DCIT 2(1)(1), MUMBAI V. QUIKJET CARGO AIRLINES P. LTD, MUMBAI

ITA 1973/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9639 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI D T GARASIA, JUDICIAL MEMBER & SHRI N K PRADHAN, ACCOUNTANT MEMBER ITA NO.1973/MUM/2017 ASSESSMENT YEAR : 2012-13 DCIT 2(1)(1) MUMBAI VS. QUIKJET CARGO AIRLINES P LTD., 7 TH FLOOR, AFL HOUSE, LOK BHARATI COMPLEX, MAROL MAROSHI ROAD, ANDHERI (E), MUMBAI 400 059 PAN AAACA3497L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PURUSHOTTAM KUMAR RESPONDENT BY : SHRI NITESH JOSHI DATE OF HEARING : 1 4 .09 .2017 DATE OF PRONOUNCEMENT : 22 .0 9 .2017 O R D E R PER D T GARASIA, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)- 3, MUMBAI, DATED 27.12.2016, RELATING TO ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE U/ S 40(A)(I) DESPITE THE ASSESSEE NOT DEDUCTING THE TDS WITHIN THE TIME AND THAT THE AMENDMENT TO SECTION 40(A)(I) THROUGH FINANCE (NO.2 ) ACT, 2014 IS NOT RETROSPECTIVE. ITA NO.1973/MUM/2017 M/S.QUIKJET CARGO AIRLINES PVT. LTD 2 2. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASID E AND THAT OF THE, AO RESTORED. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER, ADDED AN AMOUNT OF ` .1,56,05,070/- IN RESPECT OF LEGAL AND PROFESSIONAL CHARGES PAID TO M/S. CARDINAL AVIATION SINGAPORE PVT LTD AND PART O F LEASE RENT PAID TO M/S FARNAIR SITZERLAND AG U/S. 4O(A)(AI), TO THE TOTAL INCOME OF THE ASSESSEE. WHEN THE MATTER WAS CARRIED BEFORE THE CIT(A), THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE OBSERVING AS UNDER: 6.3 THE APPELLANT FURTHER SUBMITTED THAT THE APPRO VAL OF RBI FOR MAKING PAYMENT TO THE NON-RESIDENT WAS RECEIVED IN NOVEMBER 2012 AND ON RECEIPT OF APPROVAL FROM RBI, THE APPEL LANT IMMEDIATELY PAID THE TDS IN THE MONTH OF NOVEMBER 2 012. IT IS A REASONABLE CAUSE FOR PAYMENT OF TDS LATE. THERE IS AN AMENDMENT IN SECTION 40(A)(I) OF THE ACT WHICH ENABLES A TAXP AYER TO PAY THE TDS IN RESPECT OF PAYMENT TO A NON-RESIDENT BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THIS AMENDMENT IS BROUGHT IN BY FINANCE (NO.2) ACT, 2014, WITH EFFECT FROM 1 ST APRIL 2015. CONSIDERING THE RATIONAL GIVEN IN THE MEMORANDUM TO THE FINANCE (NO.2) BILL, 2014, IT IS SUBMITTED THAT THE AMENDED PROVISION IS EFFECTIVE RETROSPECTIVELY. WITHOUT PREJUDICE, IT I S FURTHER STATED THAT OTHERWISE IT WOULD AMOUNT FOR DISCRIMINATION AND SU CH DISCRIMINATION HAS HELD TO BE NOT ALLOWABLE. THE P AYMENT OF TDS IS MADE BEFORE THE DUE DATE OF FILING THE RETURN OF IN COME FOR A.Y. 2012-13. IN VIEW OF THE ABOVE, IT IS SUBMITTED THA T THE AMOUNT OF ` .1,39,72,548/- BEING LEGAL AND PROFESSIONAL CHARGES PAID TO M.S CARDINAL AVIATION SINGAPORE P LTD BE ALLOWED AS DED UCTION IN A.Y. 2012-13. 6.4 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND FACTS OF THE CASE. THE APPELLANT HAS DEDUCTED THE TAX WI THIN THE TIME AND PAID THE SAME BEFORE THE DUE DATE FOR FILING RE TURN OF INCOME IN ITA NO.1973/MUM/2017 M/S.QUIKJET CARGO AIRLINES PVT. LTD 3 THE CASE OF NON-RESIDENT ASSESSEE. IN VIEW OF THE SAME, GROUND NO.1 IS ALLOWED. 3. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE P ARTIES. WE FIND THAT THE CIT(A) WHILE DELETING THE ADDITION HAS OBSERVED THAT THE ASSESSEE HAS IMMEDIATELY MADE PAYMENT OF TDS ON RECEIPT OF APPRO VAL FROM RBI FOR NON- RESIDENTS IN NOVEMBER 2012. IT IS A REASONABLE CAU SE FOR DELAY IN PAYMENT OF TDS. THERE IS AN AMENDMENT IN SECTION 40(A)(I) OF THE ACT WHICH ENABLES A TAXPAYER TO PAY THE TDS IN RESPECT OF PAYMENT TO A NON-RESIDENT BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THIS A MENDMENT IS BROUGHT IN BY FINANCE (NO.2) ACT, 2014, WITH EFFECT FROM 1 ST APRIL 2015. CONSIDERING THE RATIONAL GIVEN IN THE MEMORANDUM TO THE FINANCE (NO .2) BILL, 2014, IT IS SUBMITTED THAT THE AMENDED PROVISION IS EFFECTIVE R ETROSPECTIVELY. THE PAYMENT OF TDS IS MADE BEFORE THE DUE DATE OF FILIN G THE RETURN OF INCOME. THEREFORE, THE CIT(A) HAS DELETED THE ADDITION. 4. THE LEARNED DR DID NOT BRING ANY CONTRARY FACTS BEFORE US. WE THEREFORE, ENDORSE THE ACTION OF THE CIT(A) AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF SEPTEMBER, 2017. SD/- SD/- (N K PRADHAN ) (D T GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 22 ND SEPTEMBER, 2017 SA ITA NO.1973/MUM/2017 M/S.QUIKJET CARGO AIRLINES PVT. LTD 4 COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, D BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI