ITO, Ward - 3(4), Kolkata, Kolkata V. M/s. Keshan Logistics Pvt. Ltd., Kolkata

ITA 202/KOL/2011

• Counselvise Citation: 20223514 RSA 2011
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2011
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 04-02-2011
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 194C

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B, KOL KATA [ , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SRI N.VIJAYAKUMARAN, JUDICIAL MEMBER & SRI C.D. RAO, AC COUNTANT MEMBER $ $ $ $ / ITA NO. 202 (KOL) OF 2011 %& '( / ASSESSMENT YEAR 2006-07 INCOME-TAX OFFICER, WARD-3(4), KOLKATA. M/S. KESHAN LOGISTIC PVT. LTD. KOLKATA. (PAN-AACCK6054D) (+, / APPELLANT ) - - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI S.K. ROY /0+, 1 2 ' / FOR THE RESPONDENT: / SRI SUNIL SURANA 3 1 !# / DATE OF HEARING : 29/11/2011 4' 1 !# / DATE OF PRONOUNCEMENT : 05/12/2011 '5 / ORDER ( ), (N. VIJAYAKUMARAN), JUDICIAL MEMBER : THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER OF THE LD. C.I.T.(A)- I, KOLKATA. THE DATE OF ORDER IS 23/11/2010 AND THE A SSESSMENT YEAR INVOLVED IS 2006-07. THE GROUNDS RAISED IN THIS APPEAL BY THE DEPARTMENT READ AS UNDER :- 1. LD. CIT(A)-I HAS ERRED ON THE FACT S AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 26,76,722/- WHICH WAS MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE IT ACT FOR NON DEDUCTI ON OF TDS AS PER PROVISIONS OF SECTION 194C OF THE IT ACT AGAINST FR EIGHT CHARGES. 2. LD. CIT(A) HAS ERRED ON THE FACTS AN D CIRCUMSTANCES OF THE CASE IN ACCEPTING ASSESSEES CONTENTION THAT SINCE DEDUCTEE S SUBMITTED FORM 15-I BEFORE THE ASSESSEE IT HAD NO LIABILITY FOR DEDUCTI ON OF TDS AGAINST FREIGHT WITHOUT APPRECIATING THE FACTS THAT ASSESSEE WAS LI ABLE TO SUBMIT FORM 15-I BEFORE THE IT AUTHORITY AS PER RULE 29D TO AUTHENTI CATE THE CLAIM. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE THE ORDER OF LD CIT (A) IS PERVERSE, HENCE SAME MAY BE SET ASIDE AND ORDER OF A.O BE RESTORED. 2. THE FACTS ON THE ABOVE ISSUES ARE THAT THE ASSE SSEE IS A TRANSPORT OPERATOR. THE ASSESSEE HAD NO VEHICLES OF ITS OWN AND THE BUS INESS WAS BEING CARRIED ON BY HIRING 2 THE VEHICLES. ACCORDING TO THE LD. A.O., THE ASSES SEE PAID FREIGHT CHARGES TOTALLING TO RS.2,95,63,293/-, BUT OUT OF THE SAID AMOUNT, THE A SSESSEE DID NOT DEDUCT TDS ON THE AMOUNT OF RS.26,76,722/- PAID TO LORRY OWNERS. THE LD. A.O. FURTHER OBSERVED THAT ALTHOUGH THE ASSESSEE RECEIVED FORM NO.15-I, BUT TH E SAME WAS NOT PROPERLY FILLED OR VERIFIED/SUBMITTED BEFORE THE LD. C.I.T. OF THE CON TRACTOR. HE, THEREFORE, INVOKED PROVISIONS OF SEC. 40(A)(IA) OF THE ACT READ WITH R ULE 29D OF THE RULES AND MADE ADDITION OF RS.26,76,722/- TO THE TOTAL INCOME OF T HE ASSESSEE. 3. ON APPEAL, THE LD. C.I.T.(A) DELETED THE ADDITI ON OF RS.26,76,722/- BY OBSERVING AS UNDER :- 7.2. I HAVE CONSIDERED THE FACTS NARRATED IN THE ASSESSMENT ORDER AND SUBMISSION OF THE LD AR. IN SO FAR THE APPLICABILIT Y OF THE PROVISIONS OF SECTION 40(A)(IA) ON THE AMOUNT WHICH WAS DULY PAID DURING THE YEAR AND WAS NOT PAYABLE AT THE END OF THE YEAR, I DO NOT AGREE WITH THE SUB MISSIONS OF THE APPELLANT. THE PROVISIONS OF SECTION 40(A)(IA) ARE LINKED WITH THE PROVISIONS CONTAINED IN SECTION 194C. IF ANY TAX WAS DEDUCTABLE AND NOT DEDUCTED, S ECTION 40(1)(IA) SHALL BE APPLICABLE WHETHER IT REMAINED PAYABLE OR PAID DURI NG THE PREVIOUS YEAR. HENCE THIS CONTENTION OF THE ASSESSEE IS REJECTED. I HOWE VER FIND THAT THE ASSESSEE ADMITTEDLY RECEIVED FORM 15-I FROM THE VEHICLE OWNE RS FOR NOT DEDUCTING THE TAX. I ALSO FOUND FROM THE DETAILS OF THE PARTIES F ROM WHOM TDS WAS NOT DEDUCTED THAT IN MOST OF THE CASES THE PAN OF SUCH PERSONS WERE MENTIONED. IT ALSO APPEARS THAT THE A.O (TDS) ISSUED THE NOTICE T O THE ASSESSEE FOR THE REASON THAT IN SOME OF THE CASES PAN OF THE DEDUCTE ES WERE NOT MENTIONED IN THE RETURN OF TDS. THE ASSESSEE REPLIED AS TO WHY I N SOME OF THE CASES PANS WERE NOT MENTIONED. FROM THE READING OF SECTION 194 C, IT APPEARS THAT ONCE THE ASSESSEE HAS RECEIVED FORM NO. 15-I HE IS DEBARRED FROM DEDUCTING THE TAX. THE SUBMISSIONS OF THE FORMS BEFORE THE CONCERNED AUTHO RITIES IS NOT A CONDITION PRECEDENT. FURTHER MORE EVEN IF THERE ARE SOME DEF ECTS IN SUCH FORMS , IF SUCH FORMS IN SUBSTANCE ARE IN CONFORMITY WITH THE PROVI SIONS OF THE ACT THEN THE SAME CANNOT BE IGNORED AS PROVIDED U/S. 292B. IN AN Y CASE THERE IS NO DISPUTE THAT THE DEDUCTEES SUBMITTED THE FORM NO. 15-I, FRO M THE VEHICLE OWNERS WHICH IS THE ONLY CONDITION U/S 194C FOR NOT DEDUCTING TH E TAX, SECTION 40(A)(IA) CANNOT BE APPLIED. IF THE ASSESSEE HAS FAILED TO SUBMIT TH E FORM 15J TO THE CIT, THE PENAL PROVISIONS FOR NOT SUBMITTING SUCH FORM BEFOR E THE APPROPRIATE AUTHORITIES CAN BE INVOKED BUT FOR THAT REASON DISALLOWANCE CAN NOT BE MADE U/S 40(A)(IA). THEREFORE THE ADDITION WAS NOT CALLED FOR. IN VIEW, OF MY ABOVE DECISION I DECLINE TO ADJUDICATE ON THE ALTERNATIVE PLEA THAT THERE WAS NO CONTRACT WITH THE INDIVIDUAL TRUCK OWNERS FOR CARRYING ON OF THE GOOD S IN THE TRANSPORT BUSINESS. THE ADDITION OF RS.2676722/- IS DELETED. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DEPA RTMENTAL REPRESENTATIVE RELIED O THE ORDER OF THE LD. A.O. ON THE OTHER HAND, THE L EARNED COUNSEL FOR THE ASSESSEE 3 SUPPORTED THE ORDER OF THE LD. C.I.T.(A). HE ALSO SUBMITTED THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISIONS OF I.T.A.T., KOLK ATA BENCHES IN THE FOLLOWING CASES, COPIES OF WHICH HAVE BEEN PLACED ON RECORD :- (1) CAPITAL TRANSPORT CORPN. OF INDIA VS. IT O [ITA NO.1753/KOL/09, DATED 11/8/11] (2) ITO VS. M/S. S.S. IMPEX [ITA NO. 977/KO L/11, DATED 23/9/2011] THE LEARNED COUNSEL, THEREFORE, SUBMITTED THAT THE ORDER OF THE LD. C.I.T.(A) SHOULD BE UPHELD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. WE FIND THAT I.T. A.T., KOLKATA BENCH B VIDE ITS ORDER DATED 11/8/2011 IN THE CASE OF CAPITAL TRANSPORT CO RPN. OF INDIA VS. ITO (SUPRA), ON IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE AND F OLLOWING THE DECISION OF I.T.A.T., MUMBAI BENCH DATED 20/5/2011 IN THE CASE OF SHRI VI PIN P. MEHTA VS. ITO IN ITA NO.3317/MUM/2010, HAS DIRECTED TO DELETE THE ADDITI ON MADE U/S. 40(A)(IA) OF THE ACT. THE RELEVANT FINDING IS REPRODUCED BELOW :- 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. ITAT, MUMBAI BENCH IN THE CASE OF SHRI VIPIN P. MEHTA VS. ITO IN ITA NO.3317/MUM/2010 VIDE ORDER DATED 20 .05.2011, HAS, INTER ALIA, HELD AS UNDER :- .ALL THESE PROVISIONS INDICATE THAT THE FAILUR E ON THE PART OF THE ASSESSEE, WHO IS THE PAYER OF THE INTEREST, TO FILE THE DECLARATIONS GIVEN TO HIM BY THE PAYEES OF THE INTEREST, WITHIN THE TIME LIMIT SPECIFIED IN SUB- SECTION (2) TO SECTION 197A IS DISTINCT AND SEPARAT E AND MERELY BECAUSE THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO S UBMIT THE DECLARATIONS TO THE INCOME-TAX DEPARTMENT WITHIN THE TIME LIMIT, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT HAVE DECLARATIONS WITH HIM AT THE TIME WHEN HE PAID THE INTEREST TO THE PAYEES. THAT WOULD BE A SEPARATE MA TTER AND SEPARATE PROOF AND EVIDENCE IS REQUIRED TO SHOW THAT EVEN WHEN THE ASSESSEE PAID THE INTEREST, HE DID NOT HAVE THE DECLARATIONS FROM PAY EES WITH HIM AND THEREFORE HE OUGHT TO HAVE DEDUCTED THE TAX FROM TH E PAYMENT. NO SUCH EVIDENCE OR PROOF HAS BEEN BROUGHT BY THE DEPARTMEN T. FOR THE AFORESAID REASONS, WE ACCEPT THE A SSESSEES CLAIM THAT SINCE HE HAD THE DECLARATIONS OF THE PAYEES IN THE PRESCR IBED FORM BEFORE HIM AT THE TIME WHEN THE INTEREST WAS PAID, HE WAS NOT LIA BLE TO DEDUCT TAX THEREFROM UNDER SECTION 194A. IF HE WAS NOT LIABLE TO DEDUCT TAX, SECTION 40(A)(IA) IS NOT ATTRACTED. THERE IS NO OTHER GROUN D TAKEN BY THE INCOME TAX AUTHORITIES TO DISALLOW THE INTEREST. WE THEREFORE ACCEPT THE ASSESSEES APPEAL AND DELETE THE DISALLOWANCE OF INTEREST OF R S.7,87,291/-. 4 6. IN THE PRESENT CASE BEFORE THE ASSESSING OFFICER ASSESSEE HAD SUBMITTED THAT FORM 15-I RECEIVED BY HIM COULD NOT BE DEPOSITED WITH THE LD. CIT. ASSESSEES SUBMISSIONS HAVE BEEN REPRODUCED IN PARA-7(II) AT PAGE-4 OF ASSESSING OFFICERS ORDER. AFTER CONSIDERING THE AS SESSEES SUBMISSION ASSESSING OFFICER, INTER ALIA, OBSERVED THAT ASSESS EE DID NOT SUBMIT FORM 15J BY 30.06.2006 BECAUSE HE HAD NOT RECEIVED FORM 15-I. H E WAS OF THE VIEW THAT 15-I WAS RECEIVED SUBSEQUENTLY WHEN THE ASSESSEE WAS CON FRONTED WITH THE ISSUE OF DISALLOWANCE UNDER SECTION 40(A)(IA). THE AVAILABIL ITY OF FORM15-I, HOWEVER, AT THE TIME OF ASSESSMENT PROCEEDINGS IS NOT DOUBTED. THEREFORE, IN VIEW OF DECISION IN THE CASE OF SHRI VIPIN P. MEHTA (SUPRA) , ASSESSING OFFICER IS DIRECTED TO DELETE THE DISALLOWANCE OF RS.24.74.376/-. IN TH E RESULT, GROUND NOS. 1 & 2 OF THE APPEAL ARE ALLOWED. IN VIEW OF THE AFORESAID DECISION OF I.T.A.T., KOLK ATA BENCH, WE SEE NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. C.I.T.(A), WHIC H IS UPHELD. HENCE THE GROUNDS RAISED BY THE DEPARTMENT ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. 6 '5 #' 7 8 69 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 05/12 /XI SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( ) (C.D. RAO), ACCOUNTANT MEMBER (N.VIJAYAKUMARAN) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 5 -12-2011 '5 1 /%% :'';- COPY OF THE ORDER FORWARDED TO: 1. +, / THE APPELLANT : I.T.O., WARD-3(4), KOLKATA. 2 /0+, / THE RESPONDENT : M/S. KESHAN LOGISTICS PVT. LTD., 30, COTTON STREET , 2 ND FLOOR, KOLKATA-700 007. 3. %5 () : THE CIT(A)-I, KOLKATA. 4. %5/ THE C.I.T., KOL - 5 ?%8 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 GUARD FILE . 0 /%/ TRUE COPY, '5/ BY ORDER, (DKP) @ / DY/ASSTT. REGISTRAR .