ITO, Virudhunagar V. Sri N.A.Ramasubramania Raja, Rajapalayam

ITA 2037/CHNY/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68636 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Non-deduction of tax; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 2037/MDS/2011 ASSESSMENT YEAR 2008-09 THE INCOME TAX OFFICER, WARD I(3), VIRUDHUNAGAR. VS SRI N.A. RAMASUBRAMANIA RAJA, PROP: R.S. MINES, NO. 43, DHARMARAJA STREET, RAJAPALAYAM. [PAN: AAJPN 5045 R] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SHAJI P.JACOB, ADDL.CIT ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE DATE OF HEARING : 01-08-2013 DATE OF PRONOUNCEMENT : 13-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-II, MADU RAI DATED 19-09-2011 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 8-09. I.T.A. NO. 2037/MDS/2011 :- 2 -: 2. THE FACTS IN BRIEF OF THE CASE ARE, THAT THE ASS ESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING LOGISTIC SERVI CES UNDER THE NAME AND STYLE OF M/S. R.S.MINES. THE ASSESSEE IS PROVIDING TRANSPORT SERVICES EXCLUSIVELY TO M/S. MADRAS CEMEN TS. THE ASSESSEE FILED HIS E-RETURN OF INCOME FOR THE AY 20 08-09 ON 29-09-2008 DECLARING ITS INCOME AS ` 4,95,410/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 03-09-2010. THE ASSESSIN G OFFICER VIDE ASSESSMENT ORDER DATED 31-12-2010 MADE ADDITIO NS ON ACCOUNT OF: I. DIS-ALLOWANCE U/S. 40(A)(IA) FOR NON-FURNISHING OF FORM NO. 15J BEFORE THE JURISDICTIONAL CIT - ` 2,05,07,159/-; II. DIS-ALLOWANCE U/S. 40(A)(IA) FOR DEDUCTING TAX AT LOWER RATE ON PAYMENTS MADE BEYOND ` 1 CRORE ` 52,95,421/-; AND III. EXPENSES DIS-ALLOWED TOWARDS IMPROPER MAINTENA NCE OF VOUCHERS - ` 72,028/-. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) I.T.A. NO. 2037/MDS/2011 :- 3 -: VIDE IMPUGNED ORDER DATED 19-09-2011, PARTLY ALLOWE D THE APPEAL OF THE ASSESSEE. THE CIT(APPEALS) DELETED BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. NOW, THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE ORDER OF THE CIT( APPEALS). 3. SHRI SHAJI P. JACOB, ADDL. CIT APPEARING ON BEHA LF OF THE REVENUE SUBMITTED THAT THE CIT(APPEALS) HAS ERRED I N DELETING THE DIS-ALLOWANCE MADE U/S. 40(A)(IA) BY INTERPRETI NG THE NEWLY INCORPORATED SUB-SECTION (IA) THAT THE AMOUNT PAYAB LE WOULD ONLY ATTRACT DIS-ALLOWANCE U/S. 40(A)(IA). THE LD. DR S UBMITTED THAT THE ISSUE OF PAID AND PAYABLE HAS BEEN DECIDED IN F AVOUR OF THE REVENUE BY THE HONBLE GUJARAT HIGH COURT IN THE CA SE OF CIT VS. SIKANDARKHAN N. TUNVAR & ORS. REPORTED AS 87 DTR 137 (GUJ) . THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE BEFORE THE ASSESSING OFFICER W ITH REGARD TO FILING OF FORM NO. 15J BEFORE THE JURISDICTIONAL CI T. THE LD. DR CONTENDED THAT THE CIT(APPEALS) HAS ERRED IN DELETI NG THE DIS- ALLOWANCE OF ` 52,95,421/- U/S. 40(A)(IA) ON ACCOUNT OF DEDUCTION OF TAX AT SOURCE AT LOWER RATE WITHOUT CONSIDERING THE FACT THAT THE I.T.A. NO. 2037/MDS/2011 :- 4 -: LOW DEDUCTION CERTIFICATE WAS APPLICABLE FOR PAYMEN TS MADE UPTO ` 1.00 CRORE. 4. ON THE OTHER HAND SHRI S. SRIDHAR, ADVOCATE APPE ARING ON BEHALF OF THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE CIT(APPEALS) AND PRAYED FOR DISMISSAL OF THE APPEAL OF THE REVENUE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ASSESSEE HAD FILED COPY OF FORM NO. 15-I AND ACKNOW LEDGMENT FOR FILING THE E-TDS RETURN RELEVANT TO THE ASSESSM ENT YEAR 2008- 09 ON 01-12-2010. THE ASSESSEE HAD ALSO FILED COPY OF FORM NO. 15J AND CONFIRMATION SLIP ISSUED BY THE R.R.NAGAR P OST OFFICE TOWARDS CERTIFICATE OF POSTING OF ARTICLE TO THE CI T-MADURAI. THIS FACT HAS BEEN RECORDED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. THE CIT(APPEALS) HAS ALSO OBSERV ED IN HIS ORDER THAT FORM NO. 15-I OBTAINED FROM SEVERAL TRUC K OWNERS HAVE BEEN SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THIS FACT HAS BEEN ACCEP TED BY THE ASSESSING OFFICER. IT WAS ON VERIFICATION THAT THE ASSESSING OFFICER HAS NOTICED THAT CORRESPONDING FORM NO. 15J WERE NOT SUBMITTED TO THE JURISDICTIONAL CIT WITHIN THE DUE DATE. AT THE I.T.A. NO. 2037/MDS/2011 :- 5 -: MOST, PENALTY CAN BE IMPOSED FOR NON-SUBMISSION OF FORM NO. 15J BUT THE ADDITIONS HAVE BEEN WRONGLY MADE UNDER THE PROVISIONS OF SECTION 40(A)(IA) FOR NON-SUBMISSION OF FORM NO. 15J WITHIN TIME. AS REGARDS THE SECOND ISSUE OF SHORT DEDUCTION OF TAX IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ADDITION CANNOT BE MADE IN VIEW OF THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. M/S. S.K. TEKRIWAL DECIDED ON 03-12-2012 REPORTED AS 2012-TIOL-1057-HC -KOL-17. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND PERUSED THE O RDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGMENTS/ORDERED RELIED ON BY THE REPRESENTATIVES OF BOTH THE SIDES. THE LD. DR ASSAILING THE ORDER OF THE CIT(APPEALS) HAS SUBMITTED THAT THE AS SESSEE HAS NOT FILED ANY EVIDENCE TO SHOW FILING OF FORM NO. 1 5J TO THE JURISDICTIONAL CIT AND THAT THE ASSESSEE HAD ONLY C LAIMED FOR PROPORTIONATE RELIEF WHEREAS THE CIT(APPEALS) HAS A LLOWED THE CLAIM OF THE ASSESSEE IN FULL. WE FIND THAT THE AS SESSEE HAD FURNISHED THE COPIES OF FORM NO. 15-I AND ACKNOWLED GMENT FOR I.T.A. NO. 2037/MDS/2011 :- 6 -: FILING E-TDS RETURN RELEVANT TO THE AY. 2008-09 BEF ORE THE ASSESSING OFFICER. ON INVESTIGATION CONDUCTED BY T HE ASSESSING OFFICER IT TRANSPIRED THAT FORM NO. 15J AS ALLEGED TO HAVE BEEN SENT BY THE ASSESSEE WERE NOT RECEIVED BY THE JURIS DICTIONAL CIT. WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT(AP PEALS) THAT SINCE THE ASSESSEE HAD OBTAINED FORM NO. 15-I FROM SUB- CONTRACTORS, THE ASSESSEE WAS NOT REQUIRED TO DEDUC T TAX AT SOURCE IN RESPECT OF SUCH PAYMENTS. AT THE MOST, P ENALTY PROVISIONS COULD HAVE BEEN INVOKED FOR NON-SUBMISS ION OF CORRESPONDING FORM NO. 15J. DIS-ALLOWANCE UNDER T HE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS NOT A N APPROPRIATE COURSE OF ACTION FOLLOWED BY THE REVENUE. THEREFOR E, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERITS. 6. THE OTHER ISSUE RAISED BY THE REVENUE IS WITH RE GARD TO DIS- ALLOWANCE OF AN AMOUNT IN EXCESS OF ` 1.00 CRORE I.E., ` 52,95,421/- ON WHICH TAX AT LOWER RATE HAS BEEN DED UCTED BY THE ASSESSEE. THE ASSESSEE WAS AUTHORIZED TO DEDUCT TA X AT LOWER RATE OF 0.25% ON PAYMENTS MADE UPTO ` 1.00 CRORE ONLY. BUT THE ASSESSEE ADOPTED THE LOWER RATE OF TAX ON THE BALAN CE PAYMENT OF I.T.A. NO. 2037/MDS/2011 :- 7 -: ` 52,95,421/- AS WELL. THE PROVISIONS OF SECTION 40( A)(IA) CAN BE INVOKED IN CASE OF NON-DEDUCTION OF TAX AT SOURCE, WHERE THERE IS SHORT DEDUCTION OF TAX THE PROVISIONS OF SECTION 40 (A)(IA) DOES NOT COME INTO PLAY. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. M/S. S.K. TEKRIWAL (SUPRA) WHILE UPHOLDING THE ORDER OF THE TRIBUNAL ON THE ISSUE HAS APPROVED THIS PRINCIP LE. THE RELEVANT EXTRACT OF THE ORDER IS RE-PRODUCED HEREIN UNDER: WITH REGARD TO THE SHORTFALL, IT CANNOT BE ASSUMED THAT THERE IS A DEFAULT AS THE DEDUCTION IS NOT AS REQUIRED BY OR UNDER THE ACT, BUT THE FACTS IS THAT THIS EXPRESSION, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDU CTED OR, AFTER DEDUCTION HAS NOT BEEN PAID ON OR BEFORE THE DUE DA TE SPECIFIED IN SUB-SECTION (1) OF SECTION 139. THIS SECTION 40(A) (IA) OF THE ACT REFERS ONLY TO THE DUTY TO DEDUCT TAX AND PAY TO GO VERNMENT ACCOUNT. IF THERE IS ANY SHORTFALL DUE TO ANY DIFFERENCE OF OPINION AS TO THE TAXABILITY OF ANY ITEM OR THE NATURE OF PAYMENTS FA LLING UNDER VARIOUS TDS PROVISIONS, THE ASSESSEE CAN BE DECLARED TO BE AN ASSESSEE IN DEFAULT U/S. 201 OF THE ACT AND NO DISALLOWANCE CAN BE MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IN THE PRESENT CASE, THE DIS-ALLOWANCE U/S. 40(A)(I A) HAS BEEN MADE ONLY FOR THE REASON OF SHORT DEDUCTION OF TAX I.E., DEDUCTION I.T.A. NO. 2037/MDS/2011 :- 8 -: OF TAX AT LOWER RATE BY ASSESSEE. THUS, THE ADDITI ON MADE BY THE ASSESSING OFFICER HAS RIGHTLY BEEN DELETED BY THE C IT(APPEALS). A PERUSAL OF THE ORDER OF THE CIT(APPEALS) SHOWS THAT SHRI P. MADHESWARAN (M/S. PMP ROADLINES, NAMAKKAL) TO WHOM PAYMENTS WERE MADE BY THE ASSESSEE AFTER DEDUCTION OF TDS AT LOW RATES HAD FILED ITS RETURN OF INCOME RELEVANT T O THE AY. 2008- 09 WHEREIN HE HAS DISCLOSED THE ENTIRE AMOUNT AND H AS PAID THE TAX THEREON. IN VIEW OF THE DECISION OF THE HONBL E SUPREME COURT OF INDIA IN THE CASE OF HINDUSTAN COCOCOLA BEVERAGES PVT. LTD., VS. CIT REPORTED AS 293 ITR 226 (SC) THE ASSESSEE CANNOT BE CONSIDERED AS ASSESSEE IN DEFAULT EITHER. THUS, IN VIEW OF THE ABOVE, THE APPEAL OF THE REVE NUE IS DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED ON TUESDAY, THE 13 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (VIKAS AWASTHY) JUDICIAL MEMBER DATED: 13 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR