Sukun Developers, Ahmedabad V. The Income tax Officer,Ward-4(2), Ahmedabad

ITA 2759/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6851 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND D.K. TYAGI, JUDICIAL MEMBER) ITA NO.2759/AHD/2010 [ASSTT. YEAR : 2007-2008] M/S. SUKUN DEVELOPERS SUMUN RESIDENCY OPP: SAHJANANAD COMPLEX NEW C.G. ROAD, CHANDKHEDA AHMEDABAD. PAN : ABBFS 5682 E VS. ITO (OSD) RANGE-9, AHMEDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI UMAIDSINGH BHATI REVENUE BY : SHRI RAJESH OJHA O R D E R PER BENCH: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD O UT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3 ) THE INCOME TAX ACT, 1961. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CON FIRMING THE DISALLOWANCE U/S.40(A)(IA) OF THE IT ACT, AMOUNTING TO RS.69,07,800/-. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE TAX DEDUCTED AT SOURCE WAS DULY DE POSITED BEFORE THE DUE DATE FOR FILING OF THE RETURN. THAT SECTION 40(A)( IA) HAS BEEN AMENDED BY THE FINANCE ACT, 2010 WHEREBY IF THE TAX DEDUCTED A T SOURCE IS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN, NO DIS ALLOWANCE UNDER THIS SECTION IS REQUIRED TO BE MADE. THAT VARIOUS BENCH ES OF THE ITAT HAVE HELD THAT THIS AMENDMENT IS CURATIVE IN NATURE AND THEREFORE WOULD HAVE ITA NO.2759/AHD/2010 -2- RETROSPECTIVE EFFECT. IN SUPPORT OF THIS CONTENTIO N, HE RELIED UPON THE DECISION OF THE MUMBAI BENCH OF THE ITAT IN THE CAS E OF BANSAL PARIVAHAN (INDIA) P. LTD. VS. ITO, 53 DTR (MUM)(TRI B) 40. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW. 4. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T THE MUMBAI BENCH OF THE ITAT IN THE CASE OF BANSAL PARIVAHAN (INDIA) P. LTD. (SUPRA) HELD AS UNDER: THE PROVISIONS OF S. 40(A)(IA) AS STOOD PRIOR TO T HE AMENDMENTS MADE BY THE FINANCE ACT, 2010 THUS WERE RESULTING INTO UNINTENDED CONSEQUENCES AND CAUSING GRAVE AND GENUINE HARDSHIPS TO THE ASSESSEE WHO HAD SUBSTANTIALLY COMPILED WITH THE RELEVANT TDS PROVIS IONS BY DEDUCTING THE TAX AT SOURCE AND BY PAYING THE SA ME TO THE CREDIT OF THE GOVERNMENT BEFORE THE DUE DATE OF FILING OF THEIR RETURNS UNDER S. 139(1). IN ORDER T O REMEDY THIS POSITION AND TO REMOVE THE HARDSHIPS WH ICH WAS BEING CAUSED TO THE ASSESSEE BELONGING TO SUCH CATEGORY, AMENDMENTS HAVE BEEN MADE IN THE PROVISIO NS OF S. 40(A)(IA) BY THE FINANCE ACT. 2010. THE SAID AMENDMENTS, THUS ARE CLEARLY REMEDIAL/CURATIVE IN NATURE. IN THE PRESENT CASE THE AMOUNT OF TDS FROM THE FREIGHT CHARGES DURING THE PERIOD 1 ST APRIL, 2005 TO 28TH FEB., 2006 WAS PAID BY THE ASSESSEE IN THE MON THS OF JULY AND AUGUST, 2006 I.E. WELL BEFORE THE DUE DATE OF TILING OF ITS RETURN OF INCOME. FOR THE YEAR UNDER CONSIDERATION. THIS BEING THE UNDISPUTED POSITION, THE DISALLOWANCE MADE BY THE AO AND CONFIRMED BY THE CIT(A) ON ACCOUNT OF FREIGHT CHARGES BY INVOKING TH E PROVISIONS OF S 40(A)(IA) IS NOT SUSTAINABLE AS PER THE AMENDMENTS MADE IN THE SAID PROVISIONS BY THE FINANCE ACT 2010 WHICH, BEING REMEDIAL/CURATIVE IN NATURE, HAVE RETROSPECTIVE APPLICATION. NO CONTRARY DECISION IS BROUGHT TO OUR KNOWLEDGE. WE THEREFORE RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE MU MBAI BENCH OF THE ITAT HOLD THAT THE AMENDMENT BY FINANCE ACT TO SECT ION 40(A)(IA) IS REMEDIAL/CURATIVE IN NATURE AND THEREFORE WILL HAVE RETROSPECTIVE APPLICATION. THEREFORE, IF THE ASSESSEE HAS DEPOSI TED TAX AT SOURCE BEFORE ITA NO.2759/AHD/2010 -3- DUE DATE OF FILING OF THE RETURN NO DISALLOWANCE UN DER THIS SECTION IS REQUIRED TO BE MADE. IT IS NOT DISPUTED THAT THE A SSESSEE HAS DULY DEPOSITED THE TAX DEDUCTED AT SOURCE BEFORE THE DUE DATE OF FILING OF THE RETURN. IN VIEW OF THIS, WE ALLOW THIS GROUND OF T HE ASSESSEE. 5. IN RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 15 TH APRIL, 2011 SD/- SD/- (D.K. TYAGI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 15-04-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD