Shri Kishore R. Pithva, Ahmedabad V. The Income tax Officer,Ward-12(2), Ahmedabad

ITA 2931/AHD/2010

• Counselvise Citation: 293120514 RSA 2010
• Duration Of Justice: 3 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 26-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: M K PATEL
• Keywords: Non-deduction of tax
• Section: 194C

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.2931/AHD/2010 [ASSTT.YEAR : 2007-2008] SHRI KISHORE R. PITHVA MATHUR MASTER ESTATE OPP: BABULAL ZAFARANI PATTI NAGARWEL HANUMAN ROAD AMRAIWADI, AHMEDABAD 380 006. PAN : ACRPP 9292 L /VS. ITO, WARD-12(2) AHMEDABAD. ( (( ( *+ *+ *+ *+ / APPELLANT) ( (( ( ,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ./ 0 1 & / ASSESSEE BY : SHRI M.K. PATEL ( 0 1 & / REVENUE BY : SMT.SONIA KUMAR, SR.DR 3 0 /4' / DATE OF HEARING : 8 TH SEPTEMBER, 2014 567 0 /4' / DATE OF PRONOUNCEMENT : 17.10.2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAINST T HE ORDER OF THE CIT(A). 2. THE GROUND NO.1 AND 2 OF THE ASSESSEE ARE AS UND ER: 1. THE LD.CIT(A) HAS ERRED IN DECIDING THE GROUND OF APPEAL A AS NOT PRESSED IN RESPECT OF NON DEDUCTION OF TDS U/S.194C OF THE ACT ON EXPENSES OF RS.7,97,850/- AND RS.1,75,000/- AS NOT ALLOWABLE U/S.40(A)(IA) WHEN THE PROVISIONS OF DEDUCTION OF T DS FOR AN INDIVIDUAL ITA NO.2931/AHD/2010 -2- ASSESSEE WHERE MADE APPLICABLE W.E.F. 01/06/2007 AN D ALSO BROUGHT TO THE NOTICE OF CIT(A) VIDE SUBMISSION DATED 25/03/20 10 THAT IT WERE NOT APPLICABLE DURING PREVIOUS YEAR 2006-07. THE LEARN ED CIT(A) OUGHT TO HAVE DELETED THE EXPENSES DISALLOWANCE AS NOT CONSI STENT WITH LEGAL PROVISIONS. 2. THE LD.CIT(A) HAS ERRED IN REJECTING THE GROUND NUMBER A OF THE GROUND OF APPEAL BEFORE HIM AS NOT PRESSED VIDE ORD ER SHEET ENTRY DATED 06/09/2010 IN AS MUCH AS THE AR WAS NOT EMPOWERED T O DOS O BUT AS EXPLAINED TO APPELLANT HE WAS FORCED TO DO SO TO A VOID ADVERSE CONSEQUENCES THEREOF. THE ACCEPTANCE OF THE AR FOR NOT PRESSING THE GROUND NUMBER A BE HELD TO BE ILLEGAL AND BAD IN LAW AND ALSO AS NOT IN CONFORMITY WITH THE AUTHORITY GRANTED TO AR. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE OF DISALLOWANCE OF EXPENSES AMOUNTING TO ` 7,97,850/- AND ` 1,75,000/- UNDER SECTION 40(A)(IA) OF THE ACT WAS NOT PRESSED BY THE CHARTERED ACCOUNTANT OF THE ASSESSEE BEFORE THE CIT(A). HE SUBMITTED THAT THE PROVISION OF TDS UNDER SECTION 194C FOR INDIVIDUAL ASSESSEE WERE MADE APPL ICABLE W.E.F. 1-6-2007, AND THEREFORE, WERE NOT APPLICABLE FOR THE RELEVANT ACC OUNTING PERIOD, AND THEREFORE, THE CONCESSION MADE BY THE CHARTERED ACCOUNTANT OF THE ASSESSEE WAS UNDER SOME MISCONCEPTION WITH REGARD TO THE RELEVANT PROV ISION OF LAW. HE SUBMITTED THAT THE ISSUE BEING LEGAL IN NATURE, THE REVENUE A UTHORITIES SHOULD HAVE DECIDED THE SAME IN ACCORDANCE WITH LAW, AND THERE COULD NO T BE ANY AGREEMENT IN CONTRAVENTION OF THE LAW OF THE LAND. HE SUBMITTED THAT THE DECISION OF THE HONBLE APEX COURT IN CIT VS. SHELLY PRODUCTS AND A NOTHER, 261 ITR 367 (SC) AND THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT IN P.V. DOSHI VS. CIT, 113 ITR 22 (GUJ) AND S.R. KOSHI VS. CIT, 276 I TR 165 (GUJ) COVERS THE ISSUE BEFORE THE TRIBUNAL IN FAVOUR OF THE ASSESSEE . 4. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF TH E LEARNED COUNSEL FOR THE ASSESSEE. SHE SUBMITTED THAT THE CHARTERED ACCO UNTANT OF THE ASSESSEE HAS CONCEDED THE ISSUE AS NOT PRESSED BEFORE THE CIT(A ), AND THEREFORE, THE ASSESSEE SHOULD NOT BE ALLOWED TO AGITATE THE SAME NOW BEFOR E THE TRIBUNAL. SHE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). ITA NO.2931/AHD/2010 -3- 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAS PER USED THE ORDERS OF THE AO AND THE CIT(A), AND ALSO DECISIONS OF VARIOUS CO URTS RELIED UPON ON BEHALF OF THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS ADM ITTED THAT ITS CHARTERED ACCOUNTANT HAS NOT PRESSED THE ISSUE BEFORE THE C IT(A). HOWEVER, WE FIND THAT THERE COULD NOT LEGALLY BE NO ESTOPPEL AGAINST THE LAW. THE DISALLOWANCE WAS MADE FOR NON-DEDUCTION OF TAX ON EXPENSES UNDER SECTION 40(A)(IA) OF THE ACT, ALTHOUGH, THE TDS PROVISION UNDER SECTION 194C ON AN INDIVIDUAL ASSESSEE WAS NOT APPLICABLE DURING THE RELEVANT PERIOD TO TH E CASE OF THE ASSESSEE, BEING AN INDIVIDUAL, AS THIS PROVISION OF TDS WAS MADE AP PLICABLE W.E.F. 1-6-2007 IN CASE OF AN INDIVIDUAL. WE FIND THAT THERE COULD NO T BE ANY VALID AGREEMENT OF THE ASSESSEE WITH THE DEPARTMENT IN CONTRAVENTION O F THE STATUTE. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE TDS PROVISION UNDER SECTION 194C WERE IN FACT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSE E DURING THE RELEVANT PERIOD. THE ONLY REASONING OF THE REVENUE AUTHORITIES WAS T HAT SINCE THE ASSESSEES REPRESENTATIVE HAS CONCEDED THE ISSUE BEFORE THE CI T(A), THE ADDITION SHOULD BE UPHELD. SUCH AN INTERPRETATION OF LAW, IN OUR CONS IDERED OPINION, SHALL LEAD TO ANOMALIES AND ALSO NOT SUSTAINABLE IN LAW. WE ARE OF THE VIEW THAT IT IS THE RESPONSIBILITY OF THE REVENUE AUTHORITIES TO COMPUT E THE TAXABLE INCOME OF THE ASSESSEE CORRECTLY IN ACCORDANCE WITH THE PROVISION OF LAW APPLICABLE TO THE CASE OF THE ASSESSEE. IF THE ASSESSEE UNDER SOME MISCON CEPTION OF THE CORRECT LEGAL PROVISION APPLICABLE TO THE RELEVANT PERIOD, MAKE A CONCESSION AND AGREED TO GET THE AMOUNT TAXED, WHICH WAS OTHERWISE NOT TAXABLE A S PER THE SCHEME OF THE ACT, THE TAXING AUTHORITIES SHOULD REFRAIN THEMSELV ES FROM TAXING SUCH AMOUNT. THE TAXING AUTHORITIES HAVE AN EQUAL RESPONSIBILITY OF ASSESSING THE CORRECT INCOME OF THE ASSESSEE. HOWEVER, IN CASE THE ASSES SEE CONCEDES CERTAIN AMOUNT AND AGREES THAT THE SAME MAY BE TAXED ON THE BASIS OF PURE FACTUAL POSITION OF THE ISSUE, THE ASSESSEE MAY BE BOUND BY SUCH CONCES SION MADE BY HIM VOLUNTARILY AND WITH HIS FREE WILL. IN CIT VS. SHE LLY PRODUCTS AND ANOTHER (SUPRA), THE HONBLE APEX COURT HELD THAT EXCESS TA X PAID BY ASSESSEE OUT OF ABUNDANT CAUTION OR OWING TO ERROR OR NON-TAXABILIT Y, THE SAME HAS TO BE ITA NO.2931/AHD/2010 -4- REFUNDED TO THE ASSESSEE. IN P.V. DOSHI VS. CIT (S UPRA), THE HONBLE GUJARAT HIGH COURT HELD THAT AS A JURISDICTIONAL PROVISION WHICH WAS MANDATORY AND ENACTED IN PUBLIC INTEREST COULD NEVER BE WAIVED AN D THE WANT OF JURISDICTION WAS DISCOVERED BY THE AAC, THERE WAS NO QUESTION OF WAIVER BY THE ASSESSEE. IN S.R.KOSHTI VS. CIT, WHEREIN THERE WAS A OVER ASS ESSMENT DUE TO MISTAKE OF ASSESSEE IN FAILURE TO CLAIM EXEMPTION ON VOLUNTARY RETIREMENT COMPENSATION AND THE MISTAKE WAS RECTIFIED BY THE AO, IT IS HELD BY THE HONBLE HIGH GUJARAT COURT THAT THE ORDER OF THE AO WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN VIEW OF THE VARIOUS JUDICIAL PRONOUNCEMENTS AND THE SETTLED LEGAL POSITION, AS DETAILED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AMOUNT IN QUESTION COULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE AC T MERELY BECAUSE THE ASSESSEE HAS CONCEDED THE SAME THROUGH ITS CHARTERED ACCOUNT ANT BEFORE THE CIT(A). WE FIND THAT THE CIT(A) HAS NOT CONSIDERED THE ISSU E BEFORE HIM ON MERITS, AND ACCORDINGLY, WE HOLD THAT IT SHALL BE IN THE INTERE ST OF JUSTICE TO RESTORE THE ISSUE IN GROUND NO.1 AND 2 BEFORE US TO THE FILE OF THE C IT(A) WITH DIRECTION TO DECIDE THE SAME DE NOVO IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO BOTH THE PARTIES. WE DIRECT ACCORDINGLY. 6. THE GROUND NO.3 IS AS UNDER: 3. THE LD.CIT(A) HAVE FURTHER ERRED IN NOT ADJUDIC ATING THE OTHER MATTER OF ADHOC DISALLOWANCE OF EXPENSES OF RS.5,82 0/-, RS.12,738/-, RS.6,594/- AND RS.17,148/- AGITATED IN GROUND NUMBE R A BEFORE CIT(A) BEING UNCONNECTED WITH TDS PROVISION DISALLOWANCE. 7. THE LEARNED AR OF ASSESSEE HAS NOT PRESSED THIS GROUND OF THE APPEAL OF THE ASSESSEE, WHICH IS ACCORDINGLY DISMISSED. 8. THE GROUND NO.4 OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 4.THE LD.CIT(A) HAS ERRED IN NOT ALLOWING THE GROU ND INTEREST WRONGLY CHARGED U/S.234B OF THE ACT. ITA NO.2931/AHD/2010 -5- 9. THE LEARNED AR SUBMITTED THAT IT IS CONSEQUENTIA L IN NATURE. WE HOLD THAT THAT THE ISSUE OF CHARGING OF INTEREST IS CONSEQUEN TIAL IN NATURE, AND WE DIRECT ACCORDINGLY. 10. THE GROUND NO.5 OF THE ASSESSEES APPEAL IS AS UNDER: 5. THE APPELLANT THEREFORE PRAYS TO DELETE THE DIS ALLOWANCE OF EXPENSES MADE DISALLOWANCE U/S.40(A)(IA) R.W.S. 194 C AND ALSO ADHOC DISALLOWANCES CONSEQUENTIAL RELIEF BE GRANTED FOR INTEREST CHARGED U/S.234B OF THE ACT. 11. THE LEARNED AR HAS NOT PRESSED THIS GROUND OF T HE APPEAL, WHICH IS ACCORDINGLY DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## # . .. . # ## # . . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD