Oruganti Sowbhagyam, Ganjam V. DCIT, Berhampur

ITA 291/CTK/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3206 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K LENKA
• Assessee Lawyers: B H AGABAN PADHEE
• Keywords: TDS
• Section: 40(a)(ia); 194C; 201

Judgement Text

P A G E 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 291 /CTK/201 9 ASSESSMENT YEAR : 2011 - 12 ORUGANTI SOWBHAGYAM , BALAJI WEIGHT BRIDGE UTKAL ASHRAM ROAD, NEAR GANJAMKALA PARISHAD, BERHAMPUR. VS. DCIT , BERHAMPUR PAN/GIR NO. AOJPS 8089 Q (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B H AGABAN PADHEE , AR REVENUE BY : SHRI J.K.LENKA , DR DATE OF HEARING : 1 5 / 1 1 / 201 9 DATE OF PRONOUNCEMENT : 04 / 1 2 / 201 9 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A),1, BHUBANESWAR DATED 12.6.2019 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE SOLE GROUND RAISED BY THE ASSESSEE IS THAT THE LD CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.5,00,000/ - MADE U/S.40(A)(IA) OF THE ACT. 3. LD A.R. OF THE ASSESSEE SUBMITTED THAT NON - DEDUCTION OF TDS WHILE MAKING DEPOSIT TO TRANSPORTER PROV IDERS ON DECLARATION OF PAN NUMBER WHICH CAME INTO EFFECT FROM 1.10.2009. LD A.R. FURTHER SUBMITTED THAT THE AMENDED PROVISIONS LAID DOWN U/S.194C(6) OF THE I.T.ACT, 1961 (IN SHORT ITA NO.291/CTK/2019 ASSESSMENT YEAR : 2011 - 12 P A G E 2 | 4 THE ACT) IS OPERATIVE W.E.F. 1.6.2015 AND PAYMENT OF RS.5 LAKHS TO THE TRANSPOR TER DISALLOWED BY THE AO U/S,. 40(A)(IA) OF THE ACT ON ACCOUNT OF NON - DEDUCTION OF TDS IS PERTAINING TO FINANCIAL YEAR 2010 - 2011 RELEVANT TO ASSESSMENT YEAR 2011 - 12. THEREFORE, AMENDED PROVISION OF SUB - SECTION(6) OF SECTION 194C OF THE ACT CANNOT BE APPLIED RETRO SPECTIVELY FOR MAKING ADDITION. LD A.R. SUBMITTED THAT SINCE THE AMENDED PROVISION IS APPLICABLE FROM 1.6.2015 I.E. FROM FINANCIAL YEAR 2015 - 16 RELEVANT TO ASSESSMENT YEAR 2016 - 17 ONWARDS, THEREFORE, THE FINDINGS OF THE CIT(A) IN PARA 3.2 OF THE ORDER AR E NOT SUSTAINABLE. HENCE, THE AO MAY KINDLY BE DIRECTED TO DELETE THE ADDITION. 4. REPLYING TO ABOVE, LD D.R. SUBMITTED THAT IN PURSUANCE TO THE ORDER OF PR. CIT, BHUBANESWAR U/S.263 OF THE ACT DATED 14.3.2016, THE AO WAS DIRECTED TO FRAME DENOVO ASSESS MENT ORDER AND IN PUR SUANCE THERETO, THE ASSESSING OFFICER PASSED REASSESSMENT ORDER U/S.263/143(3) ON 23.12.2016. LD D.R. SUBMITTED THAT ON THE DATE OF PASSING ORDER, THE AMENDMENT INSERTED BY THE LEGISLATURE WAS OPERATIVE AND EFFECTIVE AND, THEREFORE, THE AO WAS RIGHT IN MAKING THE ADDITION AND LD CIT(A) WAS ALSO CORRECT IN CONFIRMING THE SAME. HOWEVER, ON BEING ASKED BY THE BENCH, LD D.R. COULD NOT CONTROVERT THAT THE AMENDMENT INSERTED BY FINANCE ACT,2015 TO SUB - SECTION(6) OF SECTION 194C HAS BEEN GI VEN EFFECT FROM 1.6.2015 AND THERE IS NO MANDATE OR DIRECTION OF THE LEGISLATURE TO APPLY THE SAME RETROSPECTIVELY WHICH MAY COVER ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2011 - 12. ITA NO.291/CTK/2019 ASSESSMENT YEAR : 2011 - 12 P A G E 3 | 4 5. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, FIRST OF ALL, I MAY POINT OUT THAT THE AMENDMENT HAS BEEN INSERTED BY FINANCE ACT, 2015 TO SUB - SECTION(6) OF SECTION 194C OF THE ACT, WHICH HAS BEEN HELD AS EFFECTIVE W.E.F. 1.6.2015, WHICH DISENTITLE THE ASSESSEE FROM BENEFIT OF FIRST LIMB OF SUB - SECTION (6) OF SECTION 1 94C OF THE ACT AS THE LEGISLATURE IN ITS WISDOM ADDED WORDS WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGE AT ANY TIME DURING THE PREVIOUS YEAR AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WITH . IN MY HUMBLE UNDERSTANDING, THE PURPOSE OF INSE RTION OF SAID PROVISIONS OF SUB - SECTION(6) TO SECTION 194C WAS THAT THE LEGISLATURE IN ITS WISDOM WANTED TO GIVE RELAXATION OF THIS PROVISION ONLY IN A CASE WHERE THE CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGE AT ANY TIME DURING THE PREVIOUS YEAR AND FURNI SHES A DECLARATION TO THAT EFFECT ALON G WITH HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM ON WHICH TDS U/S.194C WAS REQUIRED TO BE MADE. 6. IN MY HUMBLE UNDERSTANDING, THE PRESENT CASE UNDER CONSIDERATION IS PERTAINING TO PAYMENT OF AMOUNT TO CONTRACTOR BY THE ASSESSEE RELATES TO ASSESSMENT YEAR 2011 - 12 AND I AM UNABLE TO AGREE WITH THE CONTENTION OF LD D.R. THAT THE AMENDED SUB - SECTION(6) OF SECTION 194C CAN BE PLACED INTO SERVICE AGAINST THE ASSESSEE FOR ASS ESSMENT YEAR 2012 - 12 AS IT IS AMPLE CLEAR FROM THE FINANCE ACT, 2015 THAT SAID AMENDED PROVISIONS HAS BEEN GIVEN EFFECT FROM 1.6.2015 WHICH FALLS WITHIN THE AMBIT OF FINANCIAL YEAR 2015 - 16. I THEREFORE, HOLD THAT THE BASIS TAKEN BY THE AO AND CONCLUSION ITA NO.291/CTK/2019 ASSESSMENT YEAR : 2011 - 12 P A G E 4 | 4 D RAWN BY THE CIT(A) IN PARA 3.2 IN HIS ORDER CANNOT BE HELD AS SUSTAINABLE AND JUSTIFIED AND THUS, I DISMISS THE SAME. THE AO IS DIRECTED TO DELETE THE ADDITION OF RS.5,00,000/ - . HENCE, THE SOLE GROUND OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 4 / 1 1 /201 9 . S D/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 4 / 1 2 /20 1 9 B. K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : ORUGANTI SOWBHAGYAM , BALAJI WEIGHT BRIDGE UTKAL ASHRAM ROAD, NEAR GANJAMKALA PARISHAD, BERHAMPUR 2. THE RESPONDENT. DCIT , BERHAMPUR 3. THE CIT(A) - 1 , BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//