Mahavir Adinath Salve, Solapur V. Assistant Commissioner of Income-tax,

ITA 20/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1010 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: V L JAIN
• Keywords: Opportunity of being heard; Additional evidence; Question of law; Non-deduction of tax; Revenue expenditure; Capital expenditure

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.20/PN/2014 '% % / ASSESSMENT YEAR : 2008-09 SHRI MAHAVIR ADINATH SALVE, H.NO.930, NAGANE PLOT, PARANDA ROAD, BARSHI, SOLAPUR. PAN NO. ARXPS5761N . / APPELLANT V/S ACIT, CIRCLE-2, SOLAPUR . / RESPONDENT / ASSESSEE BY : SHRI V.L. JAIN / RESPONDENT BY : SHRI B.C. MALAKAR / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01-11-2013 OF THE CIT(A)-III, PUNE RELATING TO ASS ESSMENT YEAR 2008-09. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTIO N MAINLY CARRYING ON DRAINAGE AND EXCAVATION WORKS FOR BSN L AND ALSO MAINTENANCE WORKS. HE FILED HIS RETURN OF INCOME ON 29 -09- 2008 DECLARING TOTAL INCOME OF RS.6,98,560/-. DURING THE COU RSE OF / DATE OF HEARING :09.09.2015 / DATE OF PRONOUNCEMENT:23.10.2015 2 ITA NO.20/PN/2014 ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSE E HAS PAID SUB CONTRACT CHARGES TO MACHINE OWNERS AMOUNTING TO RS.43,76,025/- ON WHICH NO TAX HAS BEEN DEDUCTED. HE TH EREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT SH OULD NOT BE DISALLOWED U/S.40(A)(IA) OF THE I.T. ACT SINCE THE ASSESSEE WH O IS LIABLE FOR DEDUCTION OF TAX ON THE PAYMENTS MADE TO SUB CO NTRACTORS HAS NOT DEDUCTED SUCH TAX FROM THE PAYMENTS MADE TO THEM. 3. THE ASSESSEE AND HIS AUTHORIZED REPRESENTATIVE APPE ARED BEFORE THE AO ON 21-12-2010 AND AGREED FOR THE ADDITIO N OF RS.43,76,025/- FOR NON DEDUCTION OF TAX AT SOURCE ON PAYM ENT TO SUB CONTRACTORS. IN VIEW OF THE ABOVE AND APPLYING THE PROVISIONS OF SECTION 40(A)(IA) THE AO DISALLOWED AN AMOUNT OF RS.43,76,025/ - TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT THE OUTSTANDING CR EDITORS AS ON 31-03-2008 IS RS.22,92,025/-. FURTHER, OUT OF THE T OTAL PAYMENTS MADE TO THE SUB CONTRACTORS AT RS.43,76,025/- , AS EXTRACTED BY THE AO IN THE ASSESSMENT ORDER, ONLY AN AMOUNT OF RS.17,75,165/- WAS OUTSTANDING AS ON 31-03-2008. IT WAS FURTHER SUBMITTED THAT IF THE OUTSTANDING PAYMENTS TO SUB CONTR ACTORS AS ON 31-03-2007 AND 31-03-2008 ARE COMPARED, THEN AN A MOUNT OF RS.5,10,084/- PERTAINS TO THE CREDITORS OUTSTANDING AS ON 31-03-2007. THEREFORE, THE NET CREDITORS OUTSTANDING A S ON 31-03- 2008 WAS ONLY TO THE EXTENT OF RS.12,65,081/-. RELYING O N VARIOUS DECISIONS IT WAS SUBMITTED THAT PROVISION OF SECTION 40(A)(IA) O F THE ACT IS ATTRACTED ONLY TO THE EXPENDITURE WHICH IS PAYA BLE AT THE END OF THE YEAR. THEREFORE, THE DISALLOWANCE, IF ANY, CAN AT BEST BE MADE ONLY IN RESPECT OF OUTSTANDING EXPENSES OF RS.12,65,0 81/- RELATING TO THIS YEAR. 3 ITA NO.20/PN/2014 5. IN HIS ALTERNATE CONTENTION IT WAS SUBMITTED THAT SINC E THE SUB CONTRACTORS HAD FURNISHED FORM 15G, THEREFORE, PROVIS IONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED. IN SUPPORT OF THE ABO VE PROPOSITION, THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS . REDIFF.COM INDIA LTD. REPORTED IN 141 TTJ 647. HOWEVER, SINC E THESE COPIES OF FORM 15G WERE NOT PRODUCED BEFORE THE AO, THE ASSESSEE REQUESTED FOR ADMISSION OF THE SAME AS ADDITION AL EVIDENCE UNDER RULE 46A OF THE I.T. RULES STATING THAT TH ERE WAS NO OCCASION TO PROVIDE THE SAME BEFORE THE AO. IT WAS SUB MITTED THAT EVEN IN THE TAX AUDIT REPORT ALSO NO CONTRAVENTION OF TH E TDS PROVISIONS WERE REPORTED. 6. HOWEVER, THE LD.CIT(A) ALSO WAS NOT CONVINCED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. SO FAR AS THE A RGUMENT OF THE ASSESSEE THAT PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS ATTRACTED ONLY IN RESPECT OF PAYMENT WHICH IS OUTSTAN DING OR PAYABLE AS AT THE END OF THE YEAR IS CONCERNED, THE LD.C IT(A) FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE C ASE OF CRESCENT EXPORT SYNDICATE REPORTED IN 85 CCH 056, THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SIKANDAR KHAN N. TUNWAR REPORTED IN TS 186 HC 2013 AND VARIOUS OTHER D ECISIONS REJECTED THE ARGUMENTS. 7. SO FAR AS THE ALTERNATE CLAIM OF THE ASSESSEE THAT RE SPECTIVE SUB-CONTRACTORS HAD FILED FORM 15G WITH THE ASSESSEE AU THORIZING NON-DEDUCTION OF TAX, THEREFORE, WHEN NO TAX WAS DEDUCTA BLE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED IS CONCERNE D, THE LD.CIT(A) REFUSED FOR ADMITTING ADDITIONAL EVIDENCES ON THE G ROUND THAT THE ASSESSEE HAS NOT EXPLAINED THE CIRCUMSTANCES WHICH 4 ITA NO.20/PN/2014 PREVENTED HIM FROM FURNISHING THE IMPUGNED DOCUMENTS BEFOR E THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS. FURTHER, THE ASSESSEE HAS NOT FURNISHED SUCH 15G FORMS BEFORE THE CIT BEFORE T HE 7 TH DAY OF THE MONTH NEXT FOLLOWING THE MONTH IN WHICH DECLARATION IS FURNISHED TO HIM. NO PROOF WAS FURNISHED TO SHOW THAT THE SAID DECLARATIONS WERE FORWARDED TO THE CIT CONCERNED WITHIN THE PRESCRIBED TIME. THE LD.CIT(A) FURTHER NOTED THAT WHEN THE ASSESSEE HAS AGREED FOR THE ADDITION BEFORE THE AO AT T HE TIME OF ASSESSMENT PROCEEDINGS, IT IS NOT PROPER FOR THE ASSESSE E TO CHALLENGE THE ADDITION IN APPEAL AS BY AGREEING THE SAID AD DITION THE ASSESSEE PREEMPTED THE AO FROM CONDUCTING FURTHER ENQUIRIES IN THIS REGARD. FOR THE ABOVE PROPOSITION, HE RELIED ON TH E DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RAMESHCHANDR A AND COMPANY VS. CIT REPORTED IN 168 ITR 375, THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF RAMANLAL KAMDAR VS. CIT REPORTED IN 108 ITR 73 AND THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF MAHESH B. SHAH VS. ACIT AND ANOTH ER REPORTED IN 238 ITR 130. HE ACCORDINGLY UPHELD THE ADD ITION MADE BY THE AO U/S.40(A)(IA) OF THE I.T. ACT. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING DISALLOWANCE OF RS.43,76,025/- BEING THE PAYMENT TO SU B-CONTRACTORS BY PROVISIONS OF SEC.40(A)(IA) OF THE I.T. ACT, 1961. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD.CIT(A) ER RED IN LAW AND ON FACTS IN NOT APPRECIATING THAT PROVISION OF SECTION 40(A)(IA) IS ATTRACTED ONLY IN RESPECT OF PAYMENTS WHICH IS ACTUALL Y PAYABLE AS AT THE END OF THE YEAR AND NOT WHICH IS PAID DURING THE YEAR. 3. THE LD.CIT(A) HAS FURTHER ERRED IN LAW AND ON FAC TS IN NOT ADMITTING THE COPIES OF FORM NO.15G AS ADDITIONAL EVI DENCE WITHIN THE MEANING OF RULE 46A OF THE I.T. RULES, 1962. 5 ITA NO.20/PN/2014 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL OR ADD TO THE SAME, IF DEEMED NECESSARY. 9. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE FOLLO WING DECISIONS SUBMITTED THAT PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY TO THE AMOUNTS PAYABLE AT THE END OF THE YEAR : 1. M/S. ARCADIA SHARE & STOCK BROKER PVT. LTD. VS. DC IT ITA NO.1871/MUM/2013 ORDER DATED 22-12-2014 2. CIT VS. M/S. VICTOR SHIPPING SERVICES PVT. LTD. I TA NO.122/2013 ORDER DATED 09-07-2013 3. ITO VS. M/S. THEEKATHIR PRESS ITA NO.2076/MAD/2012 ORDER DATED 18-09-2013 10. SO FAR AS NON ADMISSION OF ADDITIONAL EVIDENCES ARE CONCERNED THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. PRAB HAVATI S. SHAH VS. CIT REPORTED IN 231 ITR 1 SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE ADDITIONAL EVIDENCES FILED BEFORE HIM. 11. SO FAR AS THE OBSERVATION OF THE LD.CIT(A) THAT ASSE SSEE HAS AGREED BEFORE THE AO FOR THE ADDITION AND THEREFORE IT IS NOT PROPER FOR THE ASSESSEE TO CHALLENGE THE ADDITION IN APPEAL IS C ONCERNED THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NIRMALA L. MEHTA V S. CIT AND OTHERS REPORTED IN 269 ITR 1 AND SUBMITTED THAT T HERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. ARTICLE 265 OF THE CONSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDES THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQUIESCENCE CAN NOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE IS ENTITLED TO WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. 6 ITA NO.20/PN/2014 12. SO FAR AS THE VARIOUS DECISIONS RELIED ON BY THE LD.CI T(A) ARE CONCERNED HE SUBMITTED THAT THEY ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE CASE OF RAMESHCHANDRA AND COMPANY (SUPRA) RELIED ON BY THE LD.CI T(A) THERE WAS DISCREPANCY OF 360 BAGS OF OIL SEEDS AND OTHER ITEMS FOR WHICH ONE OF THE PARTNER APPEARED BEFORE THE AO AND EX PRESSED HIS INABILITY TO RECONCILE THE DISCREPANCY AND AGREED FOR THE A DDITION. IN THE AFOREMENTIONED CIRCUMSTANCES THE HONBLE HIGH COU RT HELD THAT WHERE AN ASSESSEE HAS MADE A STATEMENT OF FACT, HE COULD HAV E NO GRIEVANCE IF THE TAXING AUTHORITY TAXES HIM IN ACCORDAN CE WITH THAT STATEMENT. IF HE COULD HAVE NO GRIEVANCE HE COULD FILE NO APPEAL. 13. SIMILARLY, IN THE CASE OF RAMANLAL KAMDAR (SUPRA) IN THE ORIGINAL ASSESSMENT FOR A.YRS 2002-03 AND 2003-04 A MISTA KE HAD CREPT IN WHILE WORKING OUT INTEREST U/S.139(1)(III). THEREAFTER THE AO ISSUED A NOTICE TO THE ASSESSEE PROPOSING TO RECTIFY THE MISTAKE U/S.154 AND CALLING UPON THE OBJECTIONS OF THE ASSESSEE. THE MISTAKE WAS THAT INSTEAD OF TREATING THE ASSESSEE AS UN REGISTERED FIRM FOR THE PURPOSE OF CALCULATING THE INTEREST THE AO HAD TREATED IT AS A REGISTERED FIRM. ONE OF THE PARTNERS OF THE FIRM APPE ARED BEFORE THE AO AND STATED THAT HE HAD NO OBJECTION TO THE PROPOSED REVISION. ACCORDINGLY, THE AO PASSED THE ORDER U/S.154. T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE AAC WHO DISMISSE D THE APPEAL. ON FURTHER APPEAL BY THE ASSESSEE THE TRIBUNAL A LSO DISMISSED THE APPEAL. UNDER THESE CIRCUMSTANCES THE HON BLE HIGH COURT HELD THAT THE APPEALS TO THE AAC AND ITAT WERE INCOMPETEN T. 14. SIMILARLY, IN THE CASE OF MAHESH B. SHAH AND ANOTHER (SUPRA) THE ASSESSEE AS A MEMBER OF COCHIN STOCK EXCHANGE MA DE 7 ITA NO.20/PN/2014 CONTRIBUTIONS TO THE STOCK EXCHANGE FUNDS. THIS AMOUNT THOUGH CLAIMED BY THE ASSESSEE AS A REVENUE EXPENDITURE INCURR ED WHOLLY NECESSARILY AND EXCLUSIVELY FOR CARRYING ON BUSINESS WAS NOT ACCEPTED BY THE AO AND THE ASSESSSEE HIMSELF ULTIMATELY AGREED FOR TREATING THIS AMOUNT AS CAPITAL EXPENDITURE. ACCORDINGLY, THE SAID CONTRIBUTION AMOUNTING TO RS.1,07,461/- WAS ADDED TO THE ASSESSEES TOTAL INCOME FOR THE YEAR 1993-94. A SUM OF RS.42,539/- WAS ADDED ON THE SAME BASIS TO THE ASSESSEES TOTAL INCOME. THE ASSESSEE FILED A REVISION PETITION AGAINST THESE ORDERS. B EFORE THE CIT THE PETITIONER AGREED THAT THIS WAS A VOLUNTARY CONT RIBUTION TO A CAPITAL FUND AND COULD BE DISALLOWED AND ADDED BACK TO HIS INCOME. THE CIT IN REVISION U/S.264 OF THE I.T. ACT CONFIRMED THE O RDER OF THE ASSESSMENT FOR THE PERIOD 1992-93 AND 93-94. THE HONBLE KERALA HIGH COURT DISMISSED THE WRIT PETITION ON THE GROUN D THAT THE PETITIONER HAD AGREED TO TREAT THE EXPENDITURE AS A CAPITAL EXPENDITURE BOTH BEFORE THE AO AS WELL AS BEFORE THE REV ISIONAL AUTHORITY. NO EVIDENCE OR MATERIAL WAS FURNISHED TO SHOW THAT THE PETITIONER WAS COERCED TO MAKE A STATEMENT. NOTHING PR EVENTED THE PETITIONER TO RETRACT THE SAME. THE ALLEGATION OF COMPULS ION OR COERCION COULD NOT BE ACCEPTED ON A MERE STATEMENT. N O MATERIALS HAD BEEN FURNISHED TO SHOW BEFORE THE AUTHORITIES OR BEFO RE THE HIGH COURT TO ESTABLISH THAT THIS WAS A REVENUE EXPEND ITURE AND IT WAS EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF B USINESS. IT WAS ACCORDINGLY HELD THAT THERE WAS NO SCOPE OF INTE RFERENCE WITH THE ORDER OF THE CIT UNDER ARTICLE 226. HE ACCORDINGLY SUBMITTED THAT ALL THE DECISIONS RELIED ON BY THE LD.CIT(A) ARE DISTINGU ISHABLE ON FACTS AND NOT APPLICABLE TO PRESENT CASE. IN ANY CAS E, IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT THE ASSESSEE CAN RAISE THIS OBJECTION BEFORE THE CIT(A). 8 ITA NO.20/PN/2014 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED T HAT IN VIEW OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF VINAY ASHWINIKUMAR JONEJA VS. ITO VIDE ITA NO.1514/PN/201 2 ORDER DATED 22-10-2013 PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE TO THE AMOUNT CLAIMED AS EXPENDITURE DURING THE YEAR ON WHICH NO TAX HAS BEEN DEDUCTED. FURTHER, THERE WAS NO JUSTIFIABLE REASONS FOR FILING OF ADDITIONAL EVIDENCES BEFORE THE CIT(A). I N ANY CASE SINCE THE ASSESSEE HAS ACCEPTED BEFORE THE AO FOR ADDITION OF THE AMOUNT U/S.40(A)(IA) NO APPEAL LIES BEFORE THE LD.CIT(A). HE ACCORDINGLY SUBMITTED THAT THE GROUNDS RAISED BY THE A SSESSEE BE DISMISSED. 16. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO IN THE INSTANT CASE MADE ADDITION OF RS.43,76,025/- U/S.40(A)(IA) ON THE GROUN D THAT ASSESSEE HAS NOT DEDUCTED TAX ON THE PAYMENTS MADE TO THE SUB-CONTRACTORS AS THE AMOUNT OF PAYMENT EXCEEDED RS .20,000/- ON EACH AND EVERY INSTANCE AND FURTHER THE ASSESSEE ALSO ADMITTED BEFORE HIM FOR ADDITION OF THE SAME U/S.40(A)(IA). 17. WE FIND BEFORE THE CIT(A) THE ASSESSEE MADE 2 FOLD ARGUMENTS. THE FIRST LIMB OF THE ARGUMENT IS THAT THE DISA LLOWANCE U/S.40(A)(IA) SHOULD NOT EXCEED THE AMOUNT OF OUTSTANDING A S AT THE END OF THE YEAR WHICH IN THE INSTANT CASE IS RS.12,65, 081/-. THE SAME HAS BEEN ARRIVED AT BY THE ASSESSEE AFTER EX CLUDING THE AMOUNT OF RS.5,10,084/- PERTAINING TO THE CREDITORS OUTSTA NDING AS 9 ITA NO.20/PN/2014 ON 31-03-2007 FROM THE TOTAL OUTSTANDING CREDITORS OF RS.17,75,165/- AS ON 31-03-2008. 18. THE SECOND LIMB OF THE ARGUMENT IS THAT THE SUB-CON TRACTORS HAD FURNISHED FORM 15G FOR NO DEDUCTION OF TAX, THEREFORE, THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT ATTRACTED. 19. SO FAR AS THE FIRST LIMB OF ARGUMENT THAT THE LIABILITY U/S.40(A)(IA) IS RESTRICTED TO THE AMOUNT OUTSTANDING AT THE END OF THE YEAR IS CONCERNED, THE PUNE BENCHES OF THE TRIBUNAL FOLLOWING THE DECISION OF HONBLE CALCUTTA HIGH COURT AND HONBLE GU JARAT HIGH COURT ARE CONSISTENTLY TAKING THE VIEW THAT PROVISI ONS OF SECTION 40(A)(IA) ARE ATTRACTED TO THE WHOLE AMOUNT INCURRE D AS EXPENDITURE DURING THE YEAR ON WHICH NO TAX HAS BEEN D EDUCTED. THE SAME IS NOT RESTRICTED TO ONLY THE AMOUNT PAYABLE AT THE END OF THE YEAR. THEREFORE, THE FIRST LIMB OF THE ARGUMENT BY TH E LD. COUNSEL FOR THE ASSESSEE IS REJECTED. 20. SO FAR AS THE SECOND LIMB OF THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SUB CONTRACTORS HAVE FURNISH ED FORM 15G AND THEREFORE THERE IS NO LIABILITY TO DEDUCT TAX IS CONCER NED, WE FIND THE LD.CIT(A) DID NOT ACCEPT THE ADDITIONAL EVIDENCES FILED BEFORE HIM ON THE GROUND THAT ASSESSEE HAD NOT EXPLAINE D THE REASONS FOR NON FURNISHING OF THE SAME BEFORE THE AO. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S. SHAH (SUPRA) HAS OBSERVED AS UNDER : . . . . . . . . . . . . . . . . . . . . . . . ON A PLAIN READING OF RULE 46A, IT IS CLEAR THAT THI S RULE IS INTENDED TO PUT FETTERS ON THE RIGHT OF THE APPELLANT TO PRODUCE BEFORE THE APPELLATE ASSISTANT COMMISSIONER ANY EVIDENCE, WHETHER ORAL OR DOC UMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF THE 10 ITA NO.20/PN/2014 PROCEEDINGS BEFORE THE INCOME TAX OFFICER, EXCEPT IN THE CIRCUMSTANCES SET OUT THEREIN. IT DOES NOT DEAL WITH THE POWERS OF T HE APPELLATE ASSISTANT COMMISSIONER TO MAKE FURTHER ENQUIRY OR TO DIR ECT THE INCOME TAX OFFICER TO MAKE FURTHER ENQUIRY AND TO R EPORT THE RESULT OF THE SAME TO HIM. THIS POSITION HAS BEEN MADE CLEAR BY SU B RULE (4) WHICH SPECIFICALLY PROVIDES THAT THE RESTRICTIONS PLACE D ON THE PRODUCTION OF ADDITIONAL EVIDENCE BY THE APPELLANT WOULD NOT AFFECT THE POWERS OF THE APPELLATE ASSISTANT COMMIS SIONER TO CALL F OR THE PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF AN Y WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. UNDER SUB SECTION (4) OF SECTION 250 OF THE ACT, THE APPELLATE ASSISTANT COMMISSIONER IS E MPOWERED TO MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT OR TO DIREC T THE INCOME TAX OFFICER TO MAKE FURTHER INQUIRY AND TO REPORT THE R ESULT OF THE SAME TO HIM. SUB SECTION (5) OF SECTION 250 OF THE ACT EMPOWE RS THE APPELLATE ASSISTANT COMMISSIONER TO ALLOW THE APPELLANT, AT THE HE ARING OF THE APPEAL, TO GO INTO ANY GROUND OF APPEAL NOT SPECIFIE D IN THE GROUNDS OF APPEAL, ON HIS BEING SATISFIED THAT THE OMISSION OF THE GROUND FROM THE FORM OF APPEAL WAS NOT WILFUL. IT IS CLEAR FROM THE A BOVE PROVISIONS THAT THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER ARE MU CH WIDER THAN THE POWERS OF AN ORDINARY COURT OF APPEAL. THE SCOPE OF HIS POWERS IS COTERMINOUS WITH THAT OF THE INCOME TAX OFFI CER. HE CAN DO WHAT THE INCOME TAX OFFICER CAN DO. HE CAN ALSO DIR ECT THE INCOME TAX OFFICER TO DO WHAT HE FAILED TO DO. THE POWER CONFE RRED ON THE APPELLATE ASSISTANT COMMISSIONER UNDER SUB SECTION (4) OF SECTION 250 BEING A QUASI JUDICIAL POWER, IT IS INCUMBENT ON HIM TO EXERCISE THE SAME IF THE FACTS AND CIRCUMSTANCES JUSTIFY. IF THE APPE LLATE ASSISTANT COMMISSIONER FAILS TO EXERCISE HIS DISCRETION JUDICIALLY, AND ARBITRARILY REFUSES TO MAKE ENQUIRY IN A CASE WHERE THE FACTS AND C IRCUMSTANCES SO DEMAND, HIS ACTION WOULD BE OPEN FOR CORRECTION BY A HIGHER AUTHORITY. 21. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE JURISDIC TIONAL HIGH COURT WE ARE OF THE CONSIDERED OPINION THAT THE CIT (A) SHOULD NOT HAVE REJECTED THE ADDITIONAL EVIDENCES FILED BEFORE HIM. UNDER THESE CIRCUMSTANCES, WE RESTORE THIS ISSUE TO THE FILE OF T HE AO WITH A DIRECTION TO EXAMINE THE 15G FORMS SUBMITTED BY THE CONCERNED SUB-CONTRACTORS AND DECIDE THE ISSUE AS PER FACT AND LA W AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 22. SO FAR AS THE OBSERVATION OF LD.CIT(A) THAT THE ASSESSEE IS NOT ENTITLED TO PREFER AN APPEAL BEFORE HIM SINCE THE ASSESSE E HAS ADMITTED BEFORE THE AO FOR SUCH ADDITION U/S.40(A)(IA) IS CONCERNED, WE FIND THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF NIRMALA L. MEHTA (SUPRA) FOLLOWING THE DECISION OF THE HONBLE 11 ITA NO.20/PN/2014 SUPREME COURT IN THE CASE OF THE AMALGAMATED COALFIELD LTD . VS. THE JANAPADA SABHA, CHHINDWARA AIR 1961 SC 964 HAS HE LD THAT ACQUIESCENCE TO AN ILLEGAL TAX FOR A LONG TIME IS NOT A GROU ND FOR DENYING THE PARTY THE RELIEF THAT HE IS ENTITLED TO. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READS AS UNDER : IT WOULD BE, THUS, SEEN THAT THE INCOME-TAX FROM TH E PRIZE MONEY OF RS. 6,30,000 WAS DEDUCTED AS PER THE SIKKIM INCOME-TA X MANUAL, 1948, AND THE REMAINING AMOUNT OF THE PRIZE MONEY WAS PAID TO THE PETITIONER. THE PRIZE MONEY WAS WON BY THE PETITIONE R FROM THE LOTTERY FLOATED BY ONE OF THE STATES OF THE INDIAN UNION. TH E PETITIONER WON THE PRIZE MONEY WITHIN THE TERRITORY OF INDIA, THOUGH I N THE SAID TERRITORY A SPECIAL INCOME-TAX LAW, VIZ., SIKKIM TAX MANUAL, 194 8, WAS APPLICABLE. THE SAID PRIZE MONEY WON BY THE PETITIONER HAS BEEN C HARGED TO TAX AS PER THE LAW APPLICABLE IN THE SIKKIM STATE WHERE TH E PRIZE MONEY WAS WON. THE INCOME-TAX ACT, 1961, WAS NOT APPLICABLE A T THE RELEVANT TIME IN SIKKIM. SO LONG AS THE INCOME-TAX ACT, 1961, DID NOT BECOME APPLICABLE TO THE STATE OF SIKKIM, INCOME-TAX ACT, 1961, COULD NOT BE APPLIED TO THE INCOME EARNED IN SIKKIM. IN THE CIRC UMSTANCES, WE HAVE NO HESITATION IN HOLDING THAT THE PRIZE MONEY WON BY THE PETITIONER FROM THE LOTTERY OF THE GOVERNMENT OF SIKKIM COULD HAVE BEEN CHARGED TO TAX ONLY IN ACCORDANCE WITH THEN EXISTING INCOME- TAX LAWS IN THE STATE OF SIKKIM AND COULD NOT BE CHARGED TO TAX UND ER THE INCOME-TAX ACT, 1961. THE PROBLEM AROSE BECAUSE THE PETITIONER IN HER RETUR N FOR THE ASSESSMENT YEAR 1988-89 FILED ON JUNE 30, 1988, OFFERED THE PRIZE MONEY OF THE LOTTERY TO TAX RATHER A FUNDAMENTAL ER ROR OF LAW ON THE PART OF THE ASSESSEE, BUT THAT ERROR OF LAW ONCE DETECT ED BY THE PETITIONER, IT WAS URGED BEFORE THE COMMISSIONER OF IN COME-TAX THAT THE PRIZE MONEY EARNED BY THE PETITIONER COULD NOT BE TAXED UNDER THE INCOME-TAX ACT, 1961. IT IS TRUE THAT IT WAS AT A LAT ER STAGE THAT SUCH CONTENTION WAS RAISED BY THE PETITIONER, BUT THE SAID CONTENTION WAS A PURE QUESTION OF LAW AND THE COMMISSIONER OF INCOME-TA X OUGHT TO HAVE CONSIDERED THE SAID CONTENTION ON ITS MERITS AND O UGHT NOT TO HAVE DECLINED TO ENTERTAIN IT ON THE GROUND OF DELA Y. THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE, ARTICLE 265 OF THE C ONSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDES THAT NO TAX SHALL BE LE VIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQUIESCENCE CANNOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE IS ENTITLED TO WHERE THE TA X IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. THE CONSTITUTION BENCH OF THE SUPREME COURT IN AMALG AMATED COALFIELDS LTD. V. JANAPADA SABHA, AIR 1961 SC 964, HELD THUS (PAGE 965) : 'IT MAY BE STATED AT THE OUTSET THAT THE TAX NOW IMPU GNED HAS BEEN IMPOSED BY THE LOCAL AUTHORITY FROM MARCH 12, 1935, AND THAT THE FIRST OCCASION WHEN ITS VALIDITY WAS ATTACKED WAS IN ONLY 19 57, THOUGH IF THE PETITIONERS ARE RIGHT IN THEIR SUBMISSIONS THEIR ACQUIESC ENCE MIGHT NOT ITSELF BE A GROUND FOR DENYING THEM RELIEF. BEFORE H OWEVER WE SET OUT THE POINTS URGED BY THE LEARNED ATTORNEY-GENERAL IN SUPPORT OF THE 12 ITA NO.20/PN/2014 PETITION, IT WOULD BE CONVENIENT IF WE NARRATE BRIE FLY THE HISTORY OF THE LEVY OF THIS TAX.' THE SUPREME COURT, THUS, HELD THAT ACQUIESCENCE TO AN ILLEGAL TAX FOR A LONG TIME IS NOT A GROUND FOR DENYING THE PARTY THE RELIEF THAT HE IS ENTITLED TO. IN THE INSTANT CASE, THEREFORE, IT MAY B E HELD THAT MERELY BECAUSE THE PETITIONER OFFERED THE PRIZE MONEY WON I N THE LOTTERY OF THE SIKKIM GOVERNMENT, TO TAX UNDER THE INCOME-TAX ACT, 1961, THAT SHALL NOT TAKE AWAY HER RIGHT IN CONTENDING THAT THE SAID PRIZE MONEY WAS NOT CHARGEABLE AND ASSESSABLE TO TAX UNDER THE INCOM E-TAX ACT IN THE REVISIONAL JURISDICTION. THE SAID PRIZE MONEY WAS C HARGEABLE TO INCOME-TAX UNDER THE SIKKIM TAX MANUAL THAT HELD TH E FIELD AT THE RELEVANT TIME AND THE INCOME-TAX FROM THE PRIZE MON EY AS PER THE THEN EXISTING SIKKIM INCOME-TAX MANUAL WAS DEDUCTED. THE ORDER DATED JUNE 25, 1991, PASSED BY THE COMMISSION ER OF INCOME-TAX, BOMBAY CITY IV, BOMBAY, THEREFORE, CANN OT BE SUSTAINED AND IN THE LIGHT OF WHAT WE HAVE OBSERVED ABOVE, THE ASSESSMENT ORDER DATED NOVEMBER 29, 1989, FOR THE ASSESSMENT YEAR 1988-8 9 SHALL HAVE TO BE REWORKED OUT AS PER THIS ORDER. CONSEQUENTLY, THE WRIT PETITION IS ALLOWED. THE ASSESSMEN T ORDER DATED NOVEMBER 29, 1989, (EXHIBIT B) AND REVISIONAL ORDER DATED JUNE 25, 1991, (EXHIBIT F) ARE QUASHED AND SET ASIDE. RESPONDENT NO. 2 OR THE SUCCESSOR-ASSESSING OFFICER HAVING JURISDICTION IN THE MATT ER IS DIRECTED TO WORK OUT THE PETITIONER'S ASSESSMENT FOR TH E ASSESSMENT YEAR 1988-89 AFRESH AS PER THIS ORDER. SINCE THE RESPONDENTS HAVE NOT CHOSEN TO APPEAR, NO OR DER AS TO COSTS. 23. WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE C ASE OF VALIBHAI KHANBHAI MANKAD VS. DCIT VIDE ITA NO.2228/AHD/200 9 FOR A.Y. 2006-07 ORDER DATED 29-04-2011 HAS HELD THAT O NCE ASSESSEE HAS OBTAINED FORM NO.15-I FROM THE SUB-CONTRA CTORS, HE IS NOT LIABLE TO DEDUCT TAX FROM THE PAYMENTS MADE TO SU B- CONTRACTORS AND NO DISALLOWANCE CAN BE MADE UNDER S.40(A )(IA). BELATED FURNISHING OF FORM NO.15J TO THE CIT IS AN ACT POST ERIOR IN TIME TO PAYMENTS MADE TO SUB-CONTRACTORS AND THEREFOR E, THIS CANNOT BY ITSELF UNDO THE ELIGIBILITY OF EXEMPTION CREATED BY SECOND PROVISO TO S.194C(3)(I) BY VIRTUE OF SUBMISSION OF FORM NO.15-I BY THE SUB-CONTRACTORS. 13 ITA NO.20/PN/2014 24. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE 15G FORMS SUBMITTED BY THE SUB-CONTRACTORS TO W HOM THE ASSESSEE HAS MADE PAYMENTS EXCEEDING RS.20,000/- WITHOU T DEDUCTION OF TAX. THE AO SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROU NDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. 25. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23-10-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; # DATED : 23 RD OCTOBER, 2015. LRH'K ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. CIT(A) - I II, PUNE 4. 5. 6. CIT-III, PUNE ' *, *, IQ.KS / DR, ITAT, B PUNE; / GUARD FILE. / BY ORDER , ' //TRUE COPY// / * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE