT(A). 8. WE, THEREFORE, RESTORE THE ISSUE BACK TO THE FILE O F THE CIT(A) FOR ADJUDICATION AFRESH AS PER LAW AFTER ALLOWING R EASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. 9. BE IT ALSO MENTIONED THAT THE CIT(A) SHALL BE FREE TO CONSIDER THE DECISION OF THE HIGHER AUTHORITIES IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORTS (SUPRA), IF AVAILABLE TO HIM, WHEN THE ISSUE IS TAKEN UP AFRESH. THUS, THE GROUNDS OF APPEAL OF TH E REVENUE AND THE GROUNDS OF CROSS OBJECTION OF THE ASSESSEE ARE ALL OWED FOR STATISTICAL PURPOSES. 2. IN THE RESULT, BOTH, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 15 TH OF MARCH, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 15 TH MARCH, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR