Sagar Salt & Allied Industries, Bhavnagar V. The Income Tax Officer, TDS-4, Ahmedabad

ITA 2496/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8746 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 09-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P P VYAS
• Keywords: Rectification of order
• Section: 143(3); 201(1); 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2496/AHD/2014 / ASSESSMENT YEAR: 2007-08 SAGAR SALT & ALLIED INDUSTRIES, NEAR RAILWAY CROSSING, KUMBHARWADA, NARI ROAD, BHAVNAGAR-364001 PAN : AAWFS 2748 B VS. THE INCOME-TAX OFFICER, TDS-4, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.P. VYAS, AR REVENUE BY : SHRI MUDIT NAGPAL, SR DR / DATE OF HEARING : 02/08/2017 / DATE OF PRONOUNCEMENT: 02/08/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD. CIT(A)-XXI, AHMEDABAD DATED 14.07.2014 PASSED F OR ASSESSMENT YEAR 2007-08. 2. THOUGH THE ASSESSEE HAS TAKEN NINE GROUNDS OF AP PEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D. ASSESSING OFFICER HAS ERRED IN TAKING COGNIZANCE UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE THE ACT) AND MAKI NG ADDITIONS OF RS.18,113/- UNDER SECTION 201(1) OF THE ACT AND RS. 15,758/- UNDER SECTION 201(1A) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM, CARRYING ON BUSINESS OF MANUFACTURING AND TRADING OF SALT. IT H AS FILED ITS RETURN OF ITA NO. 2496/AHD/2014 SAGAR SALT & ALLIED INDUSTRIES VS. ITO FOR AY: 2007-08 2 INCOME ELECTRONICALLY ON 03.11.2007 DECLARING TOTAL INCOME AT RS. NIL. AN ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) R. W.S. 147 OF THE ACT ON 15.01.2013. IN THIS ASSESSMENT ORDER, LD. ASSESSIN G OFFICER HAS EXAMINED THE ISSUE REGARDING LABOUR CHARGES OF RS.9,03,883/-; HO WEVER, WHILE MAKING DISALLOWANCE, HE MADE THE DISALLOWANCE OF RS.60,911 /- WITH THE HELP OF SECTION 40(A)(IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE DID NOT DEDUCT THE TDS WHILE MAKING THE PAYMENTS TO THE LABOUR CON TRACTOR. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THIS ADDITION VIDE ORDER DATED 08.05.2015 P ASSED IN APPEAL NO.CIT(A)-6/137/12-13. 5. IT IS PERTINENT TO MENTION THAT MEANWHILE LD. AS SESSING OFFICER HAS ISSUED A NOTICE UNDER SECTION 153/155 OF THE ACT ON 23.05.2013. HE OBSERVED THAT, ON LABOUR CHARGES OF RS.9,03,883/-, TDS WAS N OT DEDUCTED AND, THEREFORE, WHEN AN ORDER UNDER SECTION 201(1) AND 2 01(1A) OF THE ACT WAS PASSED ON 28.03.2013, HE COMMITTED A MISTAKE FOR N OT CALCULATING THE TDS AMOUNT AS WELL AS INTEREST ON THIS LABOUR PAYMENTS. ACCORDINGLY, HE PASSED A RECTIFICATION ORDER AND RAISED A DEMAND OF RS.18, 113/- UNDER SECTION 201(1) OF THE ACT AND HE ALSO CHARGED INTEREST UNDE R SECTION 201(1A) OF THE ACT OF RS.15,758/- ON THIS AMOUNT. 6. APPEAL TO THE LD. CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 7. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. ONCE THE LD. CIT(A) HAS HEL D THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT TO THE LABOUR CONTRACTOR, RATHER I T HAS MADE PAYMENT DIRECTLY TO THE LABOURERS, THEN IT WAS NOT UNDER TH E OBLIGATION TO DEDUCT THE TDS. IF THE ASSESSEE WAS NOT UNDER THE OBLIGATION TO DEDUCT THE TDS ON SUCH PAYMENTS, HOW IT CAN BE HELD IN DEFAULT FOR THE PUR POSE OF SECTION 201(1) ITA NO. 2496/AHD/2014 SAGAR SALT & ALLIED INDUSTRIES VS. ITO FOR AY: 2007-08 3 AND 201(1A) OF THE ACT? MORE SO, THE POWER OF REC TIFICATION UNDER SECTION 154 OF THE INCOME TAX ACT CAN BE EXERCISED ONLY WHE N THE MISTAKE, WHICH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MI STAKE, WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRE D TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON PO INTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. IN THE PRESENT CA SE, IT WAS QUITE DEBATABLE WHETHER THE ASSESSEE HAS MADE THE PAYMENT S TO THE LABOURERS OR TO THE LABOUR CONTRACTOR. WITHOUT ADJUDICATING THIS ASPECT, THE ASSESSING OFFICER CANNOT HARBOUR A BELIEF THAT HE HAS COMMITT ED A MISTAKE BY NOT CALCULATING THE TDS AMOUNT ON SUCH PAYMENT. THEREF ORE, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 02/08/2017 BIJU T., SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ', / ITAT, AHMEDABAD