The ITO, 3(2), Indore V. Shri Ashwin Mehta & Other, Indore

ITA 260/IND/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9829 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: AMIT CHOUDHARY CAS
• Keywords: Retrospective amendment; Question of law
• Section: 147; 148; 139; 143(3); 40(a)(ia)

Judgement Text

ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.260/IND/2017 ASSESSMENT YEAR 2008-09 REVENUE BY S HRI K.G. GOYAL , SR.DR ASSESSEE BY S/ SHRI MAHESH AGRAWAL & AMIT CHOUDHARY,CAS DA TE OF HEARING 1 1 . 12. 2018 DATE OF PRONOUNCEMENT 13 .1 2 .2018 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL IS FILED AT THE INSTANCE OF REVENUE PERTAINING TO ASSESSMENT YEAR 2008-09 AND IS DIREC TED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- I (IN SHORT LD.CIT(A)], INDORE DATED 02.12.2016 WHICH IS ARIS ING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHOR T THE ACT) DATED 10.12.2015 FRAMED BY ITO-3(2), INDORE. INCOME TA X OFFICER 3 ( 2 ), INDORE VS. SHRI ASHWIN MEHTA & OTHER SINGAPORE TOWNSHIP PROJECT, 12/1 NEW PALASIA, INDORE ( APPELLANT ) (RESPONDENT ) PAN NO. AAA AA9662P ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 2 2. REVENUE HAD RAISED FOLLOWING GROUNDS OF APPEAL; 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 62 ,30,000/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF WORK CONTRACT EXPE NSES U/S 40(A)(IA) OF THE I.T. ACT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) WAS JUSTIFIED IN IGNORING THE FACTS THAT THE TDS DE DUCTION ON THE EXPENSES OF RS.62,30,000/- WAS NOT DEPOSITED IN THE PRESCRIB ED TIMED LIMIT AS PER PROVISION OF THE I.T. ACT. 3. BRIEFLY STATED THE FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN ASSOCIATION OF PERSONS ENGAGED I N THE REAL ESTATE DEVELOPMENT. RETURN OF INCOME FILED ON 26.09.2008 DECLARING INCOME OF RS.8,93,860/-. CASE PICKED UP FOR SCRUTIN Y AND NOTICE U/S 143(2) OF THE ACT DULY SERVED UPON THE ASSESSEE AND ASSESSMENT COMPLETED U/S 143(3) OF THE ACT ON 21.12 .2010 ASSESSING INCOME AT RS.32,36,820/-. SUBSEQUENTLY THE CASE WAS REOPENED U/S 147 OF THE ACT BY ISSUANCE OF NOTICE U /S 148 OF THE ACT ON 23.03.2015 FOR THE ALLEGED DELAY IN DEPOSITI NG THE TAX DEDUCTED AT SOURCE AND MADE DISALLOWANCE U/S 40(A)( IA) OF THE ACT. IN REPLY TO THE NOTICE U/S148 OF THE ACT ASSESSEE F ILED RETURN OF INCOME. DURING THE COURSE OF REASSESSMENT PROCEEDI NGS IT WAS ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 3 OBSERVED THAT THE TAX DEDUCTED AT SOURCE AT RS.1,41 ,172/- ON THE CONTRACT EXPENSES OF RS.62,30,000/- WAS NOT DEPOSIT ED TILL THE END OF THE FINANCIAL YEAR 31.03.2008 WHICH WAS DUE TO B E PAID TILL 29 TH FEBRUARY,2008. DURING THE COURSE OF HEARING IT WAS SUBMITTED BY THE ASSESSEE THAT THE ALLEGED TAX DEDUCTED AT SOURC E AT RS.1,41,172/- HAS BEEN DEPOSITED ON 30.05.2008 I.E. BEFORE THE DUE DATE OF FILING OF INCOME TAX RETURN. HOWEVER LEARN ED ASSESSING OFFICER (IN SHORT LD. A.O) CONCLUDED THE REASSES SMENT PROCEEDINGS BY MAKING DISALLOWANCE OF RS.62,30,000/- U/S 40(A)( IA) OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE BEFORE THE DUE D ATE OF DEPOSIT AND ASSESSED INCOME AT RS.92,07,510/-. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD.CIT(A) AND SUCCEEDED AS LD.CIT(A) AFTER APPRECIATING THE F ACT THAT THE ALLEGED TAX DEDUCTED AT SOURCE HAS BEEN DULY DEPOSI TED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME TAX U/S 139( 1) OF THE ACT, THE ASSESSEE DESERVES TO SUCCEED AS THE ISSUE IS SQUARE LY COVERED BY VARIOUS JUDGMENTS INCLUDING THAT OF HON'BLE HIGH CO URT OF GUJARAT IN THE CASE OF CIT V/S ROYAL BUILDERS (2013) 40 TAX MANN.COM 464 (GUJARAT) AND JUDGMENT OF HON'BLE HIGH COURT OF DEL HI IN THE CASE OF ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 4 H.S. MOHINDRA TRADERS VS. INCOME TAX OFFICER (201 1) 44 SOT 43 (DELHI)(URO). 5. NOW AGGRIEVED REVENUE IS IN APPEAL BEFORE THE T RIBUNAL RAISING SOLE ISSUE CHALLENGING THE DELETION OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT AT RS.62,30,000/- . 6. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ISSUE RAISED BY THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING JUDGMENTS; (I) RAMESH ANAND VS. ITO 4(1), INDORE ITA NO.64/ IND/2018 (II) ITO WARD-2, INDORE VS. SHRI NARAYAN DAS GOYAL ITA NO.468/IND/2017 (III) CIT-1 VS. ANSAL LAND MARK TOWNSHIP (P) LTD (2 015) 61 TAXMANN.COM 45 (DELHI) (IV) RAJIV KUMAR AGRAWAL VS. ADDL CIT, RANGE-3, MAT HURA (2014) 45 TAXMANN.COM 555 (AGRA-TRIB.) (V) COMMISSIONER OF INCOME-TAX-1 VS. ROYAL BUILDERS (2013) 40 TAXMANN.COM 464 (GUJARAT) ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 5 (VI) H.S. MOHINDRA TRADERS VS. INCOME-TAX OFFICER ( 2011) 44 SOT 43 (DELHI)(URO) (VII) JIGNA CONSTRUCTION VS. INCOME TAX OFFICER (20 15) 60 TAXMANN.COM 228 (AHMEDABAD TRIB.) (VIII) DECISION OF THE CO-ORDINATE BENCH, INDORE IN THE CASE OF RAMESH ANAND V/S ITO, 4(1), INDORE I.T.A.NO.64/IND/ 2018 ORDER DATED 27.11.2018. 7. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATIV E THOUGH SUPPORTED THE ORDERS OF LD.A.O BUT FAILED TO CONTRO VERT THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSE E THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSEESSEE BY VARI OUS DECISIONS AND JUDGMENTS. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUES GRIEVANCE REVOLVES ROU ND THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT WHICH HAS BEE N DELETED BY LD.CIT(A). THE ALLEGED DISALLOWANCE U/S 40(A)(IA) MADE BY LD.A.O FOR THE DELAY IN DEPOSITING OF TAX DEDUCTED AT SOUR CE AT RS.1,41,172/- ON THE CONTRACT EXPENSES OF RS.62,30, 000/-. THERE ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 6 IS NO DISPUTE AT THE END OF BOTH THE PARTIES THAT T HE TAX DEDUCTED AT SOURCE AT RS.1,41,172/- THOUGH NOT DEPOSITED UP TO THE DUE DATE FOR DEPOSIT I.E. 29.2.2008 BUT IT FINALLY STANDS DE POSITED ON 30.05.2008 WHICH IS WELL BEFORE THE DUE DATE OF FIL ING OF RETURN OF INCOME U/S 139(1) OF THE ACT FOR ASSESSMENT YEAR 20 08-09.. 9. IN THESE GIVEN FACTS WHETHER THE LD. ASSESSING O FFICER WAS JUSTIFIED IN MAKING DISALLOWANCE U/S 40(A)(IA) OF T HE ACT, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENTS OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT V/S ROYAL BUILDERS (2013) 40 TAXMANN.COM 464 (SUPRA) WH EREIN THE HON'BLE HIGH COURT ADJUDICATING SIMILAR ISSUE FOR D ISALLOWANCE U/S 40(A)(IA) OF THE ACT, WHEREIN THE TAX DEDUCTED AT S OURCE WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF INCOME, HON'BLE COURT CONFIRMED THE VIEW TAKEN BY THE TRIBUNAL WHICH FOLL OWED THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF H.S. MOHINDRA TRADERS V/S ITO (2011) 44 SOT 43 OBSERVING AS FOLLOWS; 4. COUNSEL FOR THE REVENUE CANDIDLY POINTED OUT TH AT SUCH DECISION OF THE TRIBUNAL IN CASE OF HS MOHINDRA TRADERS CASE (SUPRA ) W S CARRIED IN APPEAL BY THE REVENUE BEFORE THE DELHI HIGH COURT. THE DELHI HIGH COURT DISMISSED THE REVENUE'S APPEAL, MAKING FOLLOWING OB SERVATIONS :_ ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 7 'THE ASSESSEE HAD DEDUCTED JE TAX AT SOURCE IN THE MONTH OF MARCH, 2007 FOR THE EXPENDITURE INCURRED IN FEBRUARY 2007, B T THE SAME WAS DEPOSITED WITH THE INCOME TAX DEPARTMENT IN APRIL 2007 I.E., MUCH BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE INCOME TAX ACT FOR FILING THE RETURN. IN THESE CIRCUMSTA:1CES, WE ARE OF THE OPINION THAT THE INCOME TAX APPELLATE TRIBUNAL [HEREINAFTER REFERRED TO AS, THE TRIBUNAL '] HAS RIGHTLY INTERPRETED THE PROVISION OF SECTION 40(A)IA) AND P ARTICULARLY, SUB- CIAUSE (A) THEREOF WHICH CLEARLY GIVES THE TIME TO THE ASS ESSEE TO DEPOSIT THE TDS ON OR BEFORE HE DUE DATE SPECIFIED IN SUB-SECTION ( 1) OF SECTION 139 OF THE ACT. THE ENTIRE CASE SOUGHT TO BE MADE IN THIS APPE AL IS THAT THE TRIBUNAL WRONGLY RELIED UPON THE AMENDMENT WHICH CAME INTO E FFECT FROM 1.04.2010. THIS IS CLEARLY ERRONEOUS IN AS MUCH AS SECTION 40(A)(IA) WAS AMENDED BY THE FINANCE ACT, 2008 WITH EFFECT FROM 0 1.05.2005 WHEREBY THE WORDS 'ON OR BEFORE THE D E DATE SPECIFIED IN S UB-SECTION (1) OF SECTION 139' WAS SUBSTITUTED BY THE WORDS, 'HAS NOT BEEN AI D DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200' OF THE ACT. WE, THUS, FIND NO MERIT IN THIS APPEAL. THIS APPEAL IS ACCORDINGLY DISMISSED . 5. WE ARE BROADLY IN AGREEMENT WITH THE VIEW EXPRES SED BY THE DELHI HIGH COURT. THE ISSUE BEING IDENTICAL, THE PRESENT TAX A PPEAL IS ALSO DISMISSED. 10. WE FURTHER FIND THAT IN ANOTHER DECISION OF THE CO-ORDINATE BENCH OF AHMEDABAD IN THE CASE OF JIGNA CONSTRUCTIO N VS ITO (2015) 60 TAXMANN.COM 228 (AHMEDABAD-TRIB.) SIMILAR ISSUE WAS ADJUDICATED AND DECIDED IN FAVOUR OF THE APPLICANT ASSESSEE ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 8 OBSERVING AS FOLLOWS; 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AN DULY CONSIDERED THE. FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. AS THE THINGS STAND NOW, IT IS NOT' IN DISPUTE, IN THE LIGHT OF A SERIES OF JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT, THA T THE AMENDMENT BROUGHT TO SECTION 40(A)(IA , WHICH HAS BEEN RELIED UPON BY THE ASSESSEE, IS ONLY CLARIFICATORY IN NATURE AND IT WILL ALSO AP PLY TO THE ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEARS 2010-11 AS WELL . IN THE CASE OF CIT V. OMPRAKASH R. CHADHURY [ITA NO. 412 OF 2013, DATED 2 2-11-2013] HON'BLE JURISDICTIONAL HIGH COURT HAS, INTER ALIA, OBSERVED AS FOLLOWS: ' ... CONSIDERING RELEVANT LEGISLATIVE CHANGES MADE BY THE PARLIAMENT FROM TIME TO TIME AND SOME OF THE DECISIONS RELEVANT TO CONSIDER THE QUESTION OF RETROSPECTIVITY RAISE IN THESE PRESENT APPEALS, THE FOCAL QUESTION, THEREFORE, WOULD BE WHETHER THE AMENDMENT BROUGHT ABOUT BY WAY OF FINANCE ACT, 2010 IN SECTION 40(A)(IA) WITH EFFECT FROM LST APRI L 2010 COULD BE SAID TO BE CLARIFICATORY IN NATURE FOR ATTENDING TO UNINTENDED CONSEQUENCES, AND, THEREFORE, IS HAVING RETROSPECTIVE EFFECT FROM 1 ST APRIL,2005 . **** ... FROM THE DISCUSSIONS HELD HEREINABOVE, WE ANSWE R THE SUBSTANTIAL QUESTION OF LAW RAISED IN THESE APPEALS IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE BY HOLDING THAT THE AMENDMENT M ADE IN 40(A)(AI), ON THE FACTS OF THIS CASE PARTICULARLY AS THE FACTUAL ETEMENTS EMBEDDED IN THE CONTENTIONS WERE NOT EVEN DISPUTED BY THE ASSESSING OFFICER. WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESS ING OFFICER TO GRANT THE RESULTANT RELIEF. ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 9 ******************* ******************* 11. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TER MS INDICATED ABOVE. 11. WE THEREFORE RESPECTFULLY FOLLOWING THE ABOVE J UDGMENTS AND DECISIONS AND IN THE GIVEN CIRCUMSTANCES OF THE CAS E ARE OF THE CONSIDERED VIEW THAT NO DISALLOWANCE U/S 40(A)(IA) WAS CALLED FOR AS THE TAX DEDUCTED AT SOURCE HAS BEEN DEPOSITED BEFOR E THE DUE DATE OF FILING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2012-13 AND THE AMENDMENT BROUGHT IN BY FINANCE ACT,2010 IN SECTION 40(A)(IA) WITH EFFECT FROM 1.4.2010 IS CLARIFICATORY IN NATUR E FOR ATTENDING THE UNINTENDED CONSEQUENCES AND THEREFORE IS HAVING RET ROSPECTIVE EFFECT FROM 1.4.2005, AS HAS BEEN HELD BY VARIOUS HON'BLE HIGH COURTS. WE THEREFORE FIND NO REASON TO INTERFERE IN THE FINDING OF LD.CIT(A) DELETING THE ADDITION OF RS.62,30,000/- MADE BY LD. A.O. GROUND NO.1 & 2 RAISED BY THE REVENUE DESERVES TO B E DISMISSED. 12. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ASHWIN MEHTA & OTHER ITA NO.260/IND/2017 10 THE ORDER PRONOUNCED IN THE OPEN COURT ON 13.12.20 18. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 13 DECEMBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE