M/s. Amal Chandra Roy, Alipurdual V. ITO, Ward - 1, Alipurduar, Jalpaiguri

ITA 184/KOL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9241 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P SARKAR
• Assessee Lawyers: A K CHAKRABORTY; D SAHA
• Keywords: Rectification of order
• Section: 143(3); 154

Judgement Text

, SMC(C) , , IN THE INCOME TAX APPELLATE TRIBUNAL SMC(C) BENCH : KOLKATA () BEFORE , ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM] / I.T.A NO. 184/KOL/2011 !' !' !' !'/ // / ASSESSMENT YEAR : 2005-06 M/S. AMAL CHANDRA ROY VS INCOME TAX OFFICER, WD- 1, ALIPURDUAR. (PAN-AAIFA 7092 G) ( $% /APPELLANT ) (&'$%/ RESPONDENT ) FOR THE APPELLANT: S/SHRI A. K. CHAKRABORTY & D. SAHA FOR THE RESPONDENT: SHRI P. P. SARKAR () / ORDER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A), JALPAIGURI IN APPEAL NO.12/APD/CIT(A)/JAL/2007-08 VIDE DATED 22.1 0.2010. THE ASSESSMENT WAS FRAMED BY ITO, WARD-1, ALIPURDUAR U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2005-06 VIDE HIS ORDER DATED 31.12.2008. THE ORDER UNDER DISPUTE BEFORE US IS PA SSED UNDER SECTION 154 OF THE ACT BY THE ITO WARD-1, ALIPURDUAR VIDE DATED 16.07.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN N OT ALLOWING CREDIT FOR TDS AS THERE WAS MISTAKE IN THE PAN MENTIONED IN THE TDS CERTIFI CATES. FOR THIS, THE ASSESSEE HAS RAISED FOLLOWING TWO EFFECTIVE GROUNDS: 1. THAT THE REJECTION OF CLAIM UNDER SECTION 154 OF INCOME TAX ACT 1961 OF THE APPELLANT BY THE LD. APPELLATE AUTHORITY IS NOT PR OPER. 2. THAT SRI AMAL CHANDRA ROY, A REPUTED CONTRACTOR OF RAILWAY DEPARTMENT AN INDIVIDUAL, PROCURED WORKS CONTRACT FROM N.F. RAIL WAY IN HIS INDIVIDUAL CAPACITY BUT DUE TO LACK OF MAN POWER AND FINANCIAL ABILITY , HE HAD FORMED A PARTNERSHIP FIRM ON 01.04.2001 FOR EXECUTION OF THE WORKS CONT RACT IN THE NAME OF THE FIRM M/S. AMAL CHANDRA ROY THROUGH THE SAID WORKS PROCU RED IN HIS NAME. THE WORK WAS ACTUALLY EXECUTED BY THE PARTNERSHIP FIRM AND THE INCOME HAS BEEN DECLARED IN THE NAME OF THE FIRM WHICH HAS SEPARATE ENTITY HAVING SEPARATE PAN AND USED TO FILE ITS RETURN OF INCOME ON REGULAR BASIS. AL L ALONG THE CREDIT OF THE TDS CERTIFICATES ISSUED IN THE NAME OF INDIVIDUAL SRI AMAL CHANDRA ROY WAS GIVEN BY THE INCOME TAX AUTHORITY IN THE NAME OF THE FIRM O N THE BASIS OF CBDTS INSTRUCTION NO.619 DATED 25.09.1973 SINCE INCEPTIO N OF THE FIRM. THAT THE LD. APPELLATE AUTHORITY IS WRONG IN REJECTING THE CLAI M THE TDS CREDIT IN THE NAME OF THE FIRM BY IGNORING THE SAID CBDTS INSTRUCTION A S STATED ABOVE. ITA 184/K/2011 M/S. AMAL CHANDRA ROY ASSESSMENT YEA R 05-06 2 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE FIRM M/S. AMAL CHANDRA ROY IS ENGAGED IN THE CONTRACT WORK AND DIS CLOSED NET PROFIT AT RS.40,596/-. THE ASSESSING OFFICER ISSUED NOTICE U/S 143(2) AND ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 31.12.2008, THEREBY CERTAIN ADDITI ONS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE. THIS IS NOT IN CHALLENGE BEFORE US, BUT THE ASSESSING OFFICER HAS NOT ALLOWED CREDIT FOR TDS AMOUNTING TO RS.1,70,573/- O N THE GROUND THAT THE TDS CERTIFICATES WERE ISSUED IN THE NAME OF SRI AMAL CH ANDRA ROY, A RAILWAY CONTRACTOR, IN HIS INDIVIDUAL CAPACITY BUT CREDIT WAS CLAIMED IN T HE NAME OF ASSESSEE FIRM M/S. AMAL CHANDRA ROY ASSESSED UNDER PAN-AAIFA 7092 G, WHEREA S THE PAN OF ASSESSEE IS AEOPR 7156 L. THE ASSESSEE MOVED AN APPLICATION U/ S. 154 OF THE ACT FOR RECTIFICATION OF MISTAKE BEING APPARENT FROM RECORD VIDE DATED 29 .6.2007. THE ASSESSING OFFICER VIDE RECTIFICATION ORDER U/S. 154 OF THE ACT DATED 16.7.2007 REJECTED THE CLAIM OF THE ASSESSEE BY STATING THAT TDS HAS BEEN DEDUCTED AND DEPOSITED BY THE PAYEE AGAINST THE PAN-AEOPR7156L AND CREDIT CAN BE GIVEN ONLY IN THE SAME ACCOUNT AND NOT AGAINST ANY OTHER PAN AS CLAIMED BY THE ASSESSEE I.E. AAIFA 7092G. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND DISMISSED T HE APPEAL OF ASSESSEE BY GIVING FOLLOWI NG FINDINGS: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. AR OF THE ASSESSEE AND ALSO PERUSED THE RECTIFICATION ORDER. ADMITTEDLY, SRI AMAL CHANDRA ROY WAS BEING ASSESSED SEPARATELY UNDER PAN AEOPR 7156 L A ND THE FIRM, M/S. AMAL CHANDRA ROY WAS BEING ASSESSED UNDER PAN AAIFA 709 2 G. THE INCOME WAS DECLARED IN THE NAME OF THE FIRM THROUGH THE CONT RACT WAS AWARDED IN THE NAME OF THE INDIVIDUAL. AS PER THE TEXT OF THE INSTRUC TION WAS REFERRED TO BY THE AR OF THE ASSESSEE, UNDER SIMILAR CIRCUMSTANCES, CREDIT OF TDS CAN BE GIVEN TO THE FIRM. BUT WHEN THIS INSTRUCTION WAS ISSUED, THE CONCEPT OF PAN WAS NOT THERE. AS PER THE PRESENT LAW AND PROCEDURE, THE TAX DEDUCTOR HA S TO DEDUCT TAX AT SOURCE AND FILE THE TDS RETURN MENTIONING THE PAN OF THE DEDUCTEE AND AT THE TIME OF GIVING CREDIT, THIS PAN IS MATCHED. IF TH E DEDUCTEES PAN IS NOT MATCHED, CREDIT CANNOT BE GIVEN. PAN BECOME THE SOLE CRITE RIA FOR IDENTIFICATION OF THE DEDUCTEE. FROM THIS POINT OF VIEW, THE AFORESAID INSTRUCTION HAS LOST ITS RELEVANCE. UNDER THE CIRCUMSTANCES, SINCE THE WORKS ORDER WAS AWARDED AND TDS WAS DEPOSITED AND CERTIFICATES ISSUED IN THE NAME OF T HE INDIVIDUAL SRI AMAL CHANDRA ROY, NOT IN THE NAME OF M/S. AMAL CHANDRA ROY, TDS CREDIT CANNOT BE GIVEN IN CASE OF THE ASSESSEE FIRM. TH E A.O. HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE. HIS ACTION IS CONFIRMED. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE TRIBUNA L. ITA 184/K/2011 M/S. AMAL CHANDRA ROY ASSESSMENT YEA R 05-06 3 4. I HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE FIRM M/S. AMAL CHANDA ROY HAS DISCLOSED THE PROFIT, ON THE TURNOVER ON WHICH THE TDS HAS BEEN DEDUCTED BY NORTH EAST RAILWAYS, THE ASSESSEE BEING A RAILWAY CONTRACTOR. ONLY DISPUTE REMAINS IS THAT THIS TDS CERTIFICATE STATES THE PAN OF INDIVIDUAL SRI AM AL CHANDRA ROY AND NOT THAT OF THE FIRM. THIS COULD HAVE BEEN VERIFIED BY THE ASSESSI NG OFFICER FROM THE DEDUCTOR OF TDS I.E. NORTH EAST RAILWAYS, WHICH THE ASSESSING OFFIC ER HAS NOT CHOSEN TO. I AM OF THE VIEW THAT THIS BEING A MISTAKE APPARENT FROM RECORD , THE ASSESSING OFFICER SHOULD HAVE ALLOWED THE CREDIT FOR TDS AS ALLOWED TO THE ASSESE E IN EARLIER YEARS AND SUBSEQUENT YEARS. LD. COUNSEL FOR THE ASSESSEE HAD CATEGORICA LLY STATED THAT REVENUE HAS ALLOWED CREDIT OF TDS IN SIMILAR CIRCUMSTANCES IN EARLIER Y EARS AND IN SUBSEQUENT YEARS AND FOR THE SAKE OF CONSISTENCY THE CREDIT FOR THIS YEAR SH OULD HAVE BEEN ALLOWED. I ACCORDINGLY DIRECT THE ASSESSING OFFICER TO ALLOW THE CREDIT AF TER VERIFICATION FROM THE RAILWAYS, WHETHER THE PAYMENTS ARE MADE TO THE FIRM OR INDIVI DUAL. IN CASE THE PAYMENTS ARE MADE TO FIRM AND DUE TO MISTAKE THIS PAN OF INDIVIDUAL I S MENTIONED IN THE TDS CERTIFICATES, TDS CREDIT TO THE FIRM CANNOT BE DISALLOWED AND EVE N THE SHOULD DIRECT TO DEDUCTOR TO CARRY OUT RECTIFICATION IN THEIR RECORDS ALSO. ACC ORDINGLY, I DIRECT THE ASSESSING OFFICER TO ALLOW THE CREDIT OF TDS AFTER VERIFICATION FROM RAILWAY AUTHORITIES I.E. THE DEDUCTOR. APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AS INDICATED ABOVE. 6. ORDER PRONOUNCED IN OPEN COURT ON 14 TH DAY OF MARCH, 2011. SD/- , (MAHAVIR SINGH) JUDIC IAL MEMBER ( *+ *+ *+ *+) )) ) DATED 14 TH DAY OF MARCH, 2011 ,- ./ 0 JD.(SR.P.S.) ITA 184/K/2011 M/S. AMAL CHANDRA ROY ASSESSMENT YEA R 05-06 4 () 1 &2 3(2!4- COPY OF THE ORDER FORWARDED TO: 1 . $% / APPELLANT M/S. AMAL CHANDRA ROY, WEST JITPUR, POS T BHOLARDABRI, DIST. ALIPURDUAR. 2 &'$% / RESPONDENT, ITO, WARD-1, ALIPURDUAR 3 . ) / THE CIT(A), JALPAIGURI 4. ) ( )/ CIT, JALPAIGURI 5 . ;< & / DR, KOLKATA BENCHES, KOLKATA '2 &/ TRUE COPY, ()=/ BY ORDER, / /ASSTT. REGISTRAR .