Assistant Commissioner of Income Tax, Bangalore V. Shri. V.Dinesh Reddy, Bangalore

ITA 1666/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7764 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK KULKARNI

Judgement Text

ITA.1666/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1666/BANG/2016 (ASSESSMENT YEAR : 2012-13) ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 1(2)(2), BENGALURU .. APPELLANT V. SHRI. V. DINESH REDDY, NO.44/4, FAIRFIELD LAYOUT, RACE COURSE ROAD, BENGALURU 560001 .. RESPONDENT PAN : ABIPV7701Q ASSESSEE BY : SHRI. ASHOK KULKARNI, ADVOCATE REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT HEARD ON : 20.06.2018 PRONOUNCED ON : 04.07.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE CIT (A)-1, BENGALURU, DT.06.06.2016 FOR THE AY 2012 -13, ON THE FOLLOWING GROUNDS : ITA.1666/BANG/2016 PAGE - 2 ITA.1666/BANG/2016 PAGE - 3 02. BRIEF FACTS ARE AS FOLLOWS. THE CASE OF THE AS SESSE WAS SELECTED FOR SCRUTINY. NOTICE U/S.142(1) WAS ISSUE D. THE AO FOUND THAT THE ASSESSE HAS PAID RS.194,46,277/- TO ONE FI RM B. V. REDDY & SONS. HOWEVER THE ASSESSEE COULD NOT PRODUCE ANY E VIDENCE FOR HAVING DEDUCTED APPROPRIATE TDS ON THE SAID AMOUNT. THE AO HAS MADE DISALLOWANCE OF RS.1,94,46,277/-. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 03. BEFORE THE CIT (A), THE ASSESSEE PRODUCED THE F ORM NO.26A DULY SIGNED BY THE CHARTERED ACCOUNTANTS OF B. V. R EDDY & SONS. CONSIDERING THE ABOVE, THE CIT (A HAS DIRECTED THE AO TO EXAMINE THE DETAILS OF INCOME AND TAXES PAID BY THE PAYEE A ND THE EXPENSES AS CLAIMED BY THE ASSESSEE SUBJECT TO FINDING OF SU CH VERIFICATION. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE THE CIT ( A). 04. THE LD. DR RELIES UPON THE ORDER PASSED BY THE AO AND FURTHER SUBMITTED THAT THE CIT (A) HAS NO POWER TO REMAND THE MATTER HAVING A COTERMINOUS POWER. THEREFORE INSTE AD OF REMANDING THE MATTER TO THE FILE OF THE AO FOR VERI FICATION OF FORM 26, THE EXERCISE SHOULD HAVE BEEN DONE BY THE CIT ( A). 05. IN THIS REGARD THE LD. AR HAS SUBMITTED THAT TH E FORM 26A WAS DULY FURNISHED BY THE ASSESSEE DURING THE PROCE EDINGS BEFORE THE LOWER AUTHORITIES AND THEREFORE IN TERMS OF THE PROVISO TO SECTION 4(A)(IA), THE ORDER OF THE CIT (A) IS CORRECT. FUR THER THE LD. AR RELIES UPON THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE MATTER OF CIT V. CALCUTTA EXPORTS CO., IN CIVIL APP EAL NO.4339- ITA.1666/BANG/2016 PAGE - 4 4340 OF 2018, DT.24.04.2018 AND MORE PARTICULARLY P ARA 13 TO THE FOLLOWING EFFECT : 13. THE DISPUTE IN THE PRESENT CASE REVOLVES AROUND THE FACT THAT WHETHER THE AMENDMENT MADE BY THE FINANCE ACT, 2010 TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE IT ACT IS RETROSPECTIVE IN NATURE SO AS TO APPLY TO THE PRESE NT CASE OR NOT. IF IT IS SO, THEN THE TAX DULY PAID BY THE ASSESSEE ON 01.08.2005 IS WELL IN ACCORDANCE WITH LAW AND THE ASSESSEE IS ALLOWED TO CLAIM DEDUCTION FOR THE TAX DEDUCTED AND PAID TO THE GOVERNMENT, IN THE PREVIOU S YEAR IN WHICH THE TAX WAS DEDUCTED. ON THE BASIS OF THE ABOVE IT WAS SUBMITTED THAT APP EAL OF THE REVENUE IS REQUIRED TO BE DISMISSED. 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. FROM THE RECORD IT IS NOT CLEAR WHETHER THE CIT (A) HAS SOUGHT A REMAND REPORT FROM THE AO WITH RESPECT TO INCOME OF FERED AND TAXES PAID BY THE PAYEE AS REFLECTED IN FORM 26A DU LY CERTIFIED BY THE ACCOUNTANT OF THE PAYEE AND FURTHER AS PER THE POSITION OF LAW, IT IS APTLY MENTIONED IN SECTION 251 THAT THE CIT (A) HAS NO POWER TO REMAND THE MATTER AND THEREFORE THE EXERCISE DONE B Y THE CIT (A) IS INCORRECT. IN VIEW OF THE ABOVE, THOUGH THE POSITI ON OF LAW WITH RESPECT TO APPLICABILITY OF THE PROVISO RETROSPECTI VELY, IS SETTLED BY THE HONBLE SUPREME COURT IN THE MATTER OF CALCTTA EXPORT CO., (SUPRA), WE DEEM IT APPROPRIATE TO SEND BACK THE MA TTER TO THE FILE OF THE CIT (A) TO VERIFY THE FORM 26A IN RESPECT OF IN COME OFFERED AND TAXES PAID BY THE PAYEE AND IF THE CIT (A) AND AFTE R VERIFICATION THE NECESSARY CORRESPONDING BENEFIT SHALL BE GIVEN TO T HE ASSESSEE IN TERMS OF THE PROVISO TO SECTION 4(A)(IA) OF THE ACT . NEEDLESS TO SAY ITA.1666/BANG/2016 PAGE - 5 THAT THE CIT (A) SHALL GIVE OPPORTUNITY TO THE ASSE SSE AND THE AO IN ACCORDANCE WITH LAW. 07. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF JULY, 2018. SD/- SD/- (INTURI RAMA RAO) ( LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 07.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.