Shri Gurmeet Singh, Faridkot V. The Income Tax Officer, Faridkot

ITA 319/ASR/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8696 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R JAIN
• Keywords: Revision of order
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.319(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN :AJIPS9133N SH.GURMEET SINGH, VS. THE INCOME TAX OFFICER, LABOUR CONTRACTOR, WARD-III(4), FARIDKOT. MOHALLA PURBIAN, ST. MISTRIAN, FARIDKOT. (APPELLANT) (RESPONDENT) I.T.A. NO.233(ASR)/2009 ASSESSMENT YEAR:2005-06 PAN :AJIPS9133N SH.GURMEET SINGH, VS. THE INCOME TAX OFFICER, LABOUR CONTRACTOR, WARD-III(4), FARIDKOT. MOHALLA PURBIAN, ST. MISTRIAN, FARIDKOT. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.K.R.JAIN, ADVOCATE RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING:05/03/2015 DATE OF PRONOUNCEMENT:23/03/2015 ORDER PER B.P.JAIN,AM: THE APPEAL IN ITA NO.319(ASR)/2014 ARISES FROM THE ORDER OF THE CIT(A), BATHINDA, DATED 14.02.2014 FOR THE ASSESSME NT YEAR 2005-06 AGAINST ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 2 THE ORDER PASSED BY THE CIT(A) U/S 143(3)/263 OF TH E ACT. IN ITA NO.233(ASR)/2014, THE APPEAL ARISES FROM THE ORDER OF THE CIT(A), BATHINDA, DATED 17.03.2009. 2. IN ITA NO.31(ASR)/2014, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ORDER OF LD. CIT(A) IS WRONG ILLEGAL AND AGAINST FACTS. 2. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS O F THE CASE, EXPLANATION OFFERED AND PROCEEDED TO REJECT THE APP EAL ARBITRARILY. 3. THAT WITHOUT PREJUDICE TO THE ABOVE THE LD. AO HAS ERRED IN LAW AND ON FACTS WHILE ASSESSING INCOME FROM THE CONTR ACT PAYMENTS RECEIVED BY GURMEET SINGH ON BEHALF OF BIK KAR SINGH & GURDIAL SINGH IN THE HANDS OF GURMEET SINGH WHILE HOLDING THAT THIS CONTRACT PERTAINS TO BIKER SINGH & GURDIA L SINGH AND NOT ALLOWING CREDIT FOR TDS. 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS W HILE ASSESSING ASSESSING INCOME OF BIKKAR SINGH & GURDI AL SINGH IN THE HANDS OF ASSESSEE APPELLANT WITHOUT GIVING C REDIT OF TAXES PAID BY THEM IN RESPECT OF THE INCOME ASSESSED IN T HE HANDS OF ASSESSEE APPELLANT. 5. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS T HAT ASSESSING BIKKER SINGH GURDIAL SINGH HAVE HELD THAT THE INCOM E OF ASSESSEE APPELLANT. 6. THAT AS PER SETTLED LAW ASSESSEE IS ENTITLED TO GET THE CREDIT FOR THE TDS DEDUCTED AND DEPOSITED. 3. IN ITA NO. 233(ASR)/2014, THE ASSESSEE HAS RAIS ED FOLLOWING GROUNDS: 1. THAT THE LD. CIT HAS ERRED IN LAW AND FACTS WHI LE INITIATING AND PASSING ORDER U/S 263 OF THE I.T. ACT, 1961. ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 3 2. THAT THE LD. CIT HAS NOT APPRECIATED THE FACTS O F THE CASE, EXPLANATION OFFERED AND PROCEEDED TO PASS ORDER U/S 263 ARBITRARILY. 3. THAT THE LD. AO HAS DISCUSSED THE ISSUES IN DETA IL IN THE ASSESSMENT ORDER, ACCEPTED THE SUBMISSIONS OF THE A SSESSEE AND IN ANY CASE THE ORDER OF THE AO IS NEITHER ERRONEOU S NOR PREJUDICIAL TO THE INTEREST OF REVENUE AND HENCE BA D IN LAW. 4. BOTH THE APPEALS BEING OF THE SAME ASSESSEE AND BEING INTER-CONNECTED ARE TAKE UP TOGETHER BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 5. FIRST OF ALL, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.319(ASR)/2014 FOR THE ASSESSMENT YEAR 2005-06. T HE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT HAS BEEN FRA MED BY THE AO ON 8.10.2007. IN THE ORIGINAL ORDER, THE AO HAS ALLOW ED REBATE ON ACCOUNT OF TDS DEDUCTED IN RESPECT OF PAYMENTS MADE TO SH. BIK KER SINGH. THE ASSESSMENT SO FRAMED HAS BEEN CANCELLED BY THE LD. CIT, BATHINDA VIDE HIS ORDER DATED 17.03.2009 U/S 263 OF THE ACT BY OBSERV ING AS UNDER: I HAVE CONSIDERED ALL THE RELEVANT FACTS OF THE CAS E AS WELL AS SUBMISSIONS MADE BY THE ASSESSEE. IT IS CLEAR FROM THE FACTS THAT IT IS A CASE WHERE M/S. BIKKER SINGH GURDIAL SINGH HAVE ENTERED INTO AN AGREEMENT WITH SH.GURMEET SINGH VIDE AGREEM ENT DATED 06.04.2004, THOUGH WHICH THE FORMER HAVE GRANTED A SUB CONTRACT TO THE LATTER, AND THE SAME IS COVERED BY THE PROVISIONS OF SECTION 194C(3) OF THE INCOME TAX ACT, 1961. IN THIS WAY, THE LATTER PARTY I.E. SH.GURMEET SINGH IS THE SUB-CONTR ACTOR AND THE FORMER I.E. M/S. BIKKER SINGH GURDIAL SINGH ARE THE SUB- CONTRACTEE. THE SUB-CONTRACTEE WAS REQUIRED TO DED UCT TDS OUT OF THE PAYMENTS MADE BY IT TO THE SUB-CONTRACTOR. IN THAT ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 4 SITUATION, THE CREDIT FOR THAT TDS WOULD HAVE BEEN ALLOWABLE TO THE SUB-CONTRACTOR PARTY I.E. THE ASSESSEE. IT IS R ELEVANT TO MENTION HERE THAT THE PAYMENTS MADE BY THE MAIN CON TRACTEE I.E. PUNJAB STATE WAREHOUSING CORPORATION,MOGA TO M /S. BIKKER SINGH GURDIAL SINGH HAVE BEEN CREDITED TO TH EIR BANK ACCOUNT AND THIS ACCOUNT IS AUTHORIZED TO BE OPERAT ED BY SH.GURMEET SINGH, THE ASSESSEE. THUS, THE CREDIT OF TDS GIVEN BY THE AO TO SH.GURMEET SINGH, THE ASSESSEE, IS IN CONTRAVENTION OF THE PROVISIONS OF SECTION 199(2) O F THE ACT. THERE IS ALSO A DEFAULT U/S 194C(3) ON THE PART OF M/S. BIKKAR SINGH GURDIAL SINGH FOR NOT DEDUCTING TDS FROM THE PAYMENTS MADE TO THE SUB-CONTRACTOR I.E. SH.GURMEET SINGH, T HE ASSESSEE. THE CASE LAW I.E. 208 ITR 372 (CALCUTTA) RELIED UPO N BY THE ASSESSEE AND ACCEPTED BY THE AO IS NOT APPLICABLE IN THE PRESENT CASE, AS IN THAT CASE, THE QUESTION OF GIVI NG CREDIT OF TDS ON THE DIVIDEND EARNED BY SOME THIRD PARTY WAS INVOLVED AND NOT THE QUESTION OF CONTRACT HAVING BEEN OBTAIN ED BY SOME THIRD PARTY AND THEN TRANSFERRED TO SOME OTHER CLAI MANT OF TDS. THE OTHER CASE LAWS RELIED UPON BY THE ASSESSEE ARE ALSO DISTINGUISHABLE ON FACTS. IN VIEW OF THE ABOVE MENTIONED FACTUAL AND LEGAL POSITION, IT IS HELD THAT THE ASSESSMENT FRAMED BY THE AO ON 08.10.2007 U/S 143(3) IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE ASSE SSMENT FRAMED BY THE ITO, WARD-III(40, FARIDKOT ON 08.10.2007 U/S 143(3) OF THE ACT IS CANCELLED U/S 263 OF THE ACT AND THE AO IS DIRECTED TO FRAME FRESH ASSESSMENT, IN THE LIGHT OF THE OBSERVA TIONS MADE BY THE UNDERSIGNED IN THE FOREGOING PARAGRAPH. 6 . THE LD. CIT(A) DISMISSED THE GROUNDS OF THE ASSESSE E AND RELEVANT OBSERVATIONS IN PARA 4 OF HIS ORDER ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 4. AS PER ORDER OF THE LD. CIT, BATHINDA U/S 263 OF THE I.T.ACT, I FIND THAT THE LEARNED CIT, BATHINDA HAS HELD IN HIS ORDER THAT THE PAYMENTS RECEIVED BY SH. GURMEET SIN GH COULD ONLY BE TREATED AS PAYMENTS RECEIVED AS SUB CONTRACTOR, THEREFORE, SH. GURMEET SINGH IS NOT ENT ITLED FOR ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 5 THE CLAIM OF TDS DEDUCTED FROM THE PAYMENTS MADE/RE CEIVED BY BIKKAR SINGH GURDIAL SINGH. THE ASSESSEE APPELLA NT IS ONLY ENTITLED TO CLAIM OF TDS IF IT IS DEDUCTED BY THE FIRM M/S. BIKKER SINGH GURDIAL SINGH U/S 194C(3) OF THE I.T. ACT, 1961. AGAINST THE ORDER U/S 263 OF THE ACT, THE ASS ESSEE APPELLANT HAS FILED AN APPEAL BEFORE THE HONBLE IT AT, AMRITSAR BENCH, AMRITSAR, WHICH HAS BEEN REJECTED V IDE ORDER DATED 30.10.2009 BUT THROUGH MISC. APPLICATIO N NO.15(ASR)/2010 THE HONBLE ITAT HAS RE-CALLED HIS ORDER DATED 30.10.2009 VIDE ORDER DATED 30.03.2012 AND AF TER THAT IT IS STILL PENDING FOR ADJUDICATION. THEREFORE, I N MY VIEW THERE IS NO INFIRMITY IN THE ORDER OF THE AO PASSED BY HIM AS PER DIRECTIONS OF THE LEARNED CIT, BATHINDA U/S 263 OF THE I.T.ACT AND THE AO HAS RIGHTLY DENIED THE REBATE OF TDS. HENCE, THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE APPELLANT ARE REJECTED. 7. THE LD. COUNSEL FOR THE ASSESSEE, MR/ K.R.JAIN, ADVOCATE, AT THE OUTSET ARGUED AND INVITED OUR ATTENTION TO THE ORDE R OF M/S. BIKKER SINGH GURDIAL SINGH, MOGA, WHERE SH. GURMEET SINGH, THE A SSESSEE HAD BEEN EXAMINED AND STATEMENT RECORDED ON 23.12.2009, WHER E HE STATED THAT HE HAD UNDERTAKEN CONTRACT OF M/S. BIKKER SINGH GURDIAL SI NGH AND CARRIED OUT THE CONTRACT IN THE NAME OF M/S. BIKKER SINGH GURDIAL S INGH AND HE HAD DISCLOSED ALL THE GROSS RECEIPTS EARNED FROM PUNJAB STATE WAREHOUSING CORPORATION, IN HIS INCOME TAX RETURN AND CLAIMED T DS OF THE WORK DONE. SIMILARLY, SH. BIKKER SINGH HAS ALSO STATED BEFORE THE AO THAT HE WAS AWARDED WITH A LABOUR CONTRACT FROM M/S. PUNJAB STA TE WAREHOUSING CORPORATION, MOGA, ISSUED IN THE NAME OF M/S. BIKKE R SINGH GURDIAL SINGH, MOGA. HOWEVER, SH. BIKKER SINGH WAS NOT ABLE TO COM PLETE THE CONTRACT. ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 6 HENCE, WITH A MUTUAL AGREEMENT, THE SAID CONTRACT W AS TRANSFERRED TO SH. GURMEET SINGH S/O KASHMIR SINGH, MOHALL PURBIAN, ST REET MISTRIAN, FARIDKOT. THE ASSESSEE FURNISHED THE COPY OF THE AG REEMENT. THE SAID SH. BIKKER SINGH HAD NOT DECLARED ANY INCOME FROM THE S AID CONTRACT AND HAVE NOT CLAIMED TDS. IN HIS RETURN, HE HAS SHOWN INCOM E FROM BUSINESS AND PROFESSION U/S 44AE OF THE ACT AND INCOME FROM COM MISSION AND LABOUR CONTRACT WAS ACCEPTED BY THE ITO, WARD III(4), FARI DKOT VIDE ORDER DATED 30.12.2009, WHICH IS PLACED ON RECORD. THE SAID AS SESSMENT OF SH.BIKKER SINGH HAS BEEN MADE U/S 143(3)/147 OF THE ACT DATED 31.10.2009. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, ARGUED THAT TH E INCOME-TAX DEPARTMENT ITSELF HAS ACCEPTED THAT SH. BIKKER SINGH IS THE PR OP. OF M/S. BIKKER SINGH GURDIAL SINGH, WHO HAS NOT BEEN ABLE TO COMPLETE TH E CONTRACT AND ON MUTUAL AGREEMENT THE SAME WAS TRANSFERRED TO THE P RESENT ASSESSEE AND ALSO STATEMENT OF THE ASSESSEE, SH.GURMIT SINGH, WAS REC ORDED BY THE AO OF SH.BIKKER SINGH AND ACCORDINGLY HAVING ACCEPTED THE RETURN OF INCOME OF SH. BIKKER SINGH, WHERE HE HAS NOT CLAIMED ANY CONT RACT RECEIPT OF ANY INCOME EARNED FROM THE SAID CONTRACT. ACCORDINGLY, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE AO AND PRA YED THE BENCH TO ALLOW THE CLAIM OF THE ASSESSEE AND ALLOW ALL THE GROUNDS RAISED. ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 7 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE OR DERS OF BOTH THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. A PERUSAL OF THE ORDER OF SH. BIKKER SINGH PROP. O F M/S. BIKKER SINGH GURDIAL SINGH FOR THE ASSESSMENT YEAR 2005-06 WHERE THE INCOME TAX DEPARTMENT, HAS ACCEPTED THE RETURN OF INCOME FILED BY SH. BIKKER SINGH AS IT IS, WHERE HE HAS NOT DECLARED THE IMPUGNED CONTR ACT OR ANY INCOME THEREFROM OR HAS NOT CLAIMED TDS SINCE THE CONTRAC T WAS TRANSFERRED TO THE ASSESSEE SH.GURMEET SINGH AND SH.GURMEET SINGH HAS STATED BEFORE THE AO OF SH. BIKKER SINGH THAT THE ASSESSEE HAS CARRIED O UT THE CONTRACT AND HAS SUBMITTED THE AFFIDAVIT IN THIS REGARD THAT THE ASS ESSEE HAS DECLARED CONTRACT WORK FROM PUNJAB STATE WAREHOUSING CORPORATION AND DISCLOSED THE GROSS RECEIPTS EARNED FROM PUNJAB STATE WAREHOUSING CORPO RATION AND INCOME THEREFROM AND HAVE CLAIMED TDS REFUND OF THE WORK DONE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DEPARTMENT DOES NOT HAVE ANY CASE AND THE LD. CIT(A) IS NOT JUSTIFIED IN NOT ALLOWING THE CREDIT OF TDS TO THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSE D AND THE AO IS DIRECTED TO ALLOW THE TDS SO CLAIMED, IN VIEW OF OUR FINDING S HEREINABOVE. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. ITA NO.319(ASR)/2014 ITA NO.233(ASR)/2009 8 10. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA N O.233(ASR)/2014. SINCE THE AO, IN VIEW OF THE DIRECTIONS OF THE LD. CIT PASSED U/S 263 OF THE ACT, HAS COMPLETED THE ASSESSMENT U/S 143(3)/263 OF THE ACT AND THE LD. CIT(A) HAVING CONFIRMED THE ACTION OF THE AO, WE H AVE DIRECTED THE AO TO ALLOW THE CLAIM OF THE ASSESSEE, IN VIEW OF OUR FIN DINGS GIVEN HEREINABOVE IN ITA NO.319(ASR)/2014, THE APPEAL FILED BY THE ASSES SEE IN ITA NO. 233(ASR)/2014 AGAINST THE ORDER OF THE LD. CIT U/S 263 BECOMES INFRUCTUOUS AND ACCORDINGLY, WE DISMISS THE SAME. THUS, ALL THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.319(ASR)/2014 IS ALLOWED AND APPEAL IN ITA NO.233(ASR)/2014 IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD MARCH, 2015. SD/- SD/- (A.D.JAIN) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23RD MARCH, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.GURMEET SINGH, LABOUR CONTRACTOR 2. THE WARD-III(4), FARIDKOT. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.