ITO, New Delhi V. Sh. Anupam Kasera Prop., New Delhi

ITA 3035/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81992 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISHRA
• Assessee Lawyers: MRS SAKSHI SINGH
• Keywords: Retrospective amendment; Additional evidence; Non-deduction of tax
• Section: 143(3); 154

Judgement Text

DELHI BENCH A : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 303 5/DEL/2013 ASSESSMENT YEAR 2008 - 09 APPELLANT BY : A MISHRA, CIT DR RESPONDENT BY : MRS. SAKSHI SINGH, CA O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A), XXV, NEW DELHI DATED 11.03.2013 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT(A) IS CORRECT IS NOT APPRECIATING THE FACT THAT AMENDMENT 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) IS CORRECT IN NOT APPRECIATING THE FACT THAT AS PER DOCUMENTARY EVIDENCE PLAC ED BEFORE THE AO, THE CHALLANS WERE TENDERED TO THE BANK ON 03.04.2008 AND NOT BEFORE THE CLOSE OF THE RELEVANT FINANCIAL YEARS. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) IS CORRECT IN NOT DISCUSSING IN THE ORDER AS TO ON WHAT EVIDEN CE HE RELIED UPON FOR ACCEPTING THE ASSESSEE CONTENTION THAT THE CHALLANS OF TDS WERE TENDERED TO THE BANK BEFORE THE END OF THE RELEVANT FINANCIAL YEAR & WHETHER RULE 46A WAS FOLLOWED IF ADDITIONAL EVIDENCE, IF ANY, WAS ADMITTED. 3. ALL THE AFORESAID GR OUND S ARISE IN CON NECTION WITH DISALLOWANCE MADE O F RS.20,29,461/ - U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT). 4. DURING THE INSTANT YEAR THE ASSESSEE PAID COMMISSION OF RS.20,29,461/ - , WHICH WAS ALLOWED AS EXPENDITURE IN THE SCRUTINY ASSESSMENT ORD ER UNDER SECTION 143(3) OF THE A CT. LATER THE AO IN AN ORDER DATED 03 RD AUGUST 2012, U/S 154 OF THE ACT, HELD THAT SAID DEDUCTION OF EXPENDITURE IS NOT ALLOWABLE SINCE THE ASSESSEE HAS NOT ITO WARD - 30(2) NEW DELHI VS. ANUPAM KASERA PROP. M/S. DELHI SUGAR TRADING CO. 30, NETAJI SUBHASH MARG, DARYAGANJ, NEW DELHI PAN:AALPK3189R (APPELLANT) (RESPONDENT) PAGE 2 OF 3 DEPOSITED THE TDS BEFORE 31 ST MARCH 2008 , IN VIEW OF THE SECTION 40(A)(IA) OF THE ACT. 5. THE LD CIT(A) HAS HELD THAT TDS STOOD DEPOSITED ON 03 RD APRIL 2008, WHICH WAS BEFORE THE DATE OF FILING OF RETURN U/S 139(1) OF THE ACT ; AND AS SUCH THE DISALLOWANCE MADE IN THE ORDER U/S 154 OF THE ACT IS NOT JUSTIFIABLE. 6. THE REVENUE HAS ASSAILED THE AFORESAID DECISION OF THE LD CIT(A) BY CONT ENDING INTER - ALIA THAT AMENDMENT TO SECTION 40(A)(IA) OF THE ACT HAD BEEN BROUGHT WITH EFFECT FROM 01.04.2010 AND THEREFORE CANNOT BE GIVEN RETROSPECTIVE EFFECT. WE FI ND THAT THIS ISSUE IN NO LONGER RES - INTEGRA. 7. IN THE CASE OF CIT VS. RAJINDER KUMAR (DELHI) (2014) 362 ITR 241 THE HONBLE HIGH COURT OF DELHI HAS HELD AS UNDER: - SECTION 4 0 (A)(IA ) OF THE INCOME - TAX ACT, 1961, AND THE PROVISO THERETO, AS AMENDED BY THE FINANCE ACT, 2008, WITH RETROSPECTIVE EFFECT FROM APRIL 1, 2005, ACKNOWLEDGED THAT WHERE TAX WAS DEDUCTIBLE AND WAS DEDUCTED DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT WAS PAID B EFORE THE DUE DATE SPECIFIED UNDER SUB - SECTION (1) OF SECTION 139, DEDUCTION SHALL BE ALLOWED IN THE YEAR . CLAUSE (A) OF THE PROVISO TO SECTION 40(A)(IA) OF THE ACT, AS AMENDED BY THE FINANCE ACT, 2008, WITH RETROSPECTIVE EFFECT FROM APRIL 1, 2005, HAS T O BE READ WITH CLAUSE (A) OF THE MAIN SECTION AND NOT IN ISOLATION. CLAUSE (A) OF THE MAIN SECTION AND CLAUSE (A) OF THE PROVISO WILL APPLY IN DIFFERENT FACTUAL MATRICES OR SITUATIONS. CLAUSE (A) OF THE MAIN SECTION APPLIES WHEN THE TAX WAS DEDUCTIBLE AND WAS SO DEDUCTED DURING THE LAST MONTH OF THE ASSESSMENT YEAR AND WAS PAID ON OR BEFORE THE DUE DATE FOR FILING OF THE RETURN UNDER SECTION 139(1). THE PROVISO APPLIES WHEN TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR HAS BEEN DEDUCTED IN TERMS OF CLAUSE (A) DURING THE LAST MONTH OF THE PREVIOUS YEAR BUT HAS BEEN PAID AFTER THE DUE DATE. THE EXPRESSION SAID DUE DATE' CANNOT MEAN THE DATE ON WHICH TAX DEDUCTED AT SOURCE IN ACCORDANCE WITH CHAPTER XVIII - B SHOULD HAVE BEEN PAID. IT REFERS TO THE DUE DATE FO R FILING OF THE RETURN UNDER SECTION 139(1) OF THE ACT. ANY OTHER INTERPRETATION WOULD LEAD TO DIFFICULTIES, INCONGRUITIES AND CONFLICT BETWEEN CLAUSE (A) OF THE MAIN SECTION AND CLAUSE (A) OF THE PROVISO. BOTH WOULD BE APPLICABLE TO THE SAME FACTUAL MATRI X/SITUATION WITH CONTRADICTORY STIPULATIONS OR CONSEQUENCES. THE PROVISIONS, AS AMENDED BY THE FINANCE ACT, 2010, ARE CLEAR AND FREE FROM ANY AMBIGUITY AND DOUBT. THEY CLEARLY SUPPORT THE VIEW THAT THE EXPRESSION 'SAID DUE DATE' USED IN CLAUSE (A) OF THE PROVISO TO THE UNAMENDED SECTION REFERS TO THE TIME SPECIFIED IN SECTION 139(1) OF THE ACT. THE AMENDED SECTION 40 (A)(IA) EXPANDS AND FURTHER LIBERALISES THE STATUTE WHEN IT STIPULATES THAT DEDUCTIONS MADE IN THE FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR BUT PAID BEFORE THE DUE DATE OF FILING OF THE RETURN, WILL CONST ITUTE SUFFICIENT COMPLIANCE. PAGE 3 OF 3 THE INTENTION BEHIND SECTION 40(A)(IA) IS TO ENSURE THAT TAX IS DEDUCTED AT SOURCE AND PAID. THE OBJECT OF INTRODUCTION OF SECTION 4O(A)(IA) IS TO ENSURE THAT THE PROVISIONS FOR TAX DEDUCTION AT SOURCE ARE SCRUPULOUSLY IMPLEME NTED WITHOUT DEFAULT IN ORDER TO AUGMENT RECOVERIES. IT IS NOT TO PENALISE AN ASSESSEE WHEN PAYMENT HAS BEEN MADE WITHIN THE TIME STATED. FAILURE TO DEDUCT TAX AT SOURCE OR DEPOSIT IT RESULTS IN LOSS OF REVENUE AND MAY DEPRIVE THE GOVERNMENT OF THE TAX DUE AND PAYABLE. THE PROVISION SHOULD BE INTERPRETED IN A FAIR, JUST AND EQUITABLE MANNER. IT SHOULD NOT BE INTERPRETED IN A MANNER WHICH RESULTS IN INJUSTICE AND CREATES TAX LIABILITIES WHEN TAX DEDUCTED HAS BEEN DEPOSITED AND THE ASSESSEE WHO WAS FOLLOWING THE CASH SYSTEM OF ACCOUNTANCY HAS MADE ACTUAL PAYMENT TO THE THIRD PARTY FOR SERVICES RENDERED. 8. IN VIEW OF THE AFORESAID BINDING PRECEDENT OF THE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY INFIRMITY IN THE IM PUGNED ORDER AND WE THEREFORE CONFIRM THE SAME AND DISMISS THE APPEAL OF THE REVENUE. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 . 11 . 2014. - SD/ - - SD/ - ( G. D. AGARWAL) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 24 / 11 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI