PRATIBHA JV, MUMBAI V. DCIT 22(2), NAVI MUMBAI

ITA 3923/MUM/2012

• Counselvise Citation: 392319914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDRAJIT SINGH
• Assessee Lawyers: H V DATAR

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . . , / !' , # $ % BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER . / ITA NO. 3923/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2008-09 M/S.PRATIBHA JV, C/O. JAYESH SANGHRAJKA & CO. CHARTERED ACCOUNTANTS, UNIT NO.405, HIND RAJASTHAN CENTRE, DS PHALKE ROAD, DADAR(E), MUMBAI 400 014. / VS. THE DCIT -22(2), INCOME TAX OFFICE, ABOVE VASHI RLY. STATION, NAVI MUMBAI. ( # ./ )* ./ PAN/GIR NO. : AAAAP 7803M ( (+ / APPELLANT ) .. ( ,-(+ / RESPONDENT ) APPELLANT BY SHRI H.V.DATAR RESPONDENT BY : SHRI CHANDRAJIT SINGH . /# / DATE OF HEARING : 25/09//2013 01' . /# / DATE OF PRONOUNCEMENT : 25/09/2013 2 / O R D E R PER I.P.BANSAL, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)33, MUMBAI DATED 31/3/2012 FOR ASSESSMENT YEAR 2008- 09. GROUNDS OF APPEAL READ AS UNDER: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND J UDICIAL PROPOSITION, APPELLATE ORDER OF LD. CIT (APPEALS) IS BAD IN LAW AND ERRONE OUS IN FACTS AND LIABLE TO BE QUASHED. . / ITA NO. 3923/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2008-09 2 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND JU DICIAL PROPOSITION, LD. CIT (APPEALS) ERRED IN MAKING THE DISALLOWANCES OF EXPE NSES ON ACCOUNT OF LATE PAYMENT OF TDS WITHOUT GIVING ANY NOTICE UNDER SECT ION 251 WHICH IS BAD IN LAW AND ERRONEOUS IN FACTS AND LIABLE TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND J UDICIAL PROPOSITION, LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN MAKIN G THE DISALLOWANCES OF EXPENSES ON ACCOUNT OF LATE PAYMENT OF TDS WHICH LD . ASSESSING OFFICER HAD NOT MADE IN ASSESSMENT ORDER, SUCH DISALLOWANCE IS BAD IN LAW AND ERRONEOUS IN FACTS AND LIABLE TO BE DELETED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND J UDICIAL PROPOSITION, LD. CIT (A) ERRED IN FRAMING AN APPELLATE ORDER THAT ENFORCED T HE APPELLANT TO FILE FURTHER APPEAL AND HENCE, SUITABLE COSTS MAY BE AWARDED TO THE APPELLANT FOR THE SAME. 2. AT THE TIME OF HEARING LD. AR SUBMITTED THAT ASS ESSEE DOES NOT WANT TO PRESS GROUND NO.1,2 & 4. ACCORDINGLY, THESE GROUND S ARE DISMISSED AS WITHDRAWN. HE SUBMITTED THAT THE ONLY GRIEVANCE OF THE ASSESSEE IS REPRESENTED IN GROUND NO.3 AND THE FACTS RELATING T O THIS GROUND ARE THAT A SUM OF RS.7,43,955/- HAS BEEN HELD TO BE DISALLOWAB LE BY LD. CIT(A) ON ACCOUNT OF LATE PAYMENT OF TDS WHICH, HOWEVER, HAS BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN, WHICH IN THE PRESENT CASE IS STATED AS 30/9/2008. THE DETAILS OF THE TDS AS WELL AS DATE OF PAYMENT THERE OF IS DESCRIBED IN THE REMAND REPORT SUBMITTED BY THE AO BEFORE LD. CIT(A) VIDE LETTER DATED 26/3/2012 AND THE SAME IS HAS ALSO HAS BEEN REPROD UCED IN THE ORDER OF LD. CIT(A). THE DETAIL IS AS UNDER: S.NO. PARTICULARS AMOUNT PAID ON 1. TDS PROFESSIONAL FEES 6944 09.04.2008 2. 2893 28.07.2008 3. TDS PROFESSIONAL FEES PAYABLE 62388 09.04.2008 4. 6468 21.04.2008 5. TDS RENT (HIRING) CHARGE 27398 09.04.2008 6. TDS SUB CONTRACT CO LTD. PAYABLE 5062 09.04.20 08 7. TDS SUB CONTRACT PAYABLE 119551 09.04.2008 1133 09.04.2008 TOTAL 231837 2.1 LD. AR SUBMITTED THAT THE DISPUTE AS DESCRIBED IN GROUND NO.3 WHICH RELATES TO DISALLOWANCE OF RS.7,43,955/- ON WHICH, ACCORDING TO LD. CIT(A) THE TAX WAS DEPOSITED BEYOND THE DUE DATE. HE SUBMITTE D THAT ACCORDING TO WELL . / ITA NO. 3923/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2008-09 3 ESTABLISHED LAW IF THE PAYMENT IS MADE BEFORE THE D UE DATE OF FILING THE RETURN THEN DISALLOWANCE CANNOT BE MADE. HE IN THIS REGAR D REFERRED TO THE PAPER BOOK IN WHICH COPIES OF THESE DECISIONS ARE ENCLOSE D AS UNDER: S.NO. CONTENT PAGE NO. 1. CIT VS. VIRGIN CREATIONS 1 2. CIT VS. M/S. JK CONSTRUCTION CO. 2-3 3. CIT VS. MR. RAJINDER KUMAR 4-16 4. PIYUSH MEHTA V/S. ACIT 17-25 5. MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. VS. ACIT 26-51 6. M/S.BANSAL PARIVAHAN (INDIA) PVT. LTD. VS. ITO 5 2-73 7. ITO V/S. SK MOFIZUL ALI PURBA MEDINIPUR 74-77 8. M/S.DESIGNER EXPORTS VS. DCIT 78-81 9. SHRI KANUBHAI RAMJIBHAI MAKWANA V/S. ITO 82-92` 10. B.M.S. PROJECTS PVT. LTD. V/S. DCIT 93-105 11. RANA BUILDERS V/S. ITO 106-115 12. PUNJAB STATE CO-OPERATIVE FEDERATION OF HOUSING BUILDING SOCIETIES LTD. VS. DCIT 116-121 IN AFOREMENTIONED CASES IT HAS BEEN HELD THAT AMEN DMENT MADE IN THE PROVISIONS BY FINANCE ACT, 2010 BEING REMEDIAL / CU RATIVE IN NATURE HAVE RETROSPECTIVE APPLICATION. FOR THE SAKE OF BREVIT Y WE MAY REPRODUCE THE RELEVANT OBSERVATION OF MUMBAI TRIBUNAL IN THE CASE OF BANSAL PARIVAHAN INDIA LTD., DECISION DATED 22/9/2010 IN ITA NO.2355/MUM/2 010. 28. THE ASSESSEE IN THE PRESENT CASE THUS HAD NOT ONLY DEDUCTED TAX AT SOURCE FROM THE PAYMENTS OF FREIGHT CHARGES MADE DURING TH E PERIOD 1.4.2005 TO 28.2.2006, BUT THE TAX SO DEDUCTED WAS ALSO ENTIREL Y PAID BY HIM TO THE CREDIT OF THE GOVERNMENT ALTHOUGH BEYOND THE DUE DATE AS STIP ULATED IN SECTION 200 BUT BEFORE THE DUE DATE OF FILING OF HIS RETURN OF INCO ME FOR THE YEAR UNDER CONSIDERATION. THE RELEVANT TDS PROVISIONS THUS WER E SUBSTANTIALLY COMPLIED BY HIM AND HE WAS IN A POSITION TO ESTABLISH SUCH COMP LIANCE BY FILING THE REQUIRED DOCUMENTARY EVIDENCE ALONG WITH HIS RETURN OF INCOM E. STILL HE WAS MADE TO SUFFER BY WAY OF A DISALLOWANCE OF FREIGHT CHARGES FOR WHICH HE WAS OTHERWISE ELIGIBLE FOR DEDUCTION GIVING RISE TO A HUGE DEMAND AS PER THE PROVISIONS OF SECTION 40(A)(IA) WHICH WAS NEVER THE LEGISLATIVE INTENTION BEHIND ENACTING THE SAID PROVISIONS. THE PROVISIONS OF SECTION 40(A)(IA) AS STOOD PRIOR TO THE AMENDMENTS MADE BY THE FINANCE ACT 2010 THUS WERE RESULTING IN TO UNINTENDED CONSEQUENCES AND CAUSING GRAVE AND GENUINE HARDSHIPS TO THE ASSE SSEES WHO HAD SUBSTANTIALLY COMPLIED WITH THE RELEVANT TDS PROVIS IONS BY DEDUCTING THE TAX AT SOURCE AND BY PAYING THE SAME TO THE CREDIT OF THE GOVERNMENT BEFORE THE DUE DATE OF FILING OF THEIR RETURNS U/S 139(1). IN ORDE R TO REMEDY THIS POSITION AND TO . / ITA NO. 3923/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2008-09 4 REMOVE THE HARDSHIPS WHICH WAS BEING CAUSED TO THE ASSESSEES BELONGING TO SUCH CATEGORY, AMENDMENTS HAVE BEEN MADE IN THE PRO VISIONS OF SECTION 40(A)(IA) BY THE FINANCE ACT 2010. THE SAID AMENDMENTS, IN OU R OPINION, THUS ARE CLEARLY REMEDIAL/CURATIVE IN NATURE AS HELD BY HONBLE SUPR EME COURT IN THE CASE OF ALLIED MOTORS PVT. LTD. (SUPRA) AND ALOM EXTRUSIONS LTD. (SUPRA) AND THE SAME THEREFORE WOULD APPLY RETROSPECTIVELY W.E.F. 1ST AP RIL, 2005. IN THE CASE OF R.B. JODHA MAL KUTHIALA 82 ITR 570, IT WAS HELD BY THE H ONBLE SUPREME COURT THAT A PROVISO WHICH IS INSERTED TO REMEDY UNINTENDED CONS EQUENCES AND TO MAKE THE PROVISION WORKABLE, REQUIRES TO BE TREATED AS RETRO SPECTIVE IN OPERATION SO THAT A REASONABLE INTERPRETATION CAN BE GIVEN TO THE SECTI ON AS A WHOLE. IN THE PRESENT CASE, THE AMOUNT OF TAX DEDUCTED AT SOURCE FROM THE FREIGHT CHARGES DURING THE PERIOD 01/04/2005 TO 28/02/2006 WAS PAID BY THE ASS ESSEE IN THE MONTHS OF JULY AND AUGUST 2006 I.E WELL BEFORE THE DUE DATE O F FILING OF ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THIS BEING THE UN DISPUTED POSITION, WE HOLD THAT THE DISALLOWANCE MADE BY THE A.O. AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF FREIGHT CHARGES BY INVOKING THE PROVISIO NS OF SECTION 40(A)(IA) IS NOT SUSTAINABLE AS PER THE AMENDMENTS MADE IN THE SAID PROVISIONS BY THE FINANCE. ACT, 2010 WHICH, BEING REMEDIAL/CURATIVE IN NATURE, HAVE RETROSPECTIVE APPLICATION. ACCORDINGLY, WE DELETE THE SAID DISALL OWANCE AND ALLOW GROUND NO. 2 OF THIS APPEAL. 3. ACCORDINGLY, RESPECTFULLY FOLLOWING THE DECISION S RELIED UPON BY LD. AR, AFTER HEARING BOTH THE PARTIES WE ARE OF THE OPINIO N THAT DISALLOWANCE CANNOT BE MADE IF THE DEPOSITS ARE MADE BEFORE THE DUE DATE OF FILING THE RETURN AS DESCRIBED IN SECTION 139(1). AS THERE IS NO DISPUT E SO AS IT RELATES TO DATE OF DEPOSIT OF TAX AND THESE DATES ARE STATED IN THE RE MAND REPORT ITSELF WE DIRECT THE AO TO DELETE DISALLOWANCE OF RS.7,43, 955/- 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 25/09/2013 2 . 01' # 3 45 25 /09/2013 1 . 6 % SD/- SD/ - ( !' / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 4 DATED 25/09/2013 . / ITA NO. 3923/MUM/2012 ' ' ' ' / ASSESSMENT YEAR 2008-09 5 2 2 2 2 . .. . ,/78 ,/78 ,/78 ,/78 98'/ 98'/ 98'/ 98'/ / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. 8;6 ,/ , , / DR, ITAT, MUMBAI 6. 6< = / GUARD FILE. 2 2 2 2 / BY ORDER, -8/ ,/ //TRUE COPY// > >> > / ? ? ? ? ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS