SONA RICE INDUSTRIES, Nagpur V. CIT-IV, Nagpur

ITA 276/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1654 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: R S GUPTA
• Section: 263

Judgement Text

1 ITA NO. 276/NAG/2014 . IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. N O.276 /NAG/2014 ASSESSMENT YEAR : 200 9 10 . SONA RICE INDUSTRIES, COMMISSIONER OF INCOME TAX IV C/O R.S. GUPTA, ADVOCATE, V/S. NAGPUR. 915, TIPRE GALLI, NEW ITWARI ROAD, NAGPUR 440002. PAN AAPFS1518Q. APPELLANT RESPONDENT. APPELLANT BY : SHRI R.S. GUPTA. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 02 09 - 2015. DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX IV, NAGPUR DATED 24 03 2014 PASSED UNDER SECTION 263 OF THE I.T. ACT AND PERTAINS TO ASSESSMENT YEAR 2009 10 . 2. IN THIS CASE THE LEARNED CIT OBSERVED THAT ON VERIFICATION OF CASE RECORDS IT WAS NOTICED THAT NO TAX HAS BEEN DEDUCTED AT SOURCE FROM INTEREST PAID AMOUNTING TO ` 5805/ AND 1,23,954/ . HENCE IN VIEW OF SECTION 40(A)(IA) THE 2 ITA NO. 276/NAG/2014 . ASSESSING OFFICER WAS REQUIRED TO DISALLOW INTEREST PAYMENT TOTALING ` 1,29,759/ . IN THIS REGARD LEARNED CIT NOTED THE FOLLOWING SUBMISSION OF THE ASSESSEE : AS REGARDS THE ISSUE OF NON DEDUCTION OF TAX AT SOURCE FROM INTEREST PAYMENTS TO SHRI SHANKAR JAMTANI (HUF) AND SMT. SATTABAI JAMTANI, THE ASSESSEE HAS STATED THAT THE ASSESSEE HAS NOT PAID INTEREST TO SHRI SHANKAR JAMTANI (HUF) BUT ON THE CONTRARY IT HAS CHARGED INTEREST FROM THE SAID HUF ON HIS DEBIT BALANCE. AS REGARDS INTEREST PAID TO SMT. SATTABAI JAMTANI, THE ASSESSEE STATED THAT IT HAS A DEPOSIT OF ` 10,32,948/ OF SMT. SATTABAI JAMTANI (NOW DECEASED) AND INTEREST OF ` 1,23,954/ WAS CREDITED TO HER ACCOUNT. THE ASSESSEE HAS NOT DEDUCTED T.D.S. ON INTEREST PAID TO HER AS SHE WAS 82 YEARS OLD AND HAD GIVEN A CONFIRMATION TO THE A SSESSEE THAT APART FROM INTEREST INCOME OF ` 1,23,954/ , SHE DOES NOT HAVE ANY TAXABLE INCOME. THE ASSESSEE FURTHER STATED THAT SMT. SATTABAI JAMTANI HAD GIVEN A DECLARATION IN FORM NO. 15H TO THE ASSESSEE. THE ASSESSEE QUOTED THE PROVISIONS OF SECTION 197A OF THE INCOME TAX ACT IN ITS FAVOUR AND CLAIMED THAT THE SAID AMOUNT OF ` 1,23,954/ PAID WITHOUT DEDUCTION OF TAX CANNOT BE DISALLOWED U/S 40(A)(IA) OF THE IN COME TAX ACT. 3. THE LEARNED CIT DID NOT ACCEPT THE ABOVE CONTENTION AND HELD AS UNDER: AS PROVIDED IN SECTION 197(1A), NO DEDUCTION OF TAX SHALL BE MADE IN CASE OF A PERSON, IF SUCH PERSON FURNISHES TO THE PERSON RESPONSIBLE FOR PAYING ANY INCOME OF THE NATURE REFERRED TO IN SECTION 194A, DECLARATION IN WRITING IN DUPLICATE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER TO THE EFFECT THAT THE TAX ON HIS ESTIMATED TOTAL INCOME OF THE PREVIOUS YEAR IN WHICH SUCH INCOME TO BE INCLUDED IN COMPUTING HIS TOTAL INCOME WILL BE NIL. FURTHER, AS PER THE PROVISIONS OF SECTION 197A(2), THE PERSON RESPONSIBLE FOR PAYING ANY INCOME OF THE NATURE REFERRED TO IN SUB SECTION (1A) SHALL DELIVER ONE COPY OF THE SAID DECLARATION TO THE CHIEF COMMISSIONER OF COMMISSIONER ON OR BEFORE THE 7 TH DAY OF THE MONTH NEXT FOLLOWING THE MONTH IN WHICH THE SAID DECLARATION IS FURNISHED. IT IS SEEN FROM THE COPY OF THE FORM 15H FURNISHED BY THE ASSESSEE DURING THE REVISIONAL PROCEEDINGS THAT THE ASSESSEE WAS IN RECEIPT OF THE SAID FORM ON 25/03/2009. ACCORDINGLY, THE SAID FORM WAS TO BE SUBMITTED TO THE 3 ITA NO. 276/NAG/2014 . DEPARTMENT ON OR BEFORE THE 07/04/2009. DURING THE COURSE OF HEARING, THE ASSESSEES COUNSEL WAS ASKED TO INFORM AS TO WHETHER THE FORM 15H OBTAINED FROM SMT. SATTABAI JAMTANI WAS SUBMITTED IN THE CITS OFFICE. THE COUNSEL INFORMED THAT HE HAS NO PROOF OF SUBMISSION OF FORM 15H WITH THE DEPARTMENT. AS THE ASSESSEE HAS FAILED TO PROVE SUBMISSION OF THE SAID FORM 15H TO THE DEPARTMENT , THE SHELTER OF SECTION 197(1A) OF TH E INCOME TAX ACT IS NOT AVAILABLE TO IT. AS SUCH, THE AO WAS REQUIRED TO INVOKE THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT AND DISALLOW THE SAID INTEREST PAYMENT OF ` 1,23,954/ MADE TO SMT. SATTABAI JAMTANI. AS THE AO HAS FAILED TO DO SO, THE ASSESSMENT ORDER DATED 30.10.2011 PASSED BY THE AO IS CONSIDERED ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE ACCORDINGLY LEARNED CIT DIRECTED THE ASSESSING OFFICER TO DISALLOW AND ADD TO THE ASSESSEES TOTAL INCOME THE AMOUNT OF ` 1,23,594/ UNDER SECTION 40(A)(IA) OF THE I.T. ACT. 3. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE LEARNED CIT HAS HELD THE ASSESSEE TO HAVE VIOLATED T HE PROVISIONS OF SECTION 197(2) INASMUCH AS THE ASSESSEE HAS NOT PRODUCED EVIDENCE FOR FURNISHING FORM N O. 15H OBTAINED FROM SMT. SATTABAI JAMTANI TO THE OFFICE OF LEARNED CIT. FOR THIS REASON LEARNED CIT HAS HELD THAT AS PER THE PROVISIONS OF SECTION 40( A)(IA) DISALLOWANCE WAS REQUIRED. WE FIND THAT LEARNED CIT HAS TOTALLY ERRED IN APPRECIATING THE PROVISIONS OF SECTION 197A IN THIS REGARD. SECTION 197A AND (1A) PROVIDES FOR SITUATIONS WHEREBY NO DEDUCTION OF TAX AT SOURCE IS REQUIRED WHEN THE ASSESSEE OBTAINS DECLARATION IN PRESCRIBED FORM FOR THE ASSESSEE. THIS IN THE PRESENT CASE HAS BEEN DONE BY THE ASSESSEE. NOW THE PROVISIONS OF SECTION 197(2) PROVIDE THAT SUCH DECLARATION HAS TO BE FURNISHED TO THE OFFI C E OF THE CIT IN A SPECIFIED TIME. FAILURE T O COMPLY WITH THE PROVISIONS OF SECTION 272A(2) MAY LEAD 4 ITA NO. 276/NAG/2014 . TO INVOCATION TO PENALTY PROVISION UNDER SECTION 272A(2F). BUT IT CANNOT BE HELD THAT IN SUCH SITUATION PROVISIONS OF SECTION 40(A)(IA) HAVE TO BE INVOKED. THUS WE FIND THAT LEARNED CITS ORDER IS BA SED UPON INCORRECT APPRECIATION OF LAW. HENCE WE HOLD THAT LEARNED CITS ORDER IS LIABLE TO BE QUASHED AND THE SAME IS QUASHED AS S UCH. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SE PT., 2015. SD/ SD/ (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 24 TH SEPT., 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE