SACHIN SHARMA , JSR V. ACIT CIR-3 , JSR

ITA 260/RAN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0616 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Keywords: Assessment record
• Section: 43B; 234B; 40(a)(ia); 194C; 144; 154

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO . 260 / RAN /201 7 ASSESSMENT YEAR : 2011 - 12 SRI SACHIN SHARMA, D.B. ROAD, MAYA BAZAR, JUGSALAI, JAMSHEDPUR VS. ACIT, CIRCLE - 3, JAMSHEDPUR PAN/GIR NO. ARNPS 4266 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI DEVESH PODDAR, ADV REVENUE BY : SHRI A.K.MOHANTY, JCIT DATE OF HEARING : 27 / 11 / 2018 DATE OF PRONOUNCEMENT : 30 / 11 / 2018 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), RANCHI, D ATED 14.8.2017 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT LD. CIT(A) WAS NOT JUSTIFIED IN PASSING AN EX - PARTE ORDER WITHOUT GIVING REASONABLE OPPORTUNITY OF HEARING. THE APPEAL WAS DISMISSED WITHOUT CONSIDERING THE MERITS OF THE CASE AND GROUNDS OF APPEAL SUBMITTED, AS SUCH, THE ACTION OF LD. CIT(A) IS ILLEGAL, UNJUSTIFIED AND UNCALLED FOR. 2. FOR THAT IN FACTS OF THE CASE LD. CIT(A) SHOULD HAVE CONSIDERED THE MERITS OF THE CASE. APPEAL WAS FILED AGAINST THE ORDER U/S 154. LD. A.O. WENT OUT OF THE WAY IN SUGGESTING ITA NO260/RAN/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 2 | 6 THAT THERE WAS A MISTAKE APPARENT FROM RECORD, AS SUCH, ORDER PASSED U/S 154 W AS ILLEGAL AND UNJUSTIFIED. 3. FOR THAT LD. A.O. HAS NOT SERVED ORDER PASSED U/S 154. FURTHER FROM SHOW CAUSE NOTICE ITS PRESUMED THAT ORDER U/S 154 WAS PASSED FOR MAKING ADDITION U/S 43(B) ON THE GROUND OF NON PAYMENT OF SERVICE TAX. THE SERVICE TAX STAN DS FULLY PAID BEFORE .DUE DATE FOR FILING OF RETURN. FURTHER ADDITION WAS MADE FOR NON DEDUCTION OF TDS IN JOB WORK. APPELLANT WAS NOT LIABLE FOR MAKING DEDUCTION U/S 194C, AS SUCH, NEITHER OF THE REASONS WERE MISTAKES APPARENT FROM RECORD. 4. FOR THAT THE ORDER WAS PASSED U/S 144 R.W.S. 143(3), AS SUCH, THE MISTAKE SAID TO HAVE BEEN APPARENT FROM RECORD IS INCORRECT. LD. A.O. ISSUED NOTICE U/S 154, TWO YEARS AFTER COMPLETION OF THE ASSESSMENT FOR LOOKING TO THE ASSESSMENT RECORD. THE ORDER PASSED U /S 154 WAS AB INITIO VOID ON MERITS AS THERE WERE NO VALID REASONS FOR ADDITION MADE. 5. THAT INTEREST U/S 234A AND 234B SHOULD HAVE BEEN CHARGED ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. . 3. IN THE INSTANT CASE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.9,60,672.97 RELATING TO SERVICE TAX BY INVOKING THE PROVISIONS OF SECTION 43B AND ALSO MADE ADDITION OF RS,.15,53,218 ON ACCOUNT OF JOB WORK CHARGES BY INVOKING THE PROVISIONS OF S ECTION 40(A)(IA) OF THE ACT IN A PROCEEDINGS WHICH WAS INITIATED U/S.154 OF THE ACT. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 4. BEFORE ME, LD AUTHORISED REPRESENTATIVE SUBMITTED THAT BOTH THE ISSUES ON WHICH ADDITION WAS MAD E BY THE ASSESSE WAS HIGHLY DEBATABLE AND, THEREFORE, WERE OUTSIDE THE JURISDICTION OF SECTION ITA NO260/RAN/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 3 | 6 154 OF THE ACT. HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF T. S. BALARAM V. VOLKART BROTHERS , 82 ITR 50 (SC) . 5. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. AFTER CONSI DERING THE RIVAL SUBMISSIONS, I FIND THAT THE ADDITIONS UNDER APPEAL WERE MADE IN A PROCEEDINGS INITIATED U/S.154 OF THE ACT. SECTION 154 ALLOWS RECTIFICATION OF A MISTAKE APPARENT FROM THE RECORD. THUS, AN ISSUE FOR ADJUDICATION OF WHICH INVESTIGATION OF FURTHER FACTS , WHICH IS NOT ON RECORD IS REQUIRED OR AN ISSUE ON WHICH TWO VIEWS ARE POSSIBLE ARE CLEARLY OUT OF THE AMBIT OF SECTION 154 OF THE ACT. 7. IN THE INSTANT CASE, IT IS OBSERVED THAT THE ASSESSING OFFICER OBSERVED THAT RS.9,60,672/ - HAS BEEN SHOWN AS OUTSTANDING LIABILITY ON ACCOUNT OF SERVICE TAX IN THE BALANCE SHEET AND FINDING THAT THERE WAS NO EVIDENCE AVAILABLE OF PAYMENT OF THE SAME WITH THE TIME LIMIT PRESCRIBED U/S.139(1) OF THE ACT, ADDED THE SAME TO THE INCOME OF THE ASSESSE IN VIEW OF THE PROVISIONS OF SECTION 43B OF THE ACT. IT IS AN ESTABLISHED POSITION THAT DIS ALLOWANCE U/S.43B CAN BE MADE OF AN AMOUNT WHICH HAS BEEN CLAIMED AS DEDUCTION BY THE ASSESSE. IN OTHER WORDS, WHEN DEDUCTION HAS NOT BEEN CLAIMED, ITA NO260/RAN/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 4 | 6 QUESTION OF MAKING DISALLOWANCE BY INVOKING THE PROVISION S OF SECTION 43B DOES NOT ARISE. 8. IN THE INSTANT CASE, NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SHOW THAT RS.9,60,672/ - AS SERVICE TAX EXPENDITURE WAS CLAIMED BY THE ASSESSE. THUS, DISALLOWANCE U/S.43B CAN BE MADE ONLY OF AN AMOUNT WHICH WAS A SUM PAYA BLE. THE RELEVANT LAW UNDER THE SERVICE TAX WAS PAYABLE ON CASH BASIS. NO MATERIAL IS AVAILABLE TO SHOW THAT THE LIABILITY OF RS.9,60,672/ - AS SERVICE TAX WAS INCURRED BEFORE THE END OF THE RELEVANT PREVIOUS YEAR U NDER THE SERVICE TAX LAW. IN THE CIRCUM STANCES, IN MY CONSIDERED VIEW, THE ADDITION OF RS.9,60,672/ - BY INVOKING THE PROVISIONS OF SECTION 43B IN A PROCEEDING U/S.154 OF THE ACT IS IMPERMISSIBLE. 9. FURTHER, THE ASSESSING OFFICER HAS OBSERVED FROM THE PROFIT AND LOSS ACCOUNT THAT A SUM OF RS.15,53,218/ - WAS DEBITED UNDER THE HEAD JOB WORK CHARGES. BY OBSERVING THIS, HE HELD THAT THE ASSESSE E WAS OBLIGED TO DEDUCT ITDS THEREON U/S.194C OF THE ACT AND CONSEQUENTLY, ADDED RS.15,53,218/ - ON THE GROUND TOF NON - DEDUCTION OF ITDS U/S.194C OF THE ACT. 10. A PERUSAL OF PROVISIONS OF SECTION 194C OF THE ACT SHOWS THAT A PERSON IS LIABLE TO DEDUCT ITDS WHEN A CONTRACT FOR WORK IS OF AN AMOUNT MORE THAN RS.30,000/ - OR WHERE PAYMENT FOR WORK IS MADE TO A PERSON MORE THAN RS.75,000/ - DURING THE FINANCIAL YEAR. T HE ITA NO260/RAN/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 5 | 6 ASSESSING OFFICER HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT EITHER OF THE ABOVE CONDITION WAS SATISFIED IN THE INSTANT CASE. THEREFORE, IT IS NOT OPEN TO THE ASSESSING OFFICER IN A PROCEEDINGS U/S.154 OF THE ACT TO HOLD THAT THE ASSESSE WAS OBLIGED TO DEDUCT ITDS ON JOB WORK AND CONSEQUENTLY, THE DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT IT OUTSIDE THE JURISDICTION OF SECTION 154 OF THE ACT. I, THEREFORE, DELETE BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER AND ALLOW THE GROUNDS OF APPEAL OF TH E ASSESSE. 11. IN THE RESULT, APPEAL OF THE ASSESSE IS ALLOWED. ORDER PRONOUNCED ON 30 / 11 /2018. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 30 / 11 /2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR.P VT. S ECRETARY, ITAT, RANCHI ON TOUR 1. THE APPELLANT : SRI SACHIN SHARMA, D.B. ROAD, MAYA BAZAR, JUGSALAI, JAMSHEDPUR 2. THE RESPONDENT. ACIT, CIRCLE - 3, JAMSHEDPUR 3. THE CIT(A) - JAMSHEDPUR 4. PR.CIT - JAMSHEDPUR 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY// ITA NO260/RAN/2017 ASSESSMENT YEAR : 2011 - 12 P A G E 6 | 6