ACIT, CHENNAI V. Indo Asia Energy Private Limited, CHENNAI

ITA 1986/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7196 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 21-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN IRS
• Assessee Lawyers: T BANUSEKAR
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . . ! , ' !# $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1986/MDS/2014 AND C.O. NO.121/MDS/2014. ( / ASSESSMENT YEAR : 2006-2007) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(3), CHENNAI 600 034. ( %& /APPELLANT) VS M/S. INDO ASIA ENERGY PRIVATE LIMITED, NO.14, PADMANABHAN STREET, T. NAGAR, CHENNAI 600 017. [PAN:AABCI 3998R] ( '(%& /RESPONDENT/CROSS OBJECTOR) / APPELLANT BY : SHRI. N. MADHAVAN, IRS, JCIT. / RESPONDENT BY : SHRI. T. BANUSEKAR, C.A. /DATE OF HEARING : 28.10.2014. /DATE OF PRONOUNCEMENT : 11.11.2014. !) / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES C ROSS OBJECTIONS FOR ASSESSMENT YEAR 2006-07; EMANATE FROM ORDER DATED 1 3.01.2014 I.T.A.NO.1986/MDS/2014 & C.O. NO.121/MDS/2014. :- 2 -: PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- II, CHENNAI IN ITA NO.447/2013-14 DELETING DISALLOWANCE U/S.40(A)( IA) OF F.1,76,75,873/- IN PROCEEDINGS U/S. 143(3) RWS 147 OF THE INCOME TAX ACT [IN SHORT THE ACT]. 2. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE CHALLENGE S THE CIT(A)S ORDER DELETING THE AFORESAID DISALLOWANCE. THE ASSESSEES CROSS-OBJECTIONS PREFERRED AFTER A DELAY OF 56 DAY S ASSAIL ONLY A PORTION OF THE LOWER APPELLATE ORDER REJECTING ITS CONTENTIONS ON PAID AND PAYABLE ISSUE BASED ON THE SPECIAL BENCH DECI SION IN M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT 16 ITR (TRIB ) (1). IT HAS ALSO FILED AN AFFIDAVIT DATED 24.10.2014 SUPPORTING REAS ONS STATED IN CONDONATION PETITION. THE REVENUE DOES NOT DISPUTE THE CONTENTS THEREOF VERY SERIOUSLY. THUS, WE ACCEPT THE CONDONA TION PETITION AND ADMIT THE ASSESSEES CROSS-OBJECTIONS FOR HEARING. 3. FACTS OF THE CASE ARE IN A VERY NARROW COMPASS. TH E ASSESSEE COMPANY TRADES IN NON-COKING COAL. IT HAD FILED IT S RETURN ON 03.11.2006 ADMITTING A LOSS OF F18,89,986/-. THE SA ME WAS SUMMARILY PROCESSED. I.T.A.NO.1986/MDS/2014 & C.O. NO.121/MDS/2014. :- 3 -: 4. THE ASSESSEE HAD MADE CONTRACTUAL PAYMENTS AND ALSO DEDUCTED TDS THEREUPON IN THE RELEVANT PREVIOUS YEA R. HOWEVER, THIS TDS STOOD REMITTED IN GOVERNMENT ACCOUNT ONLY ON 28 .04.2006. THE ASSESSING OFFICER ISSUED SECTION 148 NOTICE DATED 2 4.04.2009 AND FRAMED RE-ASSESSMENT ON 03.12.2010. HE REJECTED THE ASSESSEES PLEA THAT SECTION 40(A)(IA) COULD NOT BE INVOKED AS PER AMENDMENT MADE THEREIN BY THE FINANCE ACT, 2010 WHICH WOULD A PPLY RETROSPECTIVELY AND TREATED THE SAME AS ONLY PROSPE CTIVELY APPLICABLE W.E.F 01.04.2010. THIS RESULTED IN THE IMPUGNED DI SALLOWANCE/ADDITION F.1,76,75,873/-. 5. THE ASSESSEE PREFERRED AN APPEAL. IT CHALLENGED A FORESAID DISALLOWANCE ON TWO GROUNDS I.E SECTION 40(A)(IA) C OULD NOT HAVE BEEN INVOKED QUA SUMS ALREADY PAID ON 31.03.2006 AS PE R THE SPECIAL BENCH DECISION (SUPRA) AND ALSO THAT THE AFORESAID AMENDMENT HAD TO BE APPLIED RETROSPECTIVELY. THE CIT(A) HAS TURNED D OWN THE FORMER PLEA AND ACCEPTED THE LATTER ONE. HE HAS DELETED D ISALLOWANCE BY HOLDING THE AFORESAID AMENDMENT AS REMEDIAL AND CUR ATIVE IN NATURE TO BE APPLIED RETROSPECTIVELY. THEREFORE, THE REVENUE IS IN APPEAL AND THE ASSESSE E HAS FILED ITS CROSS-OBJECTIONS. I.T.A.NO.1986/MDS/2014 & C.O. NO.121/MDS/2014. :- 4 -: 6. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THERE IS NO DISPUTE IN THE FACTS NARRATED HEREIN ABOVE. THE REVENUES ONLY ENDEAVOR IS TO INTERPRET AMENDMENT IN THE FINANCE ACT, 2010 TO SECTION 40(A)(IA) FROM 01.04.2010 AS ONLY HAVING PR OSPECTIVE EFFECT. WE DISAGREE WITH THIS ARGUMENT. THE CIT(A) HAS QUO TED CASE LAW OF CIT VS. NARESH HUMAR (2013) 39 TAXMANN.COM 182 (DEL HI HIGH COURT) WHEREIN IT HAS BEEN HELD THAT EVEN IF AN ASSESSEE H AS DEDUCTED TDS IN THE RELEVANT PREVIOUS YEAR AND REMITTED IT BEFORE F ILING OF ITS RETURN, DISALLOWANCE U/S. 40(A)(IA) CANT BE MADE AND THE A BOVESTATED AMENDMENT HAS TO BE APPLIED WITH RETROSPECTIVE EFFE CT. THE TRIBUNAL IN CASE OF ACIT VS. SMT. VIMALA S. WARAD (2013) 37 TAXMANN.COM 209 (BANGALORE) AND RANA BUILDERS VS. ITO (2013) 142 IT D 205 (RAJKOT) HAS ALSO TAKEN THE SAME VIEW. IN THIS CASE, THE A SSESSEE HAS REMITTED THE TDS AMOUNT WELL BEFORE FILING OF ITS RETURN. IN THESE CIRCUMSTANCES, WE REJECT THE REVENUES GROUND AND A FFIRM THE CIT(A)S FINDINGS. HOWEVER, THE ASSESSING OFFICER SHALL BE AT LIBERTY TO CHARGE INTEREST, IF ANY AS PER LAW ARISING OUT OF THIS LAT E REMISSION OF TDS. THE ASSESSEES CROSS-OBJECTIONS HAVE BECOME INFRUCT UOUS. 7. THE REVENUES APPEAL IS DISMISSED AND THE ASSESSEE S CROSS OBJECTIONS ARE DISMISSED AS HAVING BEEN RENDERED INFRUCTUOUS. I.T.A.NO.1986/MDS/2014 & C.O. NO.121/MDS/2014. :- 5 -: 8. ORDER PRONOUNCED ON TUESDAY, THE 11TH OF N OVEMBER, 2014, AT CHENNAI. SD/- SD/- ( . . . ) (DR. O.K. NARAYANAN) / VICE PRESIDENT !!!!!!! ' . . ! ) (S.S. GODARA) ' !# / JUDICIAL MEMBER DATED:11TH NOVEMBER, 2014. K.V #$ %& '& /COPY TO: 1. ( APPELLANT 2. / RESPONDENT 3. ) ( )/CIT(A) 4. ) /CIT 5. &*+ , /DR 6. +- . /GF.