Income Tax Officer, Ward-1, Tuni V. Manikanta Finance Corporation, , Tuni

ITA 28/VIZ/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2531 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 23-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: TDS
• Section: 143(3); 40(a)(ia); 143(1); 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO. 28 / VIZ /201 9 (ASST. YEAR : 20 07 - 0 8 ) ITO, WARD - 1, TUNI. V S . M/S. MANIKANTA FINANCE CORPORATION, SHOP NO. 89, MUNICIPAL COMPLEX, GADDIBAZAR, TUNI PAN NO. AALFS 6061 Q (APPELLANT) (RESPONDENT) C.O.NO. 40/VIZ/2019 (ARISING OUT OF ITA NO. 28 / VIZ /201 9) (ASST. YEAR : 20 07 - 08 ) M/S. MANIKANTA FINANCE CORPORATION, SHOP NO. 89, MUNICIPAL COMPLEX, GADDIBAZAR, TUNI VS. ITO, WARD - 1, TUNI. PAN NO. AALFS 6061 Q (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADV OCATE . DEPARTMENT BY : SMT. SUMAN MALIK SR. DR DATE OF HEARING : 12 / 0 6 /201 9 . DATE OF PRONOUNCEMENT : 21 / 0 6 /201 9 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER TH IS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 21 / 1 0/201 8 FOR THE ASSESSMENT YEAR 200 7 - 0 8 . 2 ITA NO. 28 /VIZ/2019 & C.O.NO.40/VIZ/2019 (M/S. MANIKANTA FINANCE CORPORATION ) 2. THIS APPEAL IS BARRED BY LIMITATION BY 02 DAYS. THE REVENUE HAS FILED AN AFFIDAVIT FOR NON - FILING THE APPEAL IN TIME. WE FIND THAT THERE IS A SUFFICIENT CAUSE FOR NON - FILING OF THE APPEAL IN TIME, THEREFORE, THE DELAY IN FILING THE APPEAL IS HEREBY CONDONED. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS A FIRM, FILED ITS RETURN OF INCOME BY ADMITTING TOTAL LOSS OF RS. 3,11,903/ - . THE CASE OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) AND AFTER FOLLOWING DUE PROCEDURE, ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'ACT') . THEREAFTER, A NOTICE UNDER SECTION 148 WAS ISSUED AND THE CASE WAS REOPENED AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT ON 30/03/2014 . IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE MADE INTEREST PAYMENTS OF RS. 15,41,694/ - OUT OF WHICH RS. 47,234/ - PERTAINS TO PAYMENTS BELOW RS. 5,000/ - . HOWEVER, THE ASSESSEE DID NOT DEDUCT TAX ON THE PAYMENTS OF RS.14,94,465/ - WHICH ATTRACTS T DS PROVISIONS . WHEN THIS WAS PUT TO THE ASSESSEE, THE ASSESSEE REPLIED THAT PAYEES SOUGHT NON - DEDUCTION OF TAX BY FILING FORMS 15G AND AS SUCH IT DID NOT DEDUCT TAX. THE AR OF THE ASSESSEE FILED COPY OF CERTIFICATE OF POSTING OF FORM 15G FORWARDED TO THE LD. COMMISSIONER , RAJAHMUNDRY , HOWEVER, HE DID NOT SUBMIT ACKNOWLEDGMENT 3 ITA NO. 28 /VIZ/2019 & C.O.NO.40/VIZ/2019 (M/S. MANIKANTA FINANCE CORPORATION ) OBTAINED FROM THE COMMISSIONERS OFFICE IN SUPPORT OF ITS CLAIM THAT IT HAD FILED A COPY OF THE SAID FORMS. MERE FILING OF COPY OF CERTIFICATE OF POSTING DOES NOT FULFIL THE REQUIREMENT OF THE ACT. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HAS FOUND TH A T THERE IS NO MERIT IN THE EXPLANATION OF THE ASSESSEE. ACCORDINGLY, AN AMOUNT OF RS. 14,94,465/ - DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. 4 . ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE HAS OBTAINED REQUISITE FORM 15G FROM THE RESPECTIVE PAYEES TO WHOM THE INTEREST PAID ABOVE RS. 5,000/ - . WHEN THE PAYE E S HAD GIVEN SUCH FORMS DECLARING THAT THEY HAVE NO TAXABLE INCOME, THE ASSESSEE WAS DUTY BOUND TO NOT TO DEDUCT ANY TAX. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD DULY FORWARDED THE FORMS TO THE JURISDICTIONAL COMMISSIONER ALONG WITH COVERING LETTER . COP IES OF THE COVERING LETTER, CERTIFICATE OF POSTING FOR FILING THE FORMS AND FORMS 15G IN RESPECT OF CREDITORS WERE FILED BEFORE THE ASSESSING OFFICER , THESE DOCUMENTS SUPPORT THE FACT OF SUBMITTING F ORMS 15G BEFORE THE LD. COMMISSIONER , THEREFORE THE ASSESSING OFFICER IS NOT JUSTIFIED IN DENYING THE CLAIM OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. HE ALSO RELIED O N THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF MALLINENMI BABULU (HUF) VS. ITO IN ITA NO.1326/HYD/2014 AND ALSO THE DECISION OF THE ITAT, 4 ITA NO. 28 /VIZ/2019 & C.O.NO.40/VIZ/2019 (M/S. MANIKANTA FINANCE CORPORATION ) VISAKHAPATNAM IN THE CASE OF PIONEER FINANCE VS. PR.CIT IN ITA NO. 459/VIZ/2016, DATED 20/12/2017 . THE LD. CIT(A) AFTER CONSIDERING THE ABOVE DECISION S , ALLOWED THE APPEAL OF THE ASSESSEE. 5 . ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THIS TRIBUNAL. 6 . LD. DEPARTMENTAL REPRESENTATIVE STRONGLY PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER, WHEREAS LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 7 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 8 . THE ONLY ISSUE BEFORE US IS NON - DEDUCTION OF TDS IN RESPECT OF PAYMENT MADE BY THE ASSESSEE ABOVE RS. 5,000/ - AMOUNTING TO RS. 14,94,465/ - . TH E CASE OF THE ASSESSEE IS THAT HE HAS RECEIVED FORMS 15G FROM THE PAYEES AND THE SAME WERE FORWARDED TO THE LD.COMMISSIONER, RAJAHMUNDRY, THEREFORE HE HAS NOT DEDUCTED ANY TAX AT SOURCE . THE ASSESSING OFFICER CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE FAILED TO FILE THE ACKNOWLEDGEMENTS FROM THE OFFICE OF THE LD.COMMISSIONER IN RESPECT OF RECEIPT OF FORM 15G , HENCE, ADDITION IS MADE. THE ASSESSEE HAS FILED ALL THE DETAILS BEFORE THE LD. CIT(A) AS WERE FILED BEFORE THE ASSESSING OFFICER. THE RELEVANT 5 ITA NO. 28 /VIZ/2019 & C.O.NO.40/VIZ/2019 (M/S. MANIKANTA FINANCE CORPORATION ) DOCUMENTS HAVE BEEN PLACED BEFORE THE TRIBUNAL ALSO. THE LD.CIT(A) BY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO BY FOLLOWING THE DECISION OF THE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF PIONEER FINANCE (SUPRA) , DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER : - 5.3. I HAVE CONSIDERED THE ABOVE SUBMISSIONS MADE BY THE A.O. AND THE APPELLANT. THE ISSUE TO DECIDE IS WHETHER THE DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME - TAX ACT, 1961 MADE BY THE AO IS REASONABLE AND JUSTIFIED OR NOT. TAKING INTO CONSIDERATION THE DECISION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM IN THE CASE OF PIONEER FINA NCE VS. PR.COMMIS S IONER OF INCOME TAX IN ITA NO. 459/V/2016 ORDER DATED 20/12/2017 IN WHICH THE FACTS OF THE CASE ARE SIMILAR TO THE FACTS OF THE PRESENT APPEAL AND BY FOLL O WING THE SAID DECISION OF THE HON'BLE ITAT, VISAKHAPATNAM CITED (SUPRA), I HEREBY D IRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE OF RS. 14,94,455/ - U/S 40(A)(IA) OF THE INCOME - TAX ACT, 1961 ON THE INTEREST PAYMENTS MADE BY THE APPELLANT . IN THE RESULT, THE APPEAL MADE BY THE APPELLANT ON THIS GROUND IS HEREBY ALLOWED. 9 . WE FIND THAT THE LD. CIT(A) BY CONSIDERING ALL THE DETAILS AND ALSO BY FOL L O W ING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN PIONEER FINANCES CASE (SUPRA) , DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). THUS, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. 10 . SO FAR AS C.O. FILED BY THE ASSESSEE IS CONCERNED, WHICH IS ONLY SUPPORTIVE TO THE ORDER OF TH E LD. CIT(A). AS THE ASSESSEE HAS NO GRIEVANCE AGAINST THE ORDER OF THE LD. CIT(A), THE C.O. FILED 6 ITA NO. 28 /VIZ/2019 & C.O.NO.40/VIZ/2019 (M/S. MANIKANTA FINANCE CORPORATION ) BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND IS DISMISSED ACCORDINGLY . 1 1 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 1 S T DAY OF JUNE , 201 9 . S D / - S D / - ( D.S. SUNDER SINGH ) ( V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 1 S T JUNE , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE M/S. MANIKANTA FINANCE CORPORATION, SHOP NO. 89, MUNICIPAL COMPLEX, GADDIBAZAR, TUNI . 2. THE REVENUE ITO, WARD - 1, TUNI. 3. THE PR. CIT - 2, VISAKHAPATNAM. 4. THE CIT(A) - 2, VISAKHAPATNAM . 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.