The ACIT,(OSD), Circle-9, Ahmedabad V. M/s. V.K. Patel & Co., Ahmedabad

ITA 281/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0633 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 30-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment

Judgement Text

ITA NO.2 81 /AHD/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO.2 81 /AHD/201 4 ASSESSMENT YEAR : 20 0 7 - 08 A.C.I.T. (OSD), CIRCLE 9, AHMEDABAD. . .... ..... .. ..... APPELLANT VS. V.K. PATEL & CO., . . ........... RESPONDENT 35/B, MUNICIPAL SERVANT S CO - OP. SOCIETY, NR. FOOTBALL GROUND, KANKARIA, AHMEDABAD 380 022. [A A C F V 2510 N ] APPEARANCES BY PRASOON KABRA FOR THE APPELLANT NONE FOR THE RESPONDENT HEARING CONCLUDED ON: 30 /0 8 / 20 16 ORDER PRON OUNCED ON : 31 /08/ 20 16 O R D E R PER PRAMOD KUMAR , AM: BY WAY OF THIS APPEAL THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE LEARNED CIT(A) S ORDER DATED 15 TH NOVEMBER, 2013 FOR THE A.Y. 2007 - 08, ON THE FOLLOWING GROUNDS : - 1 ( A) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.40,73,566/ - MADE UNDER SECTION 40(A)(IA) OF THE ACT. 1(B) THE LD . COMMISSIONER OF INCOME TAX (APPEALS) - XV, AHMEDABAD HAS ERRED IN L AW AND ON FACTS IN HOLDING THAT THE AMENDMENT INTRODUCED BY FINANCE ACT 2000 IN SECTION 40(A)(IA) OF THE ACT ARE CLARIFICATORY AND HAVE RETROSPECTIVE EFFECT AND HENCE NO DISALLOWANCE BE MADE UNDER SECTION 40(A)(IA) OF THE ACT, WHERE T.D.S. HAS BEEN PAID BE FORE THE DUE DATE OF FILING OF R.O.I. ITA NO.2 81 /AHD/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 2 OF 3 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) - XV, AHMEDABAD MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IN THE COURSE OF SCRUTINY ASSESSMENT PROCEEDIN GS , THE A SSESSING OFFICER NOTED THAT THE ASSESSEE H A S MADE PAYMENT S AGGREGATING TO RS.40,73,5 6 6/ - TO VARIOUS SUB - CONTR ACTORS FOR CONTRACT WORK AND DEDUCTED THE TAX AT SOURCE FROM THE SE AMOUNTS . H OWEVER, A S THESE AMOUNTS WERE DEPOSITED IN THE GOVERNMENT TR EASURY ON 08.04.2007, 15.05.2007 & 16.05.2007 AS AGAINST THE DUE DATE OF 31.03.2007. I T WAS IN THIS BACKDROP AND HAVING NOTED THAT THE TAXES WERE NOT DEPOSITED IN TIME, THE A SSESSING OFFICER DISALLOWED THESE PAYMENTS AGGREGATING TO R S .40,73,566/ - . IN APP EAL, HOWEVER, THE L EARNED CIT (A) DELETED THE DISALLOWANCE ON THE GROUND THAT THE PAYMENTS DEPOSITED OF TAXES IN THE G OVERNMENT T REASURY ARE REQUIRED TO BE TREATED AS WITHIN THE TIME IN VIEW OF THE AMENDMENT BROUGHT BY THE FINANCE ACT 2010 I.E. INSERTION OF FIRST PROVISO TO SECTION 40 (A)(IA) . IT WAS ALSO NOTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO , WARD 9(4) VS. SHRI SANJAY G ANDALAL PATEL (ITA NO.2826/AHD/2011 DATED 23.03.2012) . T HE A SSES S ING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. WE HAVE ALSO PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED F A CTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. W E FIND T HAT THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. R A JINDER K UMAR 362 ITR 241 (DELHI) HAS HELD THAT AMENDMENT MADE BY THE F INANCE ACT 2010 PERMITTING TDS PAYMENT TILL THE DUE D ATE OF RETURN OF INCOME ITA NO.2 81 /AHD/201 4 ASSESSMENT YEAR: 200 7 - 08 PAGE 3 OF 3 IS RETROSPECTIVE. IN EFFECT THER E FORE EVEN WITH RESPECT T O EARLIER YEARS AS LONG AS TA XES HAVE BEEN DEPOSITED IN THE G OVERNMENT T REASURY BEFORE THE DUE DATE OF FILING RETURN, IT CANNOT BE HELD THAT THERE WAS ANY ELEMENT OF DELAY IN DEPOSITING THE TAX AT SOURCE. THE SPECIAL BENCH DECISION OF THIS TRIBUNAL IN THE CASE OF BHARTI SHIPYARD LIMITED VS. DCIT, 132 ITR (SB) 53 WAS THUS DISAPPROVED BY THE HON BLE DELHI HIGH COURT. NO BINDING DECISION PRECEDENT TO THE CONTRARY HAS BEEN POINTED OUT TO US. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE ESTEEMED VIEW S OF THE HON BLE DELHI HIGH COURT ABOVE, WE UPHOLD THE RELIEF GRANTED BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 4. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COUR T TODAY ON THE 31 ST DAY OF AUGUST, 2016. SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 31 ST DAY OF AUGUST ,2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD