Shri Omprakash Choudhary, Ahmedabad V. The Dy.CIT,(OSD), Circle-9, Ahmedabad

ITA 2794/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9963 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P PATEL
• Assessee Lawyers: P B PARMAR
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ ITA NO. 2794/AHD/2013 / ASSESSMENT YEAR : 2008-09 SHRI OMPRAKASH CHOUDHARY, 129/M, NEW CLOTH MARKET, OUTSIDE RAIPUR GATE, SARANGPURA, AHMEDABAD PAN : AAJPC 1167 H VS DCIT (OSD), CIRCLE-9, AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P. B. PARMAR, AR REVENUE BY : SHRI N.P. PATEL, SR. DR / DATE OF HEARING : 30/11/2016 / DATE OF PRONOUNCEMENT: 01/12/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, AHMEDABAD D ATED 11.10.2013 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. THE SOLE GROUND RAISED BY THE ASSESSEE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.1,94,920/- LEVIED BY A SSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT, 1961. 3. IN THIS CASE, IN THE MAIN APPEAL, THE DISALLOWAN CE WAS MADE U/S 40(A)(IA) OF RS.5,73,465/-. THIS WAS ON ACCOUNT OF NON-DEDUCTION OF TDS BY THE ASSESSEE ON INTEREST PAYMENT TO PARTIES. IT WA S HELD THAT THE ASSESSEE WAS SUPPOSED TO DEDUCT TAX U/S 194C OF THE IT ACT O N CREDIT/PAYMENT OF INTEREST MADE TO TWO COMPANIES. HOWEVER, THE ASSES SEE HAS NOT DEDUCTED SMC-ITA NO 2794/AHD/2013 SHRI OMPRAKASH CHOUDHARY VS. DCIT AY : 2008-2009 2 THE TDS; THEREFORE, FAILED TO COMPLY WITH THE STATU TORY PROVISIONS OF THE IT ACT. HENCE, DISALLOWANCE OF RS.5,73,465/- U/S 40(A )(IA) OF THE ACT WAS MADE. ON THIS DISALLOWANCE, IT WAS HELD THAT PAY MENT CLAIMED BY THE ASSESSEE WERE CLEARLY HIT BY THE PROVISIONS OF SECT ION 40(A)(IA) OF THE ACT. THAT THE ASSESSEE, HOWEVER, HAD FAILED TO INCLUDE T HE ABOVE AMOUNT IN ITS INCOME AND HENCE, PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED. 4. ON APPEAL, THE LD. CIT(A) ALSO CONFIRMED THE PEN ALTY. 5. AGAINST THE AFORESAID ORDER OF THE AUTHORITIES B ELOW, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RE CORDS. AS PER THE FACTS OF THE CASE, THE ASSESSEE HAS NOT DEDUCTED TD S ON INTEREST PAYMENTS. THE AUTHORITIES BELOW HAVE OPINED THAT THE TRANSACT ION WAS HIT BY SECTION 40(A)(IA) OF THE ACT AND BY NOT DISALLOWING THE SAM E IN ITS COMPUTATION OF INCOME, THE ASSESSEE HAS INVITED RIGORS OF PROVISIO N OF SECTION 271(1)(C) OF THE ACT. I FIND THAT THE DEDUCTION OF TDS ON PAYME NTS, WHICH HAVE BEEN ALREADY MADE, HAS BEEN HELD BY SEVERAL HIGH COURTS TO BE NOT NECESSARY. IT HAS BEEN HELD THAT ONLY WHERE THE PAYMENTS ARE OUTS TANDING, THEN THE PROVISIONS OF SECTION 40(A)(IA) CAN BE INVOKED IF T DS HAS NOT BEEN DEDUCTED. IN THESE CIRCUMSTANCES, THE DISALLOWANCE U/S 40(A)( IA) ITSELF IS DEBATABLE. IT CANNOT BE SAID THAT THE ASSESSEES CONDUCT OF NOT D ISALLOWING THE SAME ITSELF U/S 40(A)(IA) ATTRACTS THE PROVISION OF SECTION 271 (1)(C) OF THE ACT. PROVISION OF SECTION 271(1)(C) IS ATTRACTED FOR CONCEALMENT O F INCOME AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THESE PROVISIONS ARE NOT ATTRACTED IF THE ASSESSEES CONDUCT IS NOT FOUND TO BE CONTUMACIOUS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ASSESS EES CASE DOES NOT INVITE THE SMC-ITA NO 2794/AHD/2013 SHRI OMPRAKASH CHOUDHARY VS. DCIT AY : 2008-2009 3 RIGORS OF PENAL PROVISIONS U/S 271(1)(C) OF THE ACT . IN THESE CIRCUMSTANCES, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ELETE THE PENALTY. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST DECEMBER, 2016 AT AHMEDABAD. SD/- SHAMIM YAHYA (ACCOUNTANT MEMBER) AHMEDABAD; DATED 01/12/2016 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD