V-TEX CORPORATION, MUMBAI V. ITO 19(2)(2), MUMBAI

ITA 2054/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1775 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 14-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Reasonable cause; Condonation of delay

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 2054/MUM/2013 / ASSESSMENT YEAR 2005-06 M/S.V-TEX CORPORATION, C-23-24, ACHRAT BAUG, SANTACRUZ (W), MUMBAI 54. / VS. INCOME TAX OFFICER 19(2)(2), ROOM NO.309, 3 RD FLOOR, PIRAMAL CHAMBERS, LABAUG, PAREL, MUMBAI 400012 ! ./ ./ PAN/GIR NO. : AACPK 1951Q ( !$ / APPELLANT ) .. ( %&!$ / RESPONDENT ) ASSESSEE BY NONE RESPONDENT BY : SHRI PAWAN KUMAR BEERLA ( ) * / DATE OF HEARING : 22/04/2015 ( ) * / DATE OF PRONOUNCEMENT : 22/04/2015 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-35 MUMBAI DATED 2/1/2013 FOR A SSESSMENT YEAR 2005- 06. GROUNDS OF APPEAL READ AS UNDER: YOUR APPELLANT BEING DISSATISFIED WITH ORDER DTD. 02.01 .2013 PASSED BY THE COMMISSIONER OF INCOME TAX, (APPEALS} 35, MUMBAI (H EREINAFTER REFERRED TO AS COMMISSIONER) PRESENTS THIS APPEAL AGAINST THE SAME ON THE FOLLOWING AMONGST OTHER GROUNDS, 1] THE ORDER DTD. 02.01.2013 PASSED U/S. 143(1) OF THE I. T. ACT, 1961 BY COMMISSIONER IS BAD IN LAW AND ILLEGAL. THE COMMISS IONER HAS ERRED BOTH ON . / ITA NO. 2054/MUM/2013 / ASSESSMENT YEAR 2005-06 2 FACTS AND IN LAW. !T IS SUBMITTED THAT THE ADDITION S AND DISALLOWANCES BE DELETED NOW. 2] THE LEARNED ITO 19(2)(2) ERRED IN LAW AND FACTS IN DISALLOWING RS.9.80,196/- U/S.40(A)(IA). YOUR APPELLANT CONTENDED THAT SAID D ISALLOWANCE U/S.40(A)(IA) IS UNWARRANTED ON FACTS AND IN LAW AND SHOULD BE DELET ED. 3] IT IS CONTENDED THAT IN VIEW OF AMENDMENT TO SEC .40(A)(IA) BY FINANCE ACT, 2008 AND AS THE CONDITIONS OF AMENDED TO SEC 40(A)(IA) ARE COMPLIED WITH, THE SAID ADDITION DESERVES TO BE DELETED. YOUR HON. IS THERE FORE PRAYED THAT SAID ADDITION OF RS.9,80,196/- BE DELETED. 4] APPELLANT ALSO REQUEST TO CONDONE THE DELAY FOR MORE THAN 30 DAYS IN FILLING THE APPEAL BEFORE COMMISSIONER OF INCOME TAX ( APPEALS) 35 DUE TO CERTAIN UNAVOIDABLE CIRCUMSTANCES. 5] FURTHER IT IS REQUESTED NOT TO START PENALTY PRO CEEDING U/S.. 271(1)(C) TO THE IT ACT.1961 TILL THE CONCLUSION OF THIS APPEAL PROCEED INGS. 2. A SUM OF RS.9,30,196/- HAS BEEN DISALLOWED ON TH E GROUND THAT ON THE SAID AMOUNT REPRESENTING PAYMENTS MADE TO THE CONTR ACTOR, TAX WAS DEDUCTED THEREON DURING THE LAST MONTH OF THE PREVIOUS YEAR AND WAS PAID AFTER THE DUE DATE OF PAYMENT OF TDS. THE PARTICULARS OF PAYMENT AND DEDUCTION OF TAX ARE MENTIONED IN THE ASSESSMENT ORDER ITSELF AT PAGE-4 OF THE ASSESSMENT ORDER AND THE SAME ARE REPRODUCED BELOW: TYPE OF PAYMENT AMOUNT TDS DUE DATE DATE OF PAYMENT CONTRACTOR (U/S.194C) 9,80,196 19,996 30/05/2005 07/07/2005 2.1 THE IMPUGNED ASSESSMENT ORDER IS PASSED ON 12/1 2/2007. ASSESSMENT ORDER WAS SERVED UPON THE ASSESSEE ON 2/1/2008. TH E ASSESSEE DID NOT PREFER AN APPEAL BEFORE LD. CIT(A) IN TIME. HOWEVER, SUB SEQUENT TO INTRODUCTION OF AMENDMENT BROUGHT BY SECTION 10(A)(I) OF FINANCE AC T 2008, SUCH PAYMENT WAS MADE ALLOWABLE, IF THE SAME IS MADE BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1) OF THE ACT AND THE AMENDMENT WAS MADE WITH RETROSPECTIVE EFFECT FROM A.Y. 2005-06 IN SECTION 40(A)(IA) OF THE ACT. THUS , ON BECOMING THE SAID AMENDMENT EFFECTIVE THE ASSESSEE IMMEDIATELY PREFER RED AN APPEAL BEFORE LD. CIT(A) WHICH WAS FILED ON 28/5/2008. LD. CIT(A) R EQUIRED THE ASSESSEE TO EXPLAIN THE DELAY WHICH WAS EXPLAINED BY THE ASSESS EE AND IT WAS SUBMITTED . / ITA NO. 2054/MUM/2013 / ASSESSMENT YEAR 2005-06 3 THAT DUE TO THE SAID AMENDMENT THE ASSESSEE HAS BEC OME ENTITLED TO CLAIM THE PAYMENT OF THE IMPUGNED DISALLOWANCE. IT IS SEEN T HAT ASSESSEE COULD NOT EXPLAIN CLEARLY THAT THE RETROSPECTIVE AMENDMENT WH ICH MADE THE ASSESSEE ENTITLED TO CLAIM SUCH DEDUCTION PROMPTED HIM TO F ILE THE APPEAL. HOWEVER, LD. CIT(A) DID NOT APPRECIATE THE SUBMISSIONS OF TH E ASSESSEE AND DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE GROUND OF N ON-CONDONATION OF DELAY WITHOUT GOING INTO THE MERITS OF THE CASE. IT IS I N THIS MANNER ASSESSEE HAS PREFERRED FURTHER APPEAL. 3. AT THE TIME OF HEARING NONE WAS PRESENT ON BEHAL F OF THE ASSESSEE. IT BEING A SMALL APPEAL, WE PROCEED TO DECIDE THE SAME ON MERITS AFTER HEARING LD. DR. 4. LD. DR RELIED UPON THE ORDER PASSED BY AO & LD. CIT(A). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR. W E HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A). THE REASONS STATED BY THE ASSESSEE FOR CONDONATION OF DELAY CONSTITUTE REASONABLE CAUSE FOR NON-FILING OF THE APPEAL IN TIME BEFORE L D. CIT(A). RETROSPECTIVE AMENDMENT IN THE PROVISIONS OF SECTION 40(A)(IA) B Y THE FINANCE ACT 2008 MADE THE ASSESSEE ENTITLED TO GET THE DEDUCTION ON THE FACTS AVAILABLE IN THE ASSESSMENT ORDER ITSELF. DISALLOWANCE WAS MADE BY THE AO SIMPLY FOR THE REASON THAT ASSESSEE HAD FAILED TO DEPOSIT THE TDS WITHIN DUE DATE IN SUBSEQUENT YEAR, WHICH IS NOT PRIOR TO DUE DATE OF FILING THE RETURN OF INCOME. UPON FINANCE ACT, 2008 BECOMING LAW THE ASSESSEE IM MEDIATELY FILED THE APPEAL WHICH CONSTITUTE A REASONABLE CAUSE AND DELA Y SHOULD HAVE BEEN CONDONED BY LD. IT(A). 5.1 CONSIDERING THE FACTS OF THE CASE, WE ARE OF TH E OPINION THAT LD. CIT(A) HAS COMMITTED AN ERROR IN NOT CONDONING THE DELAY. WE SET ASIDE SUCH ORDER. . / ITA NO. 2054/MUM/2013 / ASSESSMENT YEAR 2005-06 4 5.2 SINCE THE FACTS ARE AVAILABLE IN THE ASSESSMENT ORDER ITSELF, THE DUE DATE OF FILING THE RETURN BY THE ASSESSEE IS 31/10/2005 AND PAYMENT OF TDS HAS BEEN MADE BY THE ASSESSEE ON 7/4/2005, THEREFORE, THE ASSESSEE IS ENTITLED TO GET RELIEF IN ACCORDANCE WITH THE RETROSPECTIVE AME NDMENT BROUGHT BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1/ 4/2005 APPLICABLE TO ASSESSMENT YEAR 2005-06 VIDE WHICH IT IS STIPULATED THAT IF THE PAYMENT OF TDS DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR IS DEPOSITED ON OR BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1), TH EN THE SAME CANNOT BE DISALLOWED. THEREFORE, THE DISALLOWANCE MADE BY TH E AO DESERVES TO BE DELETED AND ACCORDINGLY DELETED. 5.3 BEFORE PARTING WITH THE APPEAL, WE MAY MENTION HERE THAT IF THE IMPUGNED DISALLOWANCE ON PAYMENT BASIS HAS BEEN ALL OWED IN ANY ASSESSMENT YEAR OTHER THAN THE IMPUGNED ASSESSMENT YEAR, THEN THE AO WILL WITHDRAW THAT AMOUNT AS DOUBLE DEDUCTION OF THE SAME AMOUNT CANNOT BE GIVEN TO THE ASSESSEE. 6. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN T HE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 22/04/2015 ( 0 1 2 22/04/2015 ( SD/- SD/- ( / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 1 DATED 22/04/2015 . / ITA NO. 2054/MUM/2013 / ASSESSMENT YEAR 2005-06 5 / COPY OF THE ORDER FORWARDED TO : 1. !$ / THE APPELLANT 2. %&!$ / THE RESPONDENT. 3. 4) ( ) / THE CIT(A)- 4. 4) / CIT 5. 56 %)78 , * 78 , / DR, ITAT, MUMBAI 6. 9 / GUARD FILE. / BY ORDER, & 5) %) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS