Sri K C Purushothama , Holalkere V. Income Tax Officer Ward-1 , Chitradurga

ITA 381/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8069 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAMASUBRAMANYAM
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 40A(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.381/BANG/2018 ASSESSMENT YEAR : 2009-10 SHRI K.C PURUSHOTHAMA, CIVIL CONTRACTOR, YADAVA BEEDHI, HOLALKERE. PAN AHSPP 2648 G VS. THE INCOME-TAX OFFICER, WARD-1, CHITRADURGA. APPELLANT RESPONDENT APPELLANT BY : SHRI RAMASUBRAMANYAM, C.A RESPONDENT BY : SHRI R.N SIDDAPPAJI, ADDL. CIT (DR) DATE OF HEARING : 11.07.2019 DATE OF PRONOUNCEMENT : 12.07.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 13/8/2017 PASSED BY LD CIT(A), DAVENGERE AND IT RELATES TO ASST. YEAR 2009-10. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE DISALLOWANCE MADE U/S 40A(3) OF THE ACT. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSEE IS A CONTRACTOR. DURING THE COURSE OF ASST. PROCEEDIN GS, THE AO NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS BY WAY OF CASH TO VARIOUS TRADE CREDITORS TO THE TUNE OF RS.17.52 LAK HS. THE AO ASKED ITA NO.381/BANG/2018 PAGE 2 OF 4 THE ASSESSEE TO EXPLAIN AS TO WHY THE ABOVE SAID TR ANSACTIONS WILL NOT ATTRACT PROVISIONS OF SEC.40A(3) OF THE ACT. S INCE THERE WAS NO RESPONSE TO VARIOUS NOTICES ISSUED, THE AO DISALLOW ED RS.17.52 LAKHS U/S 40A(3) OF THE ACT. 4. BEFORE THE LD CIT(A), THE ASSESSEE FURNISHED AFFIDAVITS OBTAINED FROM PERSONS TO CONTEND THAT THE PROVISIONS OF SEC. 40A(3) ARE NOT ATTRACTED. THE LD CIT(A) WAS OF THE VIEW THAT THE AVERMENT MADE IN THE AFFIDAVITS WERE CONTRADICTORY TO THE POSITION T AKEN IN THE GROUNDS OF APPEAL AND ACCORDINGLY CONFIRMED THE DIS ALLOWANCE. 5. THE LD AR APPEARING FOR THE ASSESSEE SUBMITTED T HAT THERE IS NO SUCH CONTRADICTION, AS POINTED OUT BY LD CIT(A) . THE LD AR SUBMITTED THAT THE ASSESSEE IS A CIVIL CONTRACTOR A ND IS CONSTRAINED TO MAKE PAYMENTS BY WAY OF CASH TO WORKERS. THE PA YMENTS WERE WITHDRAWN BY SUPERVISORS FOR MAKING PAYMENTS TO LAB OURERS AND THE AMOUNT SO PAID TO EACH OF THEM WAS LESS THAN TH E LIMITS PRESCRIBED U/S 40A(3) OF THE ACT. THE ASSESSEE HAS OBTAINED AFFIDAVITS IN SUPPORT OF THE ABOVE SAID EXPLANATION S. HE SUBMITTED THAT THESE FACTS HAVE NOT BEEN VERIFIED BY THE TAX AUTHORITIES AND ACCORDINGLY PRAYED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO FOR EXAMINING IT AFRESH. 6. ON THE CONTRARY, THE LD DR SUBMITTED THAT THE AS SESSEE DID NOT COOPERATE WITH THE AO AND HENCE, THE AO WAS CON STRAINED TO PASS THE ASST. ORDER TO THE BEST OF HIS JUDGMENT U/ S 144 OF THE ACT. THE AFFIDAVITS FILED BEFORE THE LD CIT(A) WAS FOUND TO BE ITA NO.381/BANG/2018 PAGE 3 OF 4 CONTRADICTORY TO THE GROUNDS OF APPEAL. ACCORDINGL Y HE SUBMITTED THAT THE ORDER PASSED BY LD CIT(A) DOES NOT CALL FO R ANY INTERFERENCE. 6. HAVING HEARD THE RIVAL SUBMISSIONS, IN THE INTER EST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ASSESSEE MAY B E PROVIDED WITH ONE MORE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM. AC CORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE THI S ISSUE TO THE FILE OF THE AO FOR EXAMINING IT AFRESH BY DULY CONSIDERI NG THE INFORMATION/ EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO COOPERATE WITH THE A O FOR EXPEDITIOUS COMPLETION OF THE ASSESSMENT. AFTER AFFORDING ADEQ UATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO MAY TAKE APP ROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JULY, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 12 TH JULY, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3 . THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, BANGALORE. ITA NO.381/BANG/2018 PAGE 4 OF 4 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. DICTATION NOTE ENCLOSED . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..