Siba Narayan Rout, Bhadrak V. ACIT, Balasore Circle, Balasore

ITA 209/CTK/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4368 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection

Judgement Text

2 ITA NO. 209/CTK/2016 ASSESSMENT YEAR : 2008 - 2009 ACT MADE BY THE LD AO IS HIGHLY ILLEGAL, CONTRARY TO FACTS, CONTRARY TO WEIGHT OF EVIDENCE, ARBITRARY AND OUGHT TO BE REJECTED. 3. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE, T HE ORIGINAL ASSESSMENT WAS COMPLETED U/S.L43(3) ON 26.10.2010. SUBSEQUENTLY THE A SSESSING OFFICER NOTICED THAT THE A SSESSEE HAD CLAIMED EXPENSES OF RS.1,18,15,509/ - UNDER THE HEAD 'HIRE CHARGES' AND HAS NOT PRODUCED ANY EVIDENCE OF TDS ON SUCH HIRE CHARGES PAID. HOWEVER , THE ASSESSEE DID NOT FILE ANY RETURN IN RESPONSE TO NOTICE U/S.148 OF THE ACT. THE A SSESSING OFFICER THEN ISSUED NOTICE U/S. 1 42( 1 ) OF THE ACT REQUESTING THE ASSESSEE TO FURNISH DETAILS UNDER THE HEAD HIRE CHARGES AND EVIDENCE OF TDS ON HIRE CHARGES. THE ASSESSEE DID NOT COMPLY WITH THE NOTICE. THE A SSESSING OFFICER AGAIN SENT ANOTHER NOTICE U / S .142( 1 ) OF THE A CT FOR COMPLIANCE ON 20.03.2014 REQUESTING THE ASSESSEE TO FURNISH THE ABOVE INFORMATION. THERE WAS NO COMPLIANCE FROM THE ASSESSEE ON THIS OCCASION TOO. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS . 1 ,18,15,509/ - UNDER THE HEAD 'HIRE CHARGES' WHERE THE ASSESSEE IS SUPPOSED TO DEDUCT TDS WHILE MAKING SUCH PAYMENT OF HIRE CHARGES. IN SPITE OF OPPORTUNITIES P R O V I D E D THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE THAT TDS HAS BEEN DEDUCTED WHILE MAKING SUCH PAYM ENTS. THE REFORE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.144 OF THE ACT AS PER HIS BEST JUDGMENT. SINCE THE PAYMENTS ATTRACTED PROVISIONS OF SECTION 40(A)(IA] OF THE ACT , THE A SSESSING OFFICER DISALLOWED THE HIRE CHARGES PAID AMOUNTING TO RS.1, 18,15,509/ - U/S.40(A)(IA)O F OF THE ACT. 4 ITA NO. 209/CTK/2016 ASSESSMENT YEAR : 2008 - 2009 LD A.R. S UBMITTED THAT THE ISSUE I S COVERED BY THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF INDIAN A ND EASTERN NEWSPAPER SOCIETY VS CIT, 119 ITR 996 (SC),WHEREIN, IT WAS HELD THAT INFORMATION OF AN INTERNAL AUDIT PARTY OF THE INCOME TAX DEPARTMENT ON A POINT OF LAW CANNOT BE REGARDED AS INFORMATION WITHIN THE MEANING OF SECTION 147(B) OF THE I.T.ACT, 1 961 . 8. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE LD A.R.S CONTENTION THAT THE ASSESSING OFFICER HAS PASSED REASSESSMENT ORDER BASED ON AUDIT OBJECTION, WHICH CANNOT BE SUSTAINABLE AND FURTHER ON MERITS, THE ASSESSEE HAS SUBSTANTIATED THE GROUNDS BEFORE THE APPELLATE AUTHORITIES. LD A.R. EMPHASISED ON ANN ULLING THE ASSESSMENT U/S.147 OF THE ACT AS THE SAME WAS BASED ON AUDIT OBJECTION IRRESPECTIVE OF THE FACT THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 26.10.2010 AND THE ASSESSMENT HAS BEEN REOPENED ON THE GROUND OF NON - DEDUCTION OF TDS AND AS PER THE AUDIT OBJECTION. LD A.R. EXPLAINED THAT IN THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER HAS LOOKED INTO THESE ASPECTS AND PASSED THE ASSESSMENT ORDER AND ON THE VERY SAME SET OF FACTS AND BASED ON AUDIT OBJECTION, THE ASSESSMENT CANN OT BE REOPENED. WHEREAS LD D.R. SUBMITTED THAT THE ASSESSING OFFICER HAS IGNORED THE PROVISIONS OF TDS IN THE ORIGINAL ASSESSMENT AND DUE TO AUDIT OBJECTION, THE 6 ITA NO. 209/CTK/2016 ASSESSMENT YEAR : 2008 - 2009 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 3 1 / 01 /201 8 . S D / - S D / - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 3 1 / 01 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SIBA NARAYAN ROUT, BIMBALBAR, PATULI CIRCLE, BARIKPUR, BHADRAK 2. THE RESPONDENT. ACIT, BALASORE 3. THE CIT(A) - CUTTACK 4. PR.CIT - CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//