R.V. Electrotech Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 3788/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2995 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V K TULSIYAN
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.3788/DEL/2017 ASSESSMENT YEAR : 2012-13 R. V. ELECTROTECH PVT. LTD., 304, LAXMAN PALACE, 19, VEER SAVARKAR BLOCK, SHAKKARPUR, DELHI. VS. ITO, WARD- 20(4), NEW DELHI PAN : AAACR5695K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. K. TULSIYAN, CA DEPARTMENT BY : MS. YAMINI, SR.DR DATE OF HEARING : 22-11-2017 DATE OF PRONOUNCEMENT : 07-12-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 08.03.2017 OF THE LD. CIT(A)- 36, NEW DELHI RELATIN G TO ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF JOB WORK AND TRA DING. IT FILED ITS RETURN OF INCOME ON 29.09.2012 DECLARING TOTAL INCOME OF RS.5 0,930/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OB SERVED THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.49,95,000/- UNDER THE HEAD COMMISSION AGAINST WHICH TAX DEDUCTED HAS BEEN CLAIMED AT RS.4,99,500/ -. A PERUSAL OF THE CHALLAN FOR PAYMENT OF TAX DEDUCTED AT SOURCE INTO GOVERNME NT ACCOUNT REVEALED THAT AN 2 ITA NO.3788/DEL/2017 AMOUNT OF RS.2,77,000/- HAS BEEN DEPOSITED INTO GOV ERNMENT ACCOUNT ON 05.07.2014. SINCE THE SAID DEPOSIT WAS NOT MADE WI THIN THE STATUTORY TIME PERIOD, THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.27,70,000/- U/S 40(A)(IA) OF THE I.T. ACT. 3. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH AT NO AMOUNT WAS PAYABLE TO THE ASSESSEE. THEREFORE, IN VIEW OF THE DECISIO N OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPOR TS, NO ADDITION CAN BE MADE U/S 40(A)(IA) OF THE I.T. ACT. HOWEVER, LD. CIT(A) DID NOT AGREE WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND CONFIRMED TH E ADDITION MADE BY THE ASSESSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. WHETHER THE LD. CIT(A) WAS JUSTIFIED BY UPHOLDI NG THE ORDER OF A.O. U/S 40(A)(IA) ON ALREADY PAID COMMISSION RS.17,50,000/- ON WHICH TDS WAS ADMITTEDLY WAS DEPOSITED ON 05.07.2014. 2. WHETHER THE LD. CIT(A) WAS JUSTIFIED BY UPHOLDIN G THE ORDER OF A.O. U/S 40(A)(IA) ON COMMISSION PAYABLE OF RS.10,20,000/- A S ON 31.03.2012 ON WHICH TDS HAS BEEN DEPOSITED ON 05.07.2014. 3. WHETHER THE LD. CIT(A) WAS JUSTIFIED BY EXAGGERA TING THE ORDER BY WAY OF CHARGEABILITY OF INTEREST U/S 201(1A), WHEREAS THER E WAS NO CASE OF A.O., SUO-MOTO IN A MECHANICAL WAY MANNER. THAT THE APPELLATE CRAVES LEAVES TO AMEND, ALTER OR TO RAISE ANY OTHER GROUND AT THE TIME OF THE HEARING. 5. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMI TTED THAT PAYEE HAS ALREADY DECLARED THE COMMISSION IN ITS RETURN OF INCOME AND PAID THE TAX THEREON. REFERRING TO THE SECOND PROVISO TO SECTION 40(A)(IA ) HE SUBMITTED THAT THE SAME WAS INSERTED BY THE FINANCE ACT, 2012 WITH EFFECT F ROM 1ST APRIL, 2013. THE 3 ITA NO.3788/DEL/2017 EFFECT OF THE SAID PROVISO IS TO INTRODUCE A LEGAL FICTION WHERE AN ASSESSEE FAILS TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF CHA PTER XVII B. WHERE SUCH ASSESSEE IS DEEMED NOT TO BE AN ASSESSEE IN DEFAULT IN TERMS OF THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201 OF THE I.T. ACT, THEN, IN SUCH EVENT, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT P AYEE REFERRED TO IN THE SAID PROVISO. HE SUBMITTED THAT THE ISSUE STANDS DECID ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD. REPORTED IN 61 TAXMANN.C OM 45 (DELHI). HE ACCORDINGLY SUBMITTED THAT HE HAS NO OBJECTION IF T HE MATTER IS RESTORED TO FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE THAT THE PAYEE HAS OFFERED THE IN COME TO TAX AND IN THAT CASE NO ADDITION CAN BE MADE U/S 40(A)(IA). 6. LD. DR ON THE OTHER HAND WHILE SUPPORTING THE OR DER OF THE LD. CIT(A) FAIRLY SUBMITTED THAT SHE HAS NO OBJECTION IF THE M ATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN O PPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF T HE ASSESSING OFFICER THAT THE PAYEE HAS OFFERED THE INCOME TO TAX AND PAID THE TA XES THEREON. 7. I HAVE CONSIDERED THE ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECIS IONS CITED BEFORE ME. I FIND 4 ITA NO.3788/DEL/2017 THE ASSESSING OFFICER MADE ADDITION OF RS.27,70,000 /- U/S 40(A)(IA) ON THE GROUND THAT THE ASSESSEE HAS NOT DEPOSITED THE TDS OF RS.2,77,000/- BEFORE THE SPECIFIED DATE. I FIND THE ABOVE ADDITION HAS BEEN CONFIRMED BY THE LD. CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE THAT THE PAYEE HAS ALREADY DECLARED SUCH INCOME AND PAID THE TAXES THEREON AND , THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANSAL LANDMARK TOWNSHIP (P) LTD. (SUPRA) THE ASSESSEE IS DEEMED NOT TO BE AN ASSESSEE IN DEFAULT. THEREFORE, IN TERMS OF THE FI RST PROVISO TO SUB-SECTION 1 OF SECTION 201 OF THE I.T. ACT, I FIND MERIT IN THE AB OVE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. HOWEVER, THE ONUS IS ON THE ASSESSEE TO PROVE WITH SUFFICIENT EVIDENCE TO THE SATISFACTION OF THE ASSE SSING OFFICER THAT THE PAYEE HAS DECLARED SUCH INCOME IN ITS RETURN OF INCOME AND PA ID THE TAXES THEREON. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO T HE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSE SSEE TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION THAT THE PAYEE HAS OFF ERED THE INCOME TO TAX AND PAID THE DUE TAXES THEREON. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSE SSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO.3788/DEL/2017 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DAY OF DECEMBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 07-12-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI