M/s Sri Godavari Transports, Dowlaiswaram V. The Addl. CIT, Rajahmundry Range, Rajahmundry

ITA 191/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56799 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH LUCAS PETER
• Section: 143(3); 194C; 263

Judgement Text

ITA NO.191 OF 2011 SRI GODAVARI TRANSPORTS DOWLAISW ARAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS.191/VIZAG/2011 ASSESSMENT YEAR: 200 7 - 08 SRI GODAVARI TRANSPORTS, DOWLAISWARAM VS. ADDL. CIT RAJAHMUNDRY (APPELLANT) PAN NO.AAEFS 2934 H (RESPONDENT) APPELLANT BY: SHRI G.V.N. HARI, CA RESPONDENT BY: TH. LUCAS PETER, CIT (DR) DATE OF HEARING: 26-07-2011 DATE OF PRONOUNCEMENT: 23-08-2011 ORDER PER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21.03.2011 PASSED BY THE LD CIT RAJAHMUNDRY U/S 263 OF THE ACT. THE ASSESSEE IS CHALLENGING THE VALIDITY OF SAID ORDER. 2. THE LD CIT SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DIRECTED HIM TO RE-FRAME THE ASSESSMENT ORDER AFTER CONSIDERING THE FOLLOWING ISSUES: (A) DISALLOWANCE U/S 40(A)(IA) FOR NON DEDUCTION OF TAX AT SOURCE ON HIRE CHARGES PAID TO VARIOUS VEHICLE OWNERS. (B) EXAMINATION OF CLAIM OF BOTTLE BREAKAGES (C) EXAMINATION OF TDS CLAIMS MADE BY THE ASSESSEE VIS- A-VIS TOTAL TRANSPORT RECEIPTS. 3. THE FACTS RELATING TO THE ABOVE SAID ISSUES ARE STATED IN BRIEF. THE ASSESSEE FIRM IS IN THE BUSINESS OF UNDERTAKING TRA NSPORT CONTRACT WORKS. THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLE TED U/S 143(3) OF THE ACT BY ACCEPTING THE INCOME RETURNED BY THE ASSESSEE. S UBSEQUENTLY THE LD CIT INITIATED REVISION PROCEEDING U/S 263 OF THE ACT, A S HE WAS OF THE VIEW THAT THE ASSESSING OFFICER DID NOT EXAMINE THE ISSUES CITED IN THE PRECEDING PARAGRAPH IN ITA NO.191 OF 2011 SRI GODAVARI TRANSPORTS DOWLAISW ARAM PAGE 2 OF 4 A PROPER MANNER, WHICH HAS RENDERED THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDI NGLY HE SET ASIDE THE ASSESSMENT ORDER. AGGRIEVED, THE ASSESSEE IS IN APP EAL BEFORE US. 4. THE FIRST ISSUE RELATES TO THE REQUIREMENT OF IN VOKING THE PROVISIONS OF 40(A)(IA) IN THE HANDS OF THE ASSESSEE IN RESPECT O F HIRE CHARGES PAID BY IT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE P AID A SUM OF ` 1,10,98,466/- AS LORRY HIRE CHARGES. THE ASSESSEE DID NOT DEDUCT THE TDS ON THE SAID PAYMENTS ON THE GROUND THAT THE CONCERNED RECIPIENTS HAVE FU RNISHED FORM NO.15I TO THE ASSESSEE, IN WHICH CASE, THE ASSESSEE IS NOT REQUIR ED TO DEDUCT TAX AT SOURCE. IT IS RELEVANT TO NOTE HERE THAT, AS PER THE SECOND PR OVISO TO SEC. 194C(3) OF THE ACT, THE TDS UNDER SECTION 194C OF THE ACT IS NOT R EQUIRED TO BE DEDUCTED, IF THE RECIPIENT SUB-CONTRACTOR FULFILLING THE CONDITIONS PRESCRIBED THEREIN FURNISHES A DECLARATION IN FORM NO.15I TO THE ASSESSEE. THE TH IRD PROVISO TO SEC. 194C(3) FURTHER PROVIDES THAT THE ASSESSEE SHOULD IN TURN, FURNISH THE DETAILS OF FORM 15I RECEIVED BY HIM IN SUCH FORM AND WITHIN SUCH TIME A S MAY BE PRESCRIBED. THE INCOME TAX RULES HAVE PROVIDED THAT THE ASSESSEE SHA LL FILE THE SAID DETAILS IN FORM NO.15J TO THE COMMISSIONER OF INCOME TAX ON OR BEFORE 30 TH JUNE OF THE FOLLOWING FINANCIAL YEAR. HOWEVER, IN THE INSTANT CASE THE ASSESSEE FILED THE FORM NO.15J TO THE COMMISSIONER OF INCOME TAX ONLY O N 23.10.2007. SINCE THERE WAS DELAY IN FILING THE SAID FORM NO.15J, THE LD CIT HAS OPINED THAT THE ASSESSING OFFICER SHOULD HAVE DISALLOWED THE LORRY HIRE CHARGES U/S 40(A)(IA) OF THE ACT. 4.1 WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE RECIPIENT SUB-CONT RACTORS HAVE DULY FILED FORM NO.15I TO THE ASSESSEE HEREIN AND HENCE, ON THE STRE NGTH OF THE SAID DECLARATIONS, NO TAX WAS DEDUCTED AT SOURCE ON THE SAID PAYMENTS EFFECTED BY THE ASSESSEE. THE THIRD PROVISO TO SEC. 194C(3) OF THE ACT READ WITH RELEVANT RULES IMPOSES A FURTHER RESPONSIBILITY UPON THE ASS ESSEE TO FILE THE DETAILS OF SUCH DECLARATIONS IN FORM NO.15J TO THE LEARNED CIT BEFO RE 30 TH JUNE OF THE FOLLOWING FINANCIAL YEAR. NOW THE QUESTION THAT ARISES IS WH ETHER THE EXEMPTION GIVEN UNDER SECOND PROVISO TO SECTION 194C(3) FROM DEDUCT ION OF TDS SHALL BECOME INOPERATIVE IF THERE IS DELAY IN FILING THE FORM PR ESCRIBED UNDER THE THIRD PROVISO ITA NO.191 OF 2011 SRI GODAVARI TRANSPORTS DOWLAISW ARAM PAGE 3 OF 4 TO THE SAID SECTION WITHIN DUE DATE. ON A CAREFUL READING OF BOTH THE PROVISOS, WE NOTICE THAT BOTH THE PROVISOS OPERATE INDEPENDEN TLY. HENCE, THE DELAY IN FILING THE FORM NO.15J PRESCRIBED UNDER THE RULES F OR THE THIRD PROVISO, IN OUR VIEW, WOULD NOT DISENTITLE THE VALIDITY OF DECLARAT IONS FILED IN FORM NO.15I UNDER THE SECOND PROVISO. EVEN OTHERWISE, THE SAID ISSUE IS A DEBATABLE ONE AND HENCE THE REVISION PROCEEDING UNDER SECTION 263 OF THE AC T WOULD NOT LIE UPON THE SAME. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARN ED CIT ON THIS ISSUE. 5. THE NEXT ISSUE RELATES TO CLAIM OF BOTTLE BR EAKAGES. THE LEARNED A.R BROUGHT TO OUR NOTICE THAT THE ASSESSEE HAD MADE ID ENTICAL CLAIMS TOWARDS BOTTLE BREAKAGES IN EARLIER YEARS. THE DISALLOWANCE MADE B Y THE ASSESSING OFFICER ON SUCH CLAIMS WAS CARRIED TO THE ITAT AND THE TRIBUNA L HAS ALLOWED THE CLAIM OF THE ASSESSEE TOWARDS BOTTLE BREAKAGES. ACCORDINGLY IT WAS SUBMITTED THAT THE IMPUGNED ISSUE IS A COVERED ISSUE. IN SUPPORT OF H IS CONTENTIONS, THE LEARNED A.R INVITED OUR ATTENTION TO THE ORDER DATED 12-6-2 008 PASSED BY THE ITAT, VISAKHAPATNAM IN THE ASSESSEES OWN CASE FOR THE AS SESSMENT YEAR 2000-2001 IN ITA NO.426/VIZAG/2003. THE SAID ORDER OF THE ITAT IS PLACED IN THE PAPER BOOK COMPILED BY THE ASSESSEE IN PAGE NUMBERS 5 TO 7. 5.1 WE HAVE GONE THROUGH THE SAID ORDER AND NOT ICE THAT THE ISSUE OF CLAIM TOWARDS BOTTLE BREAKAGES HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT. SINCE THE VIEW TAKEN BY THE ASSESSING OFFICE R ON THIS CLAIM IS IN TUNE WITH THE DECISION OF ITAT, THE SAID VIEW SHOULD BE TAKEN AS A PLAUSIBLE VIEW AND HENCE THE REVISION PROCEEDING UNDER SECTION 263 OF THE ACT DOES NOT LIE UPON THE SAME. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARN ED CIT ON THIS ISSUE ALSO. 6. THE NEXT ISSUE RELATES TO THE TDS CLAIMS MADE BY THE ASSESSEE. THE ASSESSEE HAD DECLARED GROSS RECEIPTS OF ` 5.98 CRORES. HOWEVER, THE AGGREGATE AMOUNT OF CONTRACT RECEIPTS SHOWN IN THE TDS CERTIF ICATES FURNISHED BY THE ASSESSEE WORKED OUT TO ONLY ` 1.99 CRORES. ACCORDINGLY, THE LEARNED CIT OPINED THAT THE ASSESSING OFFICER SHOULD HAVE EXAMINED THE ASPECT OF NON-DEDUCTION OF TDS ON THE BALANCE AMOUNT OF ` 3.99 CRORES. THE LEARNED A.R SUBMITTED THAT THE ASSESSEE CANNOT BE MADE LIABLE FOR NON-DEDUCTIO N OF TDS BY THE PERSONS ITA NO.191 OF 2011 SRI GODAVARI TRANSPORTS DOWLAISW ARAM PAGE 4 OF 4 WHO PAID THE TRANSPORT CHARGES TO THE ASSESSEE. HE FURTHER SUBMITTED THAT SUCH NON-DEDUCTION OF TDS WOULD NOT AFFECT THE TOTAL INC OME RETURNED BY THE ASSESSEE AND ACCORDINGLY HE CONTENDED THAT THE ASSESSMENT OR DER CANNOT BE SAID TO BE ERRONEOUS ON THIS ISSUE. 6.1 WE FIND FORCE IN THE SUBMISSIONS MADE BY TH E ASSESSEE. THE LEARNED CIT DID NOT FIND ANY ERROR OR FAULT WITH REGARD TO THE GROSS RECEIPTS DECLARED BY THE ASSESSEE. THERE CANNOT BE ANY DOUBT THAT THE RESPO NSIBILITY TO DEDUCT TDS LIES UPON THE PERSON WHO MAKES PAYMENT. IF THERE IS DEFA ULT ON THE PART OF THE PERSON WHO MAKES THE PAYMENT, THE SAID DEFAULT WOUL D NOT AFFECT THE COMPUTATION OF INCOME OF THE RECIPIENT. THE ASSESS EE HEREIN IS A RECIPIENT AND THE ACT NO WHERE PROVIDES ANY LIABILITY IN THIS REG ARD UPON THE RECIPIENT. AS CONTENDED BY THE LEARNED A.R, THE ASSESSMENT ORDER CANNOT BE TERMED AS ERRONEOUS ON THIS COUNT ALONE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT ON THIS ISSUE ALSO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE:23-08-2011 COPY TO 1 M/S SRI GODAVARI TRANSPORTS, 4-423/4 KALIKRISHNA NAGAR, DOWLESWARAM 533125, EAST GODAVARI DISTT. 2 THE ADDITIONAL COMMISSIONER OF INCOME TAX, RAJAHM UNDRY RANGE, RAJAHMUNDRY 3 THE CIT RAJAHMUNDRY 4 THE DR, ITAT, VISAKHAPATNAM. 5 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM