Yashwant Dadasaheb Bandigare, Kolhapur V. Principal Commisisoner of Income-tax : 2,

ITA 1721/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9280 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-12-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Competent authority
• Section: 194C; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1721/PUN/2015 / ASSESSMENT YEAR : 2011-12 SHRI YASHWANT DADASAHEB BANDIGARE, PLOT NO.46, AJINKYATARA SOCIETY, JAYSINGPUR, DIST. KOLHAPUR 416 101 PAN : ABAPB9866C . /APPELLANT VS. PR. CIT-2, KOLHAPUR . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : DR. VIVEK AGGARWAL, CIT-DR / DATE OF HEARING : 01.03.2018 / DATE OF PRONOUNCEMENT: 09.03.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE REVISION OR DER OF PR.CIT-2, KOLHAPUR, DATED 27-11-2015 U/S.263 OF THE ACT FOR THE ASSESSMENT YEAR 2011-12. THE CLAIM ON ACCOUNT OF TRANS PORTATION EXPENSES OF RS.61,18,650/- IS THE ISSUE UNDER THE REVISION ORDER OF THE PR.CIT. 2. BRIEFLY STATED BACKGROUND FACTS OF THE CASE INCLUDE THA T THE ASSESSEE IS AN INDIVIDUAL AND FILED THE RETURN OF INCOME DEC LARING INCOME OF RS.8,47,430/-. DURING THE SCRUTINY PROCEEDINGS A FTER EXAMINING THE BOOKS OF ACCOUNT FILED BY THE ASSESSEE, AO N OTICED THAT THERE IS A CLAIM OF EXPENDITURE ON ACCOUNT OF TRANSPORT EXPENSES 2 AMOUNTING TO RS.61,18,650/-. ON FINDING THAT THE SAID CLAIM IS NOT FULLY SUPPORTED BY DOCUMENTARY EVIDENCES AND THEY ARE ONLY SUPPORTED BY SELF-MADE VOUCHERS, ON AGREED BASIS, A ROUND-SUM OF R S.3 LAKHS WAS DISALLOWED BY THE AO ON ADHOC BASIS ON THAT ACCOUNT U/S .37(1) OF THE ACT. ACCORDINGLY, THE ASSESSED INCOME WAS DETERMINED A T RS.11,47,430/- VIDE HIS ASSESSMENT ORDER DATED 03-01-2013. 3. ON VERIFICATION OF RECORDS BY THE PR. CIT, ON FINDING THAT THE AO FAILED TO CALL FOR THE DETAILS OF THESE TRANSPORT EXPENSES, D ETAILS OF THE NAMES OF THE PAYEES, THEIR PAN NUMBERS AND COMPLIANCE TO THE PROVISIONS OF SECTION 194C(6) OF THE ACT ETC., THE PR.CIT HE LD THAT THE SAID ORDER PASSED BY THE AO ON 03-01-2013 IS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 263 OF THE ACT, A SHOW CAU SE NOTICE WAS ISSUED AS WELL AS THE REPEATED OPPORTUNITIES WERE GRANTE D TO THE ASSESSEE. EVENTUALLY, THE PR.CIT HELD THAT THE AO DID N OT PROPERLY VERIFIED THE CLAIMS, APPLIED HIS MIND AND HAS FAILED TO EXAMINE THE FACTS FROM THE ANGLE AS TO WHETHER THERE IS ANY VIOLATION TO TH E PROVISIONS OF SECTION 194C OF THE ACT. THE PR.CIT SET-ASIDE THE REGULAR ASSESSMENT ORDER OF THE AO AND DIRECTED HIM TO CALL FOR RELEVANT DETAILS AND EXA MINE THEM BEFORE MAKING DENOVO ASSESSMENT AFTER GRANTING REASONABLE OPPORTUNITY OF BEING GRANTED TO THE ASSESSEE. 4. IN PARA NO.6, THE PR.CIT ANALYSED THE ALLEGATIONS AND THE DETAILS OF ERRONEOUS ASSESSMENT OF LAW RELATING TO THE PROVISIONS OF SECTION 194C(6) AND 194C(7) OF THE ACT. HE ALSO RELIED ON THE SUPR EME COURT JUDGMENT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS. CIT 243 ITR 83 (SC) AND DELHI HIGH COURT JUDGMENT IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL.CIT 99 ITR 375 APART FROM MANY OTH ERS. PARA NO.8 ALONG WITH ITS SUB-PARAGRAPHS CONTAINS THE DETAILED D ISCUSSION 3 SUPPORTING HIS VIEW FOR HOLDING THE ORDER OF THE AO AS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AGGRIEVED WIT H THE SAME, THE ASSESSEE IS IN APPEAL BEFORE US. 5. LD. COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE FACTS AND SUBMITTED THAT THE ASSESSEE MADE PAYMENTS AMOUNTING T O RS.61,18,650/- TO THE TRANSPORTERS ON ACCOUNT OF TRANSP ORT CHARGES. REFERRING TO THE REQUIREMENT OF FURNISHING OF THE PAN DETAILS AS SPECIFIED U/S.194C(6) OF THE ACT BY THE PAYEES RELATING TO T HE SAID TRANSPORT CHARGES, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT HE HAS OBTAINED THE PAN NUMBERS OF THE PAYEES, WHICH RUN INTO A ROUND 360 TRANSPORTERS, AND STATED THAT ASSESSEE HAS COMPLIED WIT H THE PROVISIONS OF SUB-SECTION (6) OF SECTION 194C OF THE ACT. IN THIS REGARD, LD. COU NSEL FOR THE ASSESSEE FILED A CHART CONTAINING THE NAMES OF THE PAYEES GIVING TRUCK NUMBERS AND AMOUNT OF CASH PAID BY THE ASSESSE E. LD. COUNSEL SUBMITTED THAT THE PAN DETAILS ARE NOT FULLY FURNISHED TO THE ASSESSEE. TO THE EXTENT THEY ARE AVAILABLE, THE SAME ARE GATHERE D AND ARE IN THE POSSESSION OF THE ASSESSEE. IN OTHER WORDS, ASSESSEE FA ILED TO ENSURE THE FURNISHING OF PAN NUMBERS BY THE PAYEES AND ALSO FURN ISHING OF THE SAME TO THE DEPARTMENT AS PER THE LAW. FURTHER, MENT IONING ABOUT THE ASSESSEES FAILURE TO FURNISH THE PAN DETAILS OF THE PAYEES TO THE COMPETENT AUTHORITY, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT IN THE ABSENCE OF PRESCRIBED FORM AS REQUIRED U/S.194C (6) OF THE ACT, ASSESSE E CANNOT BE ASKED TO DO THE IMPOSSIBLE AND THEREFORE, THIS IS THE REASON FOR FAILURE TO FURNISH THE PAN DETAILS TO THE INCOME-TAX AUT HORITIES IN COMPLIANCE WITH THE PROVISIONS OF SECTION 194C(7) OF THE ACT. FURTHER, HE MENTIONED THAT THE AO HAS ALREADY PASSED FRESH ASSE SSMENT ORDER GIVING EFFECT TO THE REVISION ORDER OF THE PR.CIT DISALLOWING E NTIRE CLAIM OF TRANSPORTATION CHARGES. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT 4 THE REVISION ORDER PASSED BY THE PR.CIT IS NOT CORRECT AND UNSUSTAINABLE IN LAW. REFERRING TO THE ABSENCE OF ERRONEOUS ASSUMPTION OF FACT OR LAW, LD. COUNSEL RELIED ON THE JUDGMENT OF SUPREME COURT IN T HE CASE OF MALABAR INDUSTRIAL COMPANY LTD. (SUPRA) APART FROM MANY OTHERS. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE JUSTIFIED THE REVISION ORDER OF THE PR.CIT AND STATED THAT THE AO IS NOT AWAR E OF THE FACT ABOUT THE REQUIREMENT OF THE ASSESSEE TO FURNISH THE PAN PART ICULARS OF THE PAYEES TO THE REVENUE. FURTHER, THE AOS FAILURE TO MAK E PROPER ENQUIRIES INTO THE CLAIM OF TRANSPORTATION CHARGES IS OBVIOU S FROM THE WAY THE ASSESSMENT IS MADE BY THE AO BY MERELY RESOR TING TO AN ADHOC ADDITION OF RS.3 LAKHS. FURTHER, HE SUBMITTED THAT THIS IS T HE CASE WHERE AO HAS NOT APPLIED HIS MIND TO THE FACTS OF THE CAS E AS WELL AS NOT COMPLIED WITH THE LEGAL REQUIREMENT ETC. HE JUSTIFIED TH E REVISION ORDER OF THE PR.CIT DATED 27-11-2015 IN ITS ENTIRETY. 7. WE HEARD BOTH THE PARTIES ON THE VALIDITY OF THE REVISIO N ORDER BY THE PR.CIT. WE HAVE TO EXAMINE WHETHER THE ORDER PASS ED BY THE AO ORIGINALLY CONSTITUTES AN ERRONEOUS ORDER IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE OR OTHERWISE. ON HEARING BO TH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE AO AND THE PR.CIT, W E FIND THE REGULAR ASSESSMENT ORDER HAS A REFERENCE TO THE SOLITAR Y ISSUE OF TRANSPORTATION CHARGES. CONTENTS OF PARA NO.4.2 ARE R ELEVANT AS THE SAME IS AN OPERATIONAL PARA DISALLOWING RS.3 LAKHS AFTER COND UCTING A TEST-CHECK OF THE EVIDENCES. IN OTHER WORDS, IT IS A CAS E WHERE AO HAS NOT GONE INTO THE DETAILS, SCRUTINIZED THE ACCOUNT THOROU GHLY AFTER PROPER EXAMINATION OF THE EVIDENCES IN FULL. MAKING AN ASS ESSMENT BY RELYING ON THE PRINCIPLE OF TEST-CHECKING, IN OUR VIEW, IS N OT A SUSTAINABLE PROPOSITION OF THE AO. THEREFORE, IN OUR VIEW, THE PROCEDUR E 5 ADOPTED BY THE AO FALLS SHORT OF THE REQUIREMENT OF MAKIN G OF AN ASSESSMENT UNDER THE STATUTE. REGARDING THE ERRONEOUS ASSUMPTION OF LAW QUA THE VERIFIC ATION BY THE AO, WE FIND THE PROVISIONS OF SUB-SECTION (6) AND (7) O F SECTION 194C OF THE ACT HAVE NOT BEEN EXAMINED BY THE AO WHILE MAKING THE ASSESSMENT U/S.143(3) OF THE ACT. ON OBSERVING THE PART ICULARS FURNISHED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US REGARDING THE PAN PARTICULARS, IT IS EVIDENT THAT THE PAN PARTICULARS WER E NOT FULLY FURNISHED TO THE ASSESSEE BY THE PAYEES AND THERE IS N O EXAMINATION WHATSOEVER REGARDING THE REQUIREMENT OF MAKING TDS AS P ER THE PROVISIONS OF SUB-SECTION (6) OF SECTION 194C OF THE ACT. IT IS AN ADMITTED FACT THAT PROVISIONS OF SUB-SECTION (7) OF SECTION 1 94C OF THE ACT DEALS WITH FURNISHING OF PAN PARTICULARS TO THE INCOME-T AX AUTHORITIES AND THE SAME WERE NOT COMPLIED WITH BY THE ASSESSEE. IN OUR VIEW, THE REASON GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE ABOUT THE ABSENCE OF ANY PROFORMA IS NOT SUSTAINABLE. THE REFORE, WE ARE OF THE OPINION THAT THE FINDING OF PR.CIT GIVEN IN PARA N O.8.2 ONWARDS IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MARCH, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 09 TH MARCH, 2018 6 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT-2, KOLHAPUR 4. , , B BENCH PUNE; 5. / GUARD FILE.