Sarbjit Singh, Mandi V. ITO, Mandi

ITA 203/CHANDI/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7778 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 16-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 203/CHD/2012 ASSESSMENT YEAR: 2005-06 SHRI SARABJIT SINGH, V INCOME TAX OFFICER, PROP. J.S.CARGO MOVERS, SUNDER NAGAR, V-DHANOTU P.O. MAHADEV, DISTT.MANDI (HP). TEH. SUNDER NAGAR, DISTT. MANDI (HP). PAN: AJAPS-2330Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.R.THAKUR RESPONDENT : SMT. JAISHREE SHARMA DATE OF HEARING : 10.07.2012 DATE OF PRONOUNCEMENT : 26.07.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 21.12.2011 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN PASSING THE ORDER IGNORING THE FACTS ARID CIRCUMSTA NCE OF THE EASE. THE ORDER IS LIKELY TO BE SET ASIDE IN THE EYES OF LAW. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN SUSTAINING THE ADDITION OF RS 1 ,34,53,063/- MADE BY THE A.O U/S 40(A)(IA) BEING THE AMOUNT OF HIR E CHARGES PAID TO OTHER TRUCK OWNERS WITHOUT DEDUCTION OF T.D.S WH ICH DO NOT 2 EXCEEDS RS 50,000/- PER TRIP OF A TRUCK OWNER. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN HOLDING THAT THE PAYMENT TO HIRED VEHICLES WOULD FALL IN THE CATEGORY OF PAYMENT TO WORDS PAYMENT TO A SUB-CONTRACTOR TO THE TRUCK OWNER AS THE PROVISION OF SECTION 194C(2 ) DO NOT APPLY FOR THE PAYMENT OF HIRE CHARGES AND SECTION 40(A)(IA) I S RIOT APPLICABLE. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT ADDITION MADE IN THE CASE DECIDED U/S 144 AFTER REJECTING THE BOOKS OF ACCOUNT IS CORRECT, WHICH IS AGAINST THE LAW AND THE ADDITION IS LIKELY TO BE DELETED. 5. ANY OTHER GROUND WHICH MAY BE TAKEN BEFORE THE HEARING OF THE APPEAL WITH THE PERMISSION OF THE HONOURABLE IN COME TAX APPELLATE TRIBUNAL. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' CONTENDED THAT THE ISSUE IS COVERED BY THE DECISION OF THE SPECIAL BENCH OF VISHAKHAPATNAM TRIBUNAL IN ACIT V MERILYN SHIPPING & TRANSPORTS V ADDL.CIT (2012) 70 DTR (VISHAKHAPATNAM)(SB) (TRIB) 81. LD. 'DR' ALSO SUBS CRIBE TO THE CONTENTION MADE BY THE ASSESSEE. LD. 'AR' ALSO STATED THAT THE EXPENDITURE COVERED UNDER THE PROVISION OF SECTION 40A(IA) OF THE ACT HAS BEEN PAID BY THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE SPECIAL BENCH OF VISHAKHAPATNAM IS REPRODUCED HEREUNDER : 12. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS OF HON'BLE SUPREME COURT AND HON'BLE HIGH COURTS, MATE RIALS PLACED BEFORE US, ARGUMENTS MADE BY BOTH THE SIDES AND IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, ON COMPARISON BETWEEN THE PROPOSED AND ENACTED PROVISI ON, THE ONLY CONCLUSION WHICH I CAN REACH IS THAT THE 3 LEGISLATURE CONSCIOUSLY REPLACED THE WORDS 'AMOUNTS CREDITED OR PAID' WITH THE WORD 'PAYABLE' IN THE FI NAL ENACTMENT. BY CHANGING THE WORDS FROM 'CREDITED' OR 'PAID' TO 'PAYABLE', THE LEGISLATIVE INTENT HAS BEEN MADE CLEAR THAT ONLY OUTSTANDING AMOUNTS OR THE PROVISIONS FOR EXPE NSES LIABLE FOR TDS UNDER CHAPTER XVII-B OF THE ACT IS SOUGHT T O BE DISALLOWED IN THE EVENT THERE IS A DEFAULT IN FOLLO WING THE OBLIGATIONS CASTED UPON THE ASSESSEE UNDER CHAPTER XVII-B OF THE ACT. I AGREE WITH THE ARGUMENTS MADE BY ID. COUNSEL FOR THE ASSESSEE AND OTHER COUNSELS FOR THE INTERVE NES THAT WHILE INTERPRETING THE WORD 'PAYABLE' IN THIS PROVI SION, THE WORD OF A STATUTE MUST BE UNDERSTOOD IN ITS NATURAL , ORDINARY OR POPULAR SENSE AND CONSTRUED ACCORDING TO ITS GRAMMA TICAL MEANING. ACCORDING TO ME, SUCH CONSTRUCTION WOULD N OT LEAD TO ABSURDITY BECAUSE THERE IS NOTHING IN THIS CONTE XT OR IN THE OBJECT OF THIS STATUTE TO SUGGEST TO THE CONTRARY. IT IS A CARDINAL PRINCIPLE OF INTERPRETATION THAT THE WORDS OF A STA TUTE MUST BE PRIMA FACIE GIVEN THEIR ORDINARY MEANING, WHEN THE WORDS OF THE STATUTE ARE CLEAR, PLAIN AND UNAMBIGUOUS THEN T HE COURTS ARE BOUND TO GIVE EFFECT TO THAT MEANING. THE LITER AL RULE OF INTERPRETATION REALLY MEANS THAT THERE SHOULD BE NO INTERPRETATION OF THE STATUTE, RATHER IN OTHER WORD S, WE SHOULD READ THE STATUTE AS IT IS WITHOUT DOING ANY VIOLENC E TO THE LANGUAGE. IN THE PRESENT DISPUTE BEFORE US, THE WOR D 'PAYABLE' USED IN SECTION 40(A)(IA) OF THE ACT IS T O BE ASSIGNED STRICT INTERPRETATION, IN VIEW OF THE OBJE CT OF LEGISLATION, WHICH IS INTENDED FROM THE REPLACEMENT OF THE WORDS IN THE PROPOSED AND ENACTED PROVISION FROM TH E WORDS 'AMOUNT CREDITED OR PAID' TO 'PAYABLE'. HENCE, IN M Y VIEW, MY ANSWER TO THE QUESTION REFERRED BY HON'BLE PRESIDEN T TO THE SPECIAL BENCH IS AS UNDER: THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPLICABLE ONLY TO THE AMOUNTS OF EXPENDITURE WHICH ARE PAYABL E AS ON THE DATE 31 ST MARCH OF EVERY YEAR AND IT CANNOT BE INVOKED TO DISALLOW WHICH HAD BEEN ACTUALLY PAID DURING THE PR EVIOUS YEAR, WITHOUT DEDUCTION OF TDS. 4 5. THE ISSUE IS RESTORED TO THE FILE OF THE AO TO ALLO W THE SAME IN THE LIGHT OF THE DECISION OF THE SPECIAL BE NCH, AS CITED ABOVE, ONLY AFTER VERIFYING FACTUM THAT THE I MPUGNED AMOUNT HAS BEEN PAID BY THE ASSESSEE BEFORE THE REL EVANT DATE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH JULY,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH