ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE-2(1), NAGPUR V. M/S GUPTA METALLICS & POWER lIMITED , NAGPUR

ITA 226/NAG/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7487 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 30-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Keywords: Reasonable cause; TDS
• Section: 273B; 201; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (AT E - COURT, PUNE) BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 96 /NAG /20 18 / ASSESSMENT YEAR : 2009 - 10 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1, NAGPUR. ....... / APPELLANT / V/S. SHRI GAJANAN MAHADEVRAO MENDHE, 122, GAJAVANDAN, SHANKAR NAGAR, BAJIPRABHUNAGAR, NEAR RAMNAGAR, NAGPUR - 440010 PAN: AAUPM9125A / RESPONDENT . / ITA NO S. 224 & 225/NAG/2018 / ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(1), NAGPUR. ....... / APPELLANT / V/S. SHRI MAHESH GUPTA, GUPTA BHAWAN, TEMPLE ROAD, SITABULDI, NAGPUR - 440012 PAN: AATPG8810F / RESPONDENT 2 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 . / ITA NO. 226/NAG/2018 / ASSESSMENT YEAR : 2009 - 10 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2(1), NAGPUR. ....... / APPELLANT / V/S. M/S. GUPTA METALLICS & POWER LTD. 5 TH FLOOR, GUPTA HOUSE, CIVIL LINES, NAGPUR - 440012 PAN: AABCG9051D / RESPONDENT A SSESSEE BY : SHRI MANOJ MORYANI & SHRI RAJESH LOYA REVENUE BY : DR. MILIND BHUSARI / DATE OF HEARING : 15 .10 .2019 / DATE OF PRONOUNCEMENT : 15 .10 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THESE APPEALS PREFERRED BY THE REVENUE EMANATES FROM T HE RESPECTIVE ORDERS OF THE LD. CIT(APPEALS) FOR THE ASSESSMENT YEARS AS CAPTIONED HEREINABOVE AND AS PER THE GROUNDS OF APPEAL ON RECORD. 3 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 2. THESE CASES WERE HEARD TOGETHER. SINCE FACTS COMMON, ISSUES ARE SIMILAR, THESE CASES ARE BEING DISPOSED OF VIDE THIS CONSOLIDATED ORDER. IN ALL THESE CASES, THE REVENUE HAS NOT PRESSED THE T AX E F FECT I SSUE . THEREFORE, ALL THESE CASES ARE HEARD AND ADJUDICATED ON MERITS. FIRST, WE WOULD TAKE UP ITA NO.96/NAG/2018 FOR THE ASSESSMENT YEAR 2009 - 10 FOR ADJUDICATION. ITA NO.96/NAG/2018 A.Y.2009 - 10 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING CEMENT PIPES AND ALSO UNDERTAKES WORKS ALLOTTED BY PWD AND OTHER GOVERNMENT DEPARTMENT ON CONTRACT BASIS. RETURN OF INCOME WAS FILED ON 30.09.2009 DECLARING NET TAXABLE INCOME AT RS.29,75,293/ - . THE ASSE SSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS COMPLETED ON 30.12.2011 DETERMINING TOTAL INCOME OF RS.42,04,455/ - . THE ADDITION OF RS.12,29,162/ - ON ACCOUNT OF DISALLOWANCE U/S.40(A)(IA) OF THE ACT WAS MADE IN THE ASSESSMENT WITH A FINDING THAT ASSESSEE HAS PAID TOTAL OF RS.12,29,162/ - FOR SITE DEVELOPMENT EXPENSES TO VARIOUS PARTIES WHERE ASSESSEE SHOULD HAVE MADE TDS U/S.194C OF THE ACT BUT HAD FAILED TO DO. 4. THEREAFTER, THE ASSESSEE PREFERRED APPEAL AGAINST T HE ASSESSMENT ORDER BEFORE THE LD. CIT(APPEALS), NAGPUR. THE SAID APPEAL WAS WITHDRAWN LATER. THE LD. CIT(APPEALS) THEREFORE PASSED ORDER ON 06.08.2015 DISMISSING THE APPEAL. THE ASSESSEE FURTHER PREFERRED APPEAL AGAINST SUCH ORDER OF THE LD. 4 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 CIT(APPEALS) BEFORE THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR STATING THAT HE HAD BEEN MISGUIDED AND HAD WRONGLY WITHDRAWN HIS APPEAL BEFORE THE LD. CIT(A) AND THE TRIBUNAL VIDE ORDER DATED 29.12.2016 IN ITA NO.256/NAG/2010 ALLOWED THE APPEAL HOLDING THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS AND NO DISALLOWANCE U/S.40(A)(IA) OF THE ACT WAS WARRANTED. 5. MEANWHILE, NOTICE U/S.263(1) OF THE ACT WAS ISSUED BY THE LD. CIT - IV, NAGPUR ON 19.02.2014 STATING THE ORDER PASSED BY THE ACIT, CIRCLE - 1, NAGPUR U/S.143(3) OF THE ACT WAS PRIMA FACIE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. CIT - IV, NAGPUR PASSED ORDER U/S.263 ON 10.03.2014 STATING THAT SINCE THE ASSESSING OFFICER HAS NOT DISALLOWED THE SAID EXPENSES I.E. BAY WAY OF PAYMENTS TO SUB - CONTRACTS AND SINCE TDS WAS NOT DEDUCTED U/S.40(A)(IA) OF THE ACT, ASSESSMENT WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THAT CONSEQUENCE TO THIS, ORDER PASSED U/S.263 OF THE ACT, THE ASSESSING OFFICER PASSED ASSESSMEN T ORDER U/S.143(3) R.W.S.263 ON 12.03.2015 AND MADE DISALLOWANCE FOR THE SAID SUM OF RS.66,64,466/ - BY REJECTING THE CONTENTION OF THE ASSESSEE. 6. THAT WHEN THE MATTER TRAVELLED BEFORE THE LD. CIT(APPEALS), AS PER REASONING GIVEN IN HIS ORDER WHICH IS O N RECORD, THE LD. CIT(APPEALS) RESTRICTED THE DISALLOWANCE @ 30% OF THE TOTAL SUB - CONTRACTS EXPENSES OF RS.66,64,466/ - I.E. AT RS.19,99,339/ - WHEREBY THE ASSESSEE GOT PARTIAL RELIEF. 7. AT THE TIME OF HEARING BEFORE US THROUGH E - COURT, THE LD. AR OF THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER OF TRIBUNAL IN ITA NO.187/NAG/2017 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 5 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 WHEREIN THE VERY 263 ORDER PASSED BY THE LD. COMMISSIONER WAS QUASHED BY THE TRIBUNAL. IT IS THE CONTENTION OF THE LD. AR THAT SINCE VERY BASIS OF THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.263 OF THE ACT IS QUASHED, THEREFORE, ASSESSMENT DOES NOT HAVE ANY LEGS TO STAND. 8. T HE LD. DR FAIRLY CONCEDED TO THE SE STATEMENT S OF FACTS. 9. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE FIND THAT IN THE ASSESSMENT ORDER WHICH WAS FRAMED U/S.143(3) R.W.S.263 OF THE ACT, ADDITION OF RS.66,64,466/ - WAS MADE BY THE ASSESSING OFFICER AND THE LD. CIT( APPEALS) RESTRICTED THE DISALLOWANCE @ 30% OF THE SAID AMOUNT I.E. RS.19,99,339/ - . NOW , WE ALSO FIND THE TRIBUNAL IN ITA NO.187/NAG/2017 (SUPRA.) HAS QUASHED THE 263 ORDER ITSELF AND THEREFORE, THE ASSESSMENT FRAMED ON THE BASIS OF 263 ORDER OF THE LD. COM MISSIONER LOOSES ITS VERY BASIS AND THEREFORE CANNOT SUSTAIN LEGALLY . MEANING THEREBY, ANY ADDITION CONSEQUENT THEREOF IN SUCH ASSESSMENT ALSO GETS DELETED. WE ORDER ACCORDINGLY. 10. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.96/NAG/2018 IS DISMISSED . ITA NOS. 224 TO 226/NAG/2018 A.YS.2009 - 10 & 2010 - 11 11. IN ALL THESE APPEALS FILED BY THE REVENUE ARE AGAINST THE DELETION OF PENALTY IMPOSED U/S.271F OF THE ACT. SECTION 271F SPELLS OUT THAT IF A PERSON WHO IS REQUIRED TO FURNISH A RETURN OF HIS INCOME, AS REQUIRED UNDER SUB SECTION (1) O F SECTION 139 OR BY THE PROVISO TO THAT SUB SECTION, FAILS TO FURNISH 6 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 SUCH RETURN BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER MAY D IRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY, A SUM OF FIVE THOUSANDS RUPEES. IN ALL THESE CASES, THE FACTS REMAIN UNDISPUTED THAT RETURN WAS NOT FILED WITHIN THE SPECIFIED TIME WHICH THEREFORE ATTRACTED THE PENALTY U/S.271F OF THE ACT. HOWEVER, IN ALL THESE CASES, THE LD. CIT(APPEALS) HAS PROVIDED RELIEF TO THE ASSESSEE AS PER SECTION 273B OF THE ACT BY HOLDING THAT THE ASSESSEE HAS PROVED THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO FURNISH RETURN IN DUE TIME AND WHICH FAILURE CANNOT BE ATTRIB UTED TO ANY DELIBERATE INTENTION OR ACT OF THE ASSESSEE. RATHER, HE WAS COMPELLED BY CIRCUMSTANTIAL FACTORS FOR SUCH DELAY IN FILING RETURN OF INCOME. 12. THE REVENUE IS THEREFORE AGGRIEVED AND HAS PREFERRED THESE APPEALS BEFORE US. 13. WE HAVE PERUSED T HE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS ARRIVED AT BY THE LD. CIT(APPEALS) IN ALL THESE CASES. THAT FACTS CLEARLY DEMONSTRATE S THE DELAY IN FILING RETURN WAS ABSOLUTELY UNINTENTIONAL A N D DUE TO CIRCUMSTANTIAL FACTORS. THE ASSESSEE HAS ALL THROUGHOUT ACTED BONA - FIDE. THE REASONABLE CAUSE HAS BEEN WELL EXAMINED BY THE FIRST APPEL LATE AUTHORITY IN THE ORDER PASSED UNDER SECTION 271F R.W.S 273 B OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY INF IRMITY WITH THE FINDINGS GIVEN IN THE RESPECTIVE ORDERS OF THE LD. CIT(APPEALS) AND RELIEF PROVIDED THEREIN TO THE ASSESSEE IS HEREBY SUSTAINED. 7 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 14. IN THE RESULT, APPEALS OF THE REVENUE IN ITA NOS.224 TO 226/NAG/2018 ARE DISMISSED . 15. IN THE COMBINED RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED . ORDER PRO NOUNCED ON 15 TH DAY OF OCTOBER , 201 9 . SD/ - SD/ - D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 15 TH OCTOBER, 2019. SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, NAGPUR. 4. THE PR. CIT - 1, 2, 3 , NAGPUR . 5. THE CIT(APPEALS) - 3, NAGPUR. 6 . , , / DR, ITAT, NAGPUR. 7 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 8 ITA NO. 96 /NAG /20 18 ITA NOS.224 TO 226/NAG/2018 A.YS 2009 - 10 & 2010 - 11 DATE 1 DRAFT DICTATED ON 15 . 10 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 15 .10 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER