Pankaj Chaturbhuj Garg, Pune V. Income-tax Officer,

ITA 2090/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1610 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 194C; 201(1)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 2090 /PN/201 4 / ASSESSM ENT YEAR : 20 09 - 1 0 PANKAJ CHATURBHUJ GARG, MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN: A HXPG8106H VS. THE INCOME TAX OFFICER, WARD 1 ( 3 ), PUNE . / RESPONDENT / APPELLANT BY : SHRI NEELESH KHANDELWAL / APPELLANT BY : SHRI NEELESH KHANDELWAL / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 2 9 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .20 1 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , PUNE , DATED 30 . 0 4 .20 1 4 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE DISALLOWANCE OF RS.65,980/ - , RS.49,299/ - & RS.2,30,436/ - BEING C & F CHARG ES & TRANSPORT CHARGES AGGREGATING TO RS.3,45,715/ - MADE BY THE AO U/S 40(A)(IA) OF THE ACT & CONFIRMED BY THE 1 ST APPELLATE AUTHORITY IS UNWARRANTED, UNJUSTIFIED, AND ITA NO. 2090 /PN/20 1 4 PANKAJ CHATURBHUJ GARG 2 CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT. IT BE HELD THAT NO SUCH DISALLOWANCE IS WARRANTED AND JUSTIFIED ON FACTS OF THE CASE. THE DISALLOWANCE SO MADE BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA ) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD INCURRED CERTAIN EXPENDITURE, ON WHICH NO TAX WAS DEDUCTED AT SOURCE AND DISALLOWED SUM OF RS. 4,68,577/ - FOR NON - DEDUCTION OF TAX UNDER SECTION 40(A)(IA) OF THE ACT . 5. THE CIT(A) ALLOWED PARTIAL RELIEF TO THE ASSESSEE IN THIS REGARD AND RESTRICTED THE DISALLOWANCE WITH REGARD TO C & F CHARGES OF RS.65,980/ - & RS.49,299/ - AND TRANSPORT CHARGES OF RS. 2,30,436/ - , AGGREGATING TO RS. 3,45,715/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN RESPECT OF C & F CHARGES, THE RESPECTIVE PAYEES HAVE INCLUDED THE SAID AMOUNT AS TH EIR INCOME AND IN VIEW OF THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012, NO DISALLOWANCE WAS WARRANTED UNDER SECTION 40(A)(IA) OF THE ACT . IN RESPECT OF TRANSPORT CHARGES OF RS.2,30,436/ - WHICH WAS PAID TO M/S. NATIONAL TRANSPORT COMPANY, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TDS IN THIS REGARD THOUGH DUE TO BE PAID, WAS PAID BELATELY BY THE ASSESSEE AND DIRECTIONS MAY BE GIVEN TO ALLOW THE SAID EXPENDITURE AS DEDUCTION IN THE YEAR OF PAYMENT. 8. THE LEARNED DEPAR TMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. ITA NO. 2090 /PN/20 1 4 PANKAJ CHATURBHUJ GARG 3 9. ON PERUSAL OF RECORD, IT IS APPARENT THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE SAID SECT ION PROVIDES THAT WHERE CERTAIN EXPENDITURE IS INCURRED BY THE PERSON, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE DUE DATE SPECIFIED IN SECTION 139(1) OF T HE ACT, THEN SUCH AMOUNT IS NOT TO BE ALLOWED AS DEDUCTION. THE PROVISO THEREUNDER PROVIDES THAT IN RESPECT OF SUCH SUM, WHERE TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCTED IN THE PREVIOUS YEAR, BUT PAID AFTER THE DUE DATE UNDER SECTIO N 139(1) OF THE ACT, 30% ON SUCH SUM SHALL BE ALLOWED AS DEDUCTION IN COMPUTING INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THIS PROVISO HAS BEEN SUBSTITUTED BY THE FINANCE ACT, 2010 W.E.F. 01.04.2010. PRIOR TO ITS SUBSTITUTION, THE PROV ISO HAD LAID DOWN THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED OR HAS BEEN DEDUCTED AND NOT PAID TILL CLOSE OF THE YEAR, THEN SUCH SUM SHALL BE ALLOWED AS DEDUCTION IN COMPUTING THE INCOME OF PREVIOUS YEAR IN SUM SHALL BE ALLOWED AS DEDUCTION IN COMPUTING THE INCOME OF PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. THIS PROVISO WAS APPLICABLE WITH RETROSPECTIVE DATE W.E.F. 01.04.2005 TILL 01.04.2010. THE YEAR UNDER APPEAL IS ASSESSMENT YEAR 2009 - 10 I.E. YEAR ENDING 31.03.2009 AND AS SUCH, THE PROVISIONS OF PRE - AMENDED PROVISIONS ARE TO BE APPLIED. FURTHER, THE FINA NCE ACT, 2012 HAS PROVIDED THAT WHERE THE ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY AMOUNT OF TAX ON ANY SUCH SUM, BUT THE PERSON WOULD NOT BE DEEMED TO BE THE ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SECTION 201(1) OF THE ACT, WHERE TAXES ON SUCH SU M HAVE BEEN PAID BY THE PAYEE. THIS PROVISO THOUGH INSERTED W.E.F. 01.04.2013 , BUT THE COURTS HAVE HELD THAT THE SAID SECOND PROVISO IS CLARIFICATORY IN NATURE AND IS APPLICABLE TO THE EARLIER YEARS ALSO. 10 . IN VIEW OF THE PROVISIONS OF THE ACT, THE FIR ST PART OF THE ISSUE RAISED BEFORE THE TRIBUNAL IS WITH REGARD TO C & F CHARGES OF RS.65,980/ - PAID TO MAA ITA NO. 2090 /PN/20 1 4 PANKAJ CHATURBHUJ GARG 4 OM LOGISTICS AND RS.49,299/ - TO BELIEVE LOGISTICS. THE ASSESSEE EXPLAINS THAT BOTH THE SAID CONCERNS HAVE INCLUDED THE SAID AMOUNT IN THEIR RECEIPTS AND WHERE THE PAYEE HAS PAID THE TAXES, THEN NO DISALLOWANCE IS TO BE MADE, IN VIEW OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT. IN VIEW OF THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM OF ASS ESSEE AND THE ASSESSEE IS DIRECTED TO PRODUCE THE EVIDENCE BEFORE THE ASSESSING OFFICER, WHO IN TURN, SHALL DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW. 1 1 . NOW, COMING TO SECOND PAYMENT OF RS.2,30,436/ - TO NATIONAL TRANSPORT COMPANY ON ACCOUNT OF TRANSPO RT CHARGES. THE ASSESSEE HAS PLACED ON RECORD THE FORM NO.26AS I.E. THE ANNUAL TAX STATEMENT UNDER SECTION 203AA OF THE ACT OF SURINDER SINGH, WHO IS SOLE PROPRIETOR OF NATIONAL TRANSPORT COMPANY. THE ASSESSEE HAS ALSO PLACED ON RECORD THE COPY OF BILL O F NATIONAL TRANSPORT COMPANY, ON WHICH PAN NUMBER IS PROVIDED I.E. AHCPS8391R, TRANSPORT COMPANY, ON WHICH PAN NUMBER IS PROVIDED I.E. AHCPS8391R, WHICH IS ALSO REFLECTED IN FORM NO.26AS. THE PERUSAL OF THE SAID ANNUAL TAX STATEMENT REFLECTS THAT THE SAID PERSON HAS RECEIVED PAYMENT FROM PANKAJ CHATURBHUJ GARG I.E. THE AS SESSEE IN THE PRESENT APPEAL, ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE. THE DETAILS OF TRANSACTIONS COVERED UNDER SECTION 194C OF THE ACT WITH TRANSACTION DATE AND DATE OF BOOKING OF TDS IS PROVIDED AND EVEN THE TOTAL AMOUNT PAID / CREDITED AND THE TAX DE DUCTED AT SOURCE AND FURTHER TAX DEPOSITED IS ALSO TABULATED IN THE SAID STATEMENT. THE PERUSAL OF THE SAID STATEMENT REFLECTS THAT THE PAYMENTS HAVE BEEN MADE ON 28.07.2009. IN CASE THE AMOUNT HAS BEEN PAID ON 28.07.2009 I.E. BEFORE DUE DATE OF FURNISHI NG THE RETURN OF INCOME, THEN THE AMOUNT IS TO BE ALLOWED AS DEDUCTION TO THE ASSESSEE, IN VIEW OF THE PROVISIONS OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF ASSESSEE IN ENTIRETY. THOUGH THE LEARNED AUTHORIZED REPRESE NTATIVE FOR THE ASSESSEE HAD ARGUED THAT THE SAID ITA NO. 2090 /PN/20 1 4 PANKAJ CHATURBHUJ GARG 5 AMOUNT BE DIRECTED TO BE ALLOWED IN THE SUCCEEDING YEAR I.E. IN THE YEAR WHEN TDS WAS PAID TO THE TREASURY, BUT UNDER THE PROVISIONS OF THE ACT ITSELF IT IS PROVIDED THAT IN CASE THE AMOUNT DEPOSITED WITHIN DUE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, THEN THE ASSESSEE CANNOT BE HELD TO BE IN DEFAULT FOR DEDUCTING AND DEPOSITING THE TAX. ACCORDINGLY, I HOLD SO AND DIRECT THE ASSESSING OFFICER TO VERIFY THE CLAIM OF ASSESSEE AS PER DIRECTIONS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED AS INDICATED ABOVE. 1 2 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. ORDER PRO NOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - I , PUNE ; 4. / THE CIT - I , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE