Inayat Roadlines & Co, Kolhapur V. Dy, CIT Cir-II Kolhapur, Kolhapur

ITA 241/PUN/2012

• Counselvise Citation: 24124514 RSA 2012
• Duration Of Justice: 3 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Revision of order
• Section: 143(3); 194C; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.241/PN/2012 (ASSESSMENT YEAR : 2006-07) INAYAT ROADLINES & CO., 719 E, 3 RD LANE, SHAHUPURI, KOLHAPUR. PAN : AAAFI3096C . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, KOLHAPUR. . RESPONDENT ASSESSEE BY : MR. M. K. KULKARNI DEPARTMENT BY : MR. A. K. MODI DATE OF HEARING : 11-02-2015 DATE OF PRONOUNCEMENT : 11-02-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX - II, KOLHAPUR (IN S HORT THE COMMISSIONER) DATED 02.03.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 02.12.2008 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE I NCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT Y EAR 2006-07. 2. IN THIS APPEAL, THE ASSESSEE HAD CHALLENGED THE ORDER OF THE COMMISSIONER ON MULTIPLE GROUNDS AS CONTAINED IN IT S MEMO OF APPEAL. SO HOWEVER, THE LD. REPRESENTATIVE FOR THE ASSESSEE MA DE A PRELIMINARILY PLEA THAT FOR THE PRESENT ASSESSEE WOULD BE SATISFIED IF THE DIRECTION OF THE COMMISSIONER TO THE ASSESSING OFFICER TO MAKE A FRE SH ASSESSMENT IS MODIFIED BY ALLOWING THE ASSESSEE AN OPPORTUNITY TO MAKE OUT A CASE IN THE REMANDED ASSESSMENT THAT THERE WAS NO OBLIGATION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE U/S 194C OF THE AC T IN RELATION TO THE ITA NO.241/PN/2012 IMPUGNED PAYMENTS. THE LD. CIT-DR HAS NO OBJECTION TO THE AFORESAID PLEA OF THE ASSESSEE. 3. IN ORDER TO APPRECIATE THE CONTROVERSY, WE MAY B RIEFLY TOUCH-UPON THE RELEVANT FACTS. THE ASSESSEE BEFORE US IS A PARTNE RSHIP FIRM ENGAGED IN THE BUSINESS OF TRANSPORTATION THROUGH ITS OWN TRUCKS A ND ALSO BY EMPLOYING TRUCKS FROM OUTSIDERS ON COMMISSION BASIS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED A RETURN OF INCOME DECLARIN G TOTAL INCOME OF RS.17,54,760/- WHICH WAS SUBJECT TO A SCRUTINY ASSE SSMENT U/S 143(3) OF THE ACT DATED 02.12.2008 WHEREBY THE TOTAL INCOME WAS D ETERMINED AT RS.21,30,340/- AFTER MAKING VARIOUS ADDITIONS OF RS .6,80,975/-. SUBSEQUENTLY, THE COMMISSIONER INVOKED HER REVISIONARY JURISDICTI ON U/S 263(1) OF THE ACT AND HER EXAMINATION OF THE RECORDS REVEALED THAT AS SESSEE HAD MADE PAYMENTS OF RS.2,30,48,210/- TO THE OUTSIDE TRUCK O WNERS ON WHICH NO TAX WAS DEDUCTED AT SOURCE AS REQUIRED BY SECTION 194C OF THE ACT. THEREFORE, ACCORDING TO THE COMMISSIONER, THE ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF THE REVEN UE WITHIN THE MEANING OF SECTION 263 OF THE ACT AS SUCH EXPENDITURE WAS NOT DISALLOWED U/S 40(A)(IA) OF THE ACT. AFTER ALLOWING THE ASSESSEE AN OPPORTUNIT Y OF BEING HEARD THE COMMISSIONER HAS FINALLY HELD AS UNDER :- 6. THE AO IS, THEREFORE, DIRECTED TO RE-EXAMINE TH E ENTIRE ISSUE OF CLAIM OF RS.2,30,48,210/- UNDER THE HEAD PAYMENT O N ACCOUNT TO OUTSIDE TRUCKS, IN LIGHT OF PROVISIONS OF SECTION 40(A)(IA ) R.W.S. 194C OF THE ACT, AND RE- DETERMINE THE SAME AS PER LAW AND PASS NECESSARY OR DERS. THE ASSESSMENT ORDER DATED 02.12.2008 IS, THEREFORE, SET-ASIDE WIT H A DIRECTION TO MAKE IT AFRESH, AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FURNISH ITS SAY IN THE MATTER. 4. IN THE AFORESAID CONTEXT, NOW WE HAVE CONSIDERED THE PRELIMINARILY PRAYER OF THE ASSESSEE AS NOTED ABOVE, WHICH HAS NO T BEEN OPPOSED BY THE LD. CIT-DR. THOUGH, THE AFORESAID PARA OF THE ORDE R OF THE COMMISSIONER REVEALS THAT THE ASSESSING OFFICER HAS BEEN DIRECTE D TO RE-EXAMINE THE ENTIRE ITA NO.241/PN/2012 ISSUE AND THEREAFTER RE-DETERMINE THE ENTIRE ISSUE OF THE PROVISIONS OF SECTION 40(A)(IA) R.W.S. 194C OF THE ACT, AS PER LAW. HOWE VER, THE LD. REPRESENTATIVE FOR THE ASSESSEE EXPLAINED THAT THE ASSESSING OFFIC ER OUGHT NOT TO BE GUIDED BY SOME FACT THAT THE COMMISSIONER HAS INVOKED SECT ION 263 OF THE ACT. 5. IN OUR CONSIDERED OPINION, THE DIRECTIONS OF THE COMMISSIONER ARE QUITE UNAMBIGUOUS. THE ASSESSING OFFICER SHALL DECIDE TH E APPLICABILITY OF SECTION 194C OF THE ACT IN THE CONTEXT OF THE IMPUGNED PAYM ENTS HAVING REGARD TO THE MATERIAL AND SUBMISSIONS PUT-FORTH BY THE ASSESSEE BEFORE HIM, AND ONLY THEREAFTER HE SHALL PASS AN ORDER IN ACCORDANCE WIT H LAW. THE ASSESSEE SHALL ALSO BE ENTITLED TO DEMONSTRATE THAT HOW THE PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABLE, HAVING REGARD TO THE FA CTS AND CIRCUMSTANCES OF THE CASE. WE THEREFORE MODIFY THE DIRECTIONS OF THE CO MMISSIONER TO THE ABOVE EXTENT. WE MAY HASTEN TO ADD HERE THAT OUR AFORESA ID DECISION TO MODIFY THE DIRECTIONS OF THE COMMISSIONER IS IN NO WAY ANY REF LECTION ON THE MERITS OF THE APPLICABILITY OR OTHERWISE OF THE PROVISIONS OF SEC TION 40(A)(IA) R.W.S. 194C OF THE ACT QUA THE IMPUGNED PAYMENTS. 6. IN THE RESULT, SUBJECT TO THE AFORESAID DIRECTIO NS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT AT THE CONCLUSION OF THE HEARING IN THE PRESENCE OF BOTH T HE PARTIES ON 11 TH FEBRUARY, 2015. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 11 TH FEBRUARY, 2015. SUJEET ITA NO.241/PN/2012 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-II, KOLHAPUR; 4) THE DR B BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE