Shirdi Book Depot, Guntur V. THE DCIT, CIRCLE - 1(1), Guntur

ITA 286/VIZ/2014

• Counselvise Citation: 28625314 RSA 2014
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D MANOJ KUMAR
• Keywords: Reassessment proceedings
• Section: 143(3); 194C; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 286/VIZ/2014 ASSESSMENT YEAR : 2005-06 SHIRIDI BOOK DEPOT, GUNTUR. PAN AAIFS2775E THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE -1 (1), GUNTUR (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI G.V.N. HARI REVENUE BY SHRI D. MANOJ KUMAR DATE OF HEARING 08-07-2014 DATE OF PRONOUNCEMENT 08-07-2014 O R D E R PER J. SUDHAKAR REDDY, A.M.: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), GUNTUR DATED 28/03/2014 FOR THE ASSESSME NT YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS AND ALSO THE LAW APPLICABL E TO THE FACTS OF THE CASE. 2. A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) IS NOT JUSTIFIED IN REJECTING THE CONTENTION OF THE APPELL ANT THAT THE NOTICE ISSUED U/S 148 IS INVALID AND CONSEQUENTLY THE ENTI RE REASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED AS VOID-AB-INI TIO. B) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S 143(3) OF THAT AND HENCE REOPENING OF THE ASSESSMEN T AFTER COMPLETION OF FOUR YEARS FROM THE END OF THE ASSESS MENT YEAR IS NOT VALID IN THE ABSENCE OF ANY OMISSION OR FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY THE MATERIAL FACTS. 3 A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) IS NOT JUSTIFIED IN SUSTAINING THE FOLLOWING ADDITIONS MAD E BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE ACT: I) PRINTING CHARGES 1,13,55,235 II) BINDING CHARGES 1,31,877 III) DESIGNING & PRINTING CHARGES 5,96,151 IV) COMMISSION 1,90,935 V) TRANSPORT CHARGES 14,46,314 B) THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T EXCEPT IN THE CASE OF TRANSPORT CHARGES, THE APPELLANT DEDUCTED T AX AT SOURCE ON ALL OTHER PAYMENTS AND PAID THE SAME BEFO RE DUE DATE OF FILING THE RETURN OF INCOME. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T IN RESPECT OF TRANSPORT CHARGES PAID, THE APPELLANT HAS NOT ENTER ED INTO ANY CONTRACT WITH THE TRANSPORTERS AND HENCE PROVISIONS OF SECTI ON 194C ARE NOT APPLICABLE . 2. FIRST WE TAKE UP THE ISSUE OF VALIDITY OF REOPEN ING OF ASSESSMENT. 3. WE HAVE HEARD SHRI G.V.N. HARI, LEARNED COUNSEL ON BEHALF OF THE ASSESSEE AND SHRI D. MANOJ KUMAR, SR. LEARNED DR ON BEHALF OF THE REVENUE. 4. THE REASONS FOR REOPENING BROUGHT OUT AT PARA 3 OF THE ASSESSMENT ORDER, WHICH IS EXTRACTED FOR READY REFERENCE: LATER ON, ON VERIFICATION OF RECORDS, IT IS NOTIC ED THAT THE ASSESSEE DEBITED AN AMOUNT OF RS. 1,70,80,81 1 TOW ARDS PRINTING CHARGES, RS. 27,77,614 TOWARDS BINDING CHA RGES, RS. 14,87,236 TOWARDS DESIGNING AND PROCESSING CHAR GES, COMMISSION PAID OF RS. 2,36,275 ON PURCHASES AND R S. 22,12,192 TOWARDS FREIGHT CHARGES. AS SEEN FROM THE ACCOUNT COPIES OF THE ABOVE EXPENDITURE, THE ASSESS EE MADE TDS ON PRINTING CHARGES, BINDING CHARGES, PROCESSING CHARGES AND COMMISSION PAYMENTS, BUT 3 ITA NO. 286/VIZ/2014 SHIRIDI BOOK DEPOT REMITTED SUCH TDS AMOUNT TO THE GOVERNMENT ACCOUNT BELATEDLY IN APRIL, 2005, MAY, 2005 AND JUNE 2005. AS PER SECTION 194C & 194H R.W.S. 200 OF THE IT ACT, THE ASSESSEE IS REQUIRED TO REMIT THE TDS TO THE GOVERN MENT A/C. WITHIN DUE DATE AS PRESCRIBED. BUT AS SEEN FRO M THE ENCLOSED TDS PAYMENT DETAILS, THE ASSESSEE HAS REMI TTED THE TDS BELATEDLY IN APRIL, 2005, MAY 2005 AND JUNE 2005. IT IS ALSO NOTICED THAT IN RESPECT OF TRANSP ORTATION CHARGES OF RS. 7,40,362, THE ASSESSEE HAS NOT COMP LIED WITH THE TDS PROVISIONS OF THE I.T. ACT. HENCE, THE LATE REMITTANCE AND NON-COMPLIANCE TO TDS PROVISION'S WARRANTS DISALLOWANCES U/S.40(A)(IA) IN THE RESPECT IVE HEADS OF EXPENDITURE AND THE SAME HAS TO BE BROUGHT FOR TAXATION. THEREFORE, THE ASSESSMENT FOR THE ASSESSM ENT YEAR 2005-06 WAS RE-OPENED U/ S. 147 OF THE I.T. AC T, 1961, WITH THE PRIOR APPROVAL OF THE COMMISSIONER O F INCOME TAX, GUNTUR, A NOTICE U/S. 148 OF THE I.T. A CT, DATED 5-10-2011 WAS ISSUED TO THE ASSESSEE AND THE SAME WAS DULY SERVED. IN RESPONSE TO THE SAME, THE ASSES SEE FILED A LETTER ON 04.05.2012 SUBMITTING THAT THE RE TURN FILED ON 30.10.2005 FOR THE A.Y. 2005-06 MAY BE TREATED A S THE RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF THE I.T. ACT. FURTHER, THE CASE WAS TAKEN -UP FOR S CRUTINY AND NOTICES U/S. 143(2) DATED 04.05.2012 AND 26.06. 2012 HAVE BEEN ISSUED TO THE ASSESSEE AND THE SAME WERE DULY SERVED. 5. ON PERUSAL OF THESE REASONS, DEMONSTRATE THAT TH ERE IS NO ALLEGATION THAT THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT . 6. THE ASSESSEE IN THIS CASE ORIGINALLY FILED ITS R ETURN OF INCOME FOR THE AY 2005-06 ON 30/10/2005. THE AO COMPLETED THE ASSE SSMENT U/S 143(3) ON 28/12/2007. THEREAFTER, A NOTICE REOPENING THE A SSESSMENT WAS ISSUED U/S 148 OF THE ACT DATED 05/10/2011. HENCE, REOPENI NG WAS DONE BEYOND THE PERIOD OF 4 YEARS. THE PROVISO TO SECTION 147 A PPLIES AS THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO MAKE RETURN OF INCOME U/S 139 AND AS THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIALS NECESSARY FOR ITS ASSESSMENT FOR THAT ASSESSMENT YEAR, THE REOPENING IS BAD IN LAW. HENCE, WE QUASH THE SAME. FOR COMING TO THIS CONCLUSION, WE DRAW STRENGTH FROM THE CASE LAWS: 4 ITA NO. 286/VIZ/2014 SHIRIDI BOOK DEPOT 1. DYNACRAFT AIR CONTROLS VS. SNEHA JOSHI & ORS., [ 2013] 355 ITR 102 (BOM) 2. HONDA SIEL POWER PRODUCTS LTD. VS. DCIT, [2012] 340 ITR 53 3. AAYOJAN DEVELOPERS VS. ITO, [2011] 335 ITR 234 4. SRI SAKTHI TEXTILES LTD. VS. JCIT & ANR, [2012] 340 ITR 144 5. RAJAHMUNDRY SHIPPING & OIL FIELD SERVICES LTD., ITA NO. 352/VIZ/2008 6. PEC ELECTRICALS PVT. LTD., ITTA NO. 236 OF 2013, DATED 12 TH JULY, 2013 (HONBLE AP HIGH COURT DECISION) 7. CHANDANA BROTHERS, ITA NO. 85 & 86/VIZ/2009, DAT ED 03/05/2013. 8.CHANDANA BROTHERS, ITA NO. 20/VIZ/2012 DATED 13/1 2/2013. 7. ON THE MERITS OF THE CASE, THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT DISALLOWANCE U/S 40(A)(IA) OF THE AC T, WAS WRONGLY MADE AS THE ASSESSEE HAD REMITTED THE TDS MUCH BEFORE THE D UE DATE OF FILING OF RETURN OF INCOME U/S 139 OF THE ACT AND THAT THE AM ENDMENT TO SECTION 40(A)(IA) IS RETROSPECTIVE AS HELD BY THE HONBLE AP HIGH COURT IN THE CASE OF CIT VS. PEC ELECTRICALS PVT. LTD. IN ITTA NO. 26 3 OF 2013 VIDE ORDER DATED 12 TH JULY, 2013. 8. AS REGARDS, TRANSPORT CHARGES, IT WAS SUBMITTED THAT THE LORRIES WERE ENGAGED BY THE SUPPLIERS OF MATERIAL AND THE ASSESS EE HAS NO DIRECT CONTACT/CONTRACT WITH THE TRANSPORTERS AND THAT IT ONLY MAKES PAYMENTS OF HIRE CHARGES. HE RELIED ON THE DECISIONS OF ITAT, V ISAKHAPATNAM BENCH IN THE CASE OF CHANDANA BROTHERS IN ITA NOS. 85 & 86/V /2009 AND ITA NO. 20/V/2012 DATED 03/05/2013 AND 13/12/2012 RESPECTIV ELY. AS WE HAVE ANNULLED THE ASSESSMENT ITSELF BY QUASHING REOPENIN G PROCEEDINGS, WE DO NOT ADJUDICATE THE ISSUE ON MERIT AS IT WOULD BE AN ACADEMIC EXERCISE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 08/07/2014. SD/- SD/- (SAKTIJIT DEY) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHPATNAM, DATED: 8 TH JULY, 2014 5 ITA NO. 286/VIZ/2014 SHIRIDI BOOK DEPOT KV COPY TO:- 1) M/S SHIRIDI BOOK DEPOT, D.NO. 13-12-41, 2 ND LINE, GUNTURUVARI THOTA, GUNTUR. 2) DCIT, CIRCLE 1(1), GUNTUR 3) CIT(A), GUNTUR 4) CIT, GUNTUR 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., V IZAG.