M/s. Unique Enterprise, Surat V. The ACIT, Circle-9, Surat

ITA 2746/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5780 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 194C; 139

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.2746/AHD/2014 / ASSTT. YEAR: 2005-2006 M/S.UNIQUE ENTERPRISE 62, KALIDAS NAGAR, L.H. ROAD SURAT 395 006. PAN : AABFU 4948 A VS. ACIT, CIR.9 SURAT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI DHARAMVIR YADAV, SR.DR ! / DATE OF HEARING : 27/04/2017 '#$ ! / DATE OF PRONOUNCEMENT: 01/06/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-V, SURAT DATED 5.8.2014 PASSED FOR THE AS STT.YEAR 2005-06. 2. ASSESSEE HAS TAKEN THREE GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) H AS ERRED IN UPHOLDING ADDITION OF RS.2,13,524/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. ITA NO2746 /AHD/2014 2 3. IN RESPONSE TO THE NOTICE OF HEARING, ADJOURNMEN T APPLICATION WAS FILED ON BEHALF OF THE ASSESSEE. HOWEVER, AFTER CO NSIDERING SMALLNESS OF THE ISSUE WE DID NOT GRANT ADJOURNMENT TO THE ASSES SEE AND PROCEED TO HEAR THE APPEAL EX PARTE QUA THE ASSESSEE. 4. A PERUSAL OF THE RECORD WOULD INDICATE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSTT.YEAR 2005-06 ON 28.6.2015 DECLARING TOTAL INCOME OF RS.6,43,486/-. THE CASE OF THE ASS ESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. A PERUSAL OF THE RECORD REVEALED THAT THE ASSESSEE HAS DEDUCTED TDS UNDER SECTION 194C OF THE ACT ON VARIOUS PAYMENTS. HOWEVER, IT D ID NOT MAKE PAYMENTS OF THOSE AMOUNTS BEFORE END OF THE ASSESSM ENT YEAR. THE ASSESSEE HAD PAID AMOUNTS BEFORE FILING OF THE RETU RN. 5. THE AO HAS NOTICED THAT DUE DATE FOR PAYMENT AND THE DATE ON WHICH ACTUAL PAYMENT WAS MADE. DUE DATES FOR PAYME NTS WERE 7.1.2005, 7.2.2005, 7.11.2004, 7.12.2004 AND PAYMEN TS WERE MADE IN THE MONTHS OF APRIL AND MAY, 2005. ACCORDINGLY, THE LD.AO DISALLOWED THE CLAIM OF THE ASSESSEE AND MADE ADDITION OF RS.2 ,13,524/-. 6. ON APPEAL, THE ASSESSEE HAS CONTENDED THAT THERE WERE AMENDMENTS IN SECTION 40(A)(IA) OF THE ACT BY FINAN CE ACT, 204, FINANCE ACT, 2008 AND FINANCE ACT 2010. ACCORDING TO THESE AMEMDMETNS, IF AN ASSESSEE HAS MADE PAYMENT BEFORE DUE DATE OF FILING OF RETURN THEN DEDUCTION WOULD BE ALLOWED TO THE ASSESSEE. THELD.CIT(A) HAS CONSIDERED THIS ASPECT LUCIDLY, BU T OBSERVED THAT THE AMENDMENT WAS NOT APPLICABLE WITH RETROSPECTIVE EFF ECT. WE FIND THAT VIEW FORMED BY THE LD.CIT(A) IS CONTRARY TO THE DEC ISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. ROYAL BUILDERS, 40 TAXMANN.COM 464 (GUJ). THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THIS CASE READS AS UNDER: ITA NO2746 /AHD/2014 3 REVENUE IS IN APPEAL AGAINST THE JUDGMENT OF THE I NCOME TAX APPELLATE TRIBUNAL, AHMEDABAD ['TRIBUNAL' FOR SHORT] DATED 29 TH DECEMBER 2011 RAISING FOLLOWING QUESTION FOR OUR CONSIDERATION : 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE HON'BLE ITAT HAS ERRED IN DELETING THE ADDITION OF RS. 1,74 ,44,7647- MADE BY THE AO U/S. 40(A)(IA) AND SUSTAINED BY THE LD CIT (A) WITHOUT APPRECIATING THE AMENDMENT CARRIED OUT BY T HE FINANCE ACT 2010 WITH RETROSPECTIVE EFFECT FROM A.Y. 2010-1 1 CANNOT BE HELD TO BE RETROSPECTIVE FROM A.Y. 2005-06?' 2. ISSUE PERTAINS TO DEDUCTION OF TAX AT SOURCE, WH ICH THE ASSESSEE DID DEDUCT, AS REQUIRED BEFORE 31ST MARCH 2006. THE SAM E WAS, HOWEVER, DEPOSITED WITH THE REVENUE ON 30TH MAY 2006. WE ARE CONCERNED WITH THE ASSESSMENT YEAR 2006-07. REVENUE CONTENDS THAT SUCH DEPOSIT OF THE TAX AT SOURCE WAS BEYOND THE TIME PRESCRIBED AN D THEREFORE, PROVISION OF SECTION 40[A](IA) OF THE ACT WOULD APP LY. 3. THE TRIBUNAL, HOWEVER, RULED IN FAVOUR OF THE AS SESSEE RELYING ON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN CASE OF H.S MOHINDRA TRADERS V. ITO [2011] 44 SOT 43 (URO) (DELHI). 4. COUNSEL FOR THE REVENUE CANDIDLY POINTED OUT THA T SUCH DECISION OF THE TRIBUNAL IN CASE OF H.S MOHINDRA TRADERS CASE ( SUPRA) WAS CARRIED IN APPEAL BY THE REVENUE BEFORE THE DELHI HIGH COURT. THE DELHI HIGH COURT DISMISSED THE REVENUE'S APPEAL, MAKING FOLLOW ING OBSERVATIONS : THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE IN THE MONTH OF MARCH, 2007 FOR THE EXPENDITURE INCURRED IN FEBRUARY 2007, BUT THE SAME WAS DEPOSITED WITH THE INCOME TAX DEPARTMENT IN APRIL 2 007 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 CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE INCOME TAX APPELLATE TRIBUNAL [HEREINAFTER REFERRED TO AS, 'TH E TRIBUNAL'] HAS RIGHTLY INTERPRETED THE PROVISION OF SECTION 40 (A)IA) AND PARTICULARLY, SUB- CLAUSE (A) THEREOF WHICH CLEARLY GIVES THE TIME TO THE ASSESSEE TO DEPOSIT THE TDS ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. THE ENTIRE CASE SOUGHT TO B E MADE IN THIS APPEAL IS THAT THE TRIBUNAL WRONGLY RELIED UPON THE AMENDM ENT WHICH CAME INTO EFFECT FROM 1.04.2010. THIS IS CLEARLY ERRONEO US IN AS MUCH AS SECTION 40(A)(IA) WAS AMENDED BY THE FINANCE ACT, 2 008 WITH EFFECT FROM 01.05.2005 WHEREBY THE WORDS 'ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139' WAS SU BSTITUTED BY THE WORDS, 'HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR THE TIME PRESCRIBED UNDER SUB-SECTI ON (1) OF SECTION 200' OF THE ACT. WE, THUS, FIND NO MERIT IN THIS AP PEAL. THIS APPEAL IS ACCORDINGLY DISMISSED. ITA NO2746 /AHD/2014 4 5. WE ARE BROADLY IN AGREEMENT WITH THE VIEW EXPRES SED BY THE DELHI HIGH COURT. THE ISSUE BEING IDENTICAL, THE PRESENT TAX APPEAL IS ALSO DISMISSED.: 7. THE ASSESSEE HAS ALSO MADE PAYMENTS BEFORE DUE D ATE OF FILING OF RETURN. THEREFORE, THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT IS NOT SUSTAINABLE IN THE CASE OF THE ASSESSEE. RESPE CTFULLY FOLLOWING JUDGMENT OF THE HONBLE GUJARAT HIGH COURT, WE ALLO W THE APPEAL OF THE ASSESSEE AND DELETE DISALLOWANCE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 1 ST JUNE, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/06/2017