JEHANGIR H.C. JEHANGIR, MUMBAI V. ACIT 12(3), MUMBAI

ITA 4052/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100798 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 16-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONHARDR
• Keywords: Opportunity of being heard

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.4052/MUM/2013 ASSESSMENT YEAR: 2005-06 JEHANGIR H.C. JEHANGIR, READYMONEY MANSION, 43, VIR NARIMAN ROAD, MUMBAI-400001 / VS. ACIT-12(3), MUMBAI ( !' # /ASSESSEE) ( $ / REVENUE) P.A. NO. AFOPJ 6023P !' # / ASSESSEE BY NONE $ / REVENUE BY SHRI PEEYUSH SONHAR-DR $% & # ' / DATE OF HEARING : 19/08/2015 & # ' / DATE OF ORDER: 20/08/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 29/01/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ON THE GROUND AS RAISED IN THE GROUNDS OF APPEAL. 2. DURING HEARING OF THIS APPEAL, SHRI PEEYUSH SONHAR, LD. DR, WAS PRESENT FOR THE REVENUE. NONE W AS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, THE LD. COUNSEL JEHANGIR H.C. JEHANGIR ITA NO.4025/MUM/2013 2 FOR THE REVENUE CONTENDED THAT THE TRIBUNAL VIDE OR DER DATED 18/06/2015 (ITA NO.2050/MUM/2009) SENT THE MATTER O F DISALLOWANCE, ON THE BASIS OF WHICH PENALTY WAS LEV IED, TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) FOR FRESH EXAMINATION. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION OF THE ORDER OF THE TRIBUNAL DATED 18/06/2015 FOR READ Y REFERENCE AND PERUSAL. THIS APPEAL OF THE ASSESSEE WAS DISPOSED OFF BY TH E TRIBUNAL ON 16.05.2012. BEFORE THE TRIBUNAL, THE ASSESSEE HAD RAISED AN ADDITIONAL GROUND WITH REGAR D TO DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S.40(A )(IA) OF THE ACT FOR NONE DEDUCTION OF TAX OF SOURCE U/S. 194J OF THE ACT. SINCE THE ASSESSEE DID NOT AGITATE THIS GR OUND BEFORE LD.CIT(A), THE TRIBUNAL DECLINED TO ADJUDICA TE THE SAME ON THE REASONING THAT THE SAID GROUND DOES NOT ARISE OUT OF ORDER OF FIRST APPELLATE AUTHORITY. AGGRIEVED BY THE DECISION TAKEN BY THE TRIBUNAL, TH E ASSESSEE PREFERRED APPEAL BEFORE THE HONBLE HIGH COURT OF BOMBAY. THE HONBLE HIGH COURT, VIDE ITS ORDER DATED 07.11.2014 PASSED IN ITA NO.1208 OF 201 2, SET ASIDE THE ORDER OF TRIBUNAL ON THE ABOVE SAID I SSUE AND RESTORED THE SAME TO THE FILE OF THE TRIBUNAL W ITH THE DIRECTION TO HEAR THE SAME. JEHANGIR H.C. JEHANGIR ITA NO.4025/MUM/2013 3 2. WE HAVE HEARD THE PARTIES ON THIS ISSUE. LD. COU NSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSES SEE HAD PAID PROJECT MANAGEMENT FEE OF RS.7,41,225/- TO M/S. GODREJ PROPERTIES LTD IN CONNECTION WITH THE DEVELOPMENT OF A PROPERTY LOCATED AT PUNE AND CLAIM ED THE SAME AS DEDUCTION. THE ASSESSING OFFICER TOOK T HE VIEW THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE U/S.194J OF THE ACT ON THE ABOVE SAID PAYMEN T AND SINCE THE ASSESSEE HAS FAILED TO DEDUCT TDS, TH E AO DISALLOWED THE SAID EXPENDITURE AS PER THE PROVISIO NS OF U/S.40(A)(IA) OF THE ACT. THE LD. COUNSEL SUBMITTED THAT THE PAYMENT MADE TO M/S. GODREJ PROPERTIES LTD. CAN NOT BE CONSIDERED AS FEE FOR PROFESSIONAL SERVICES FALL ING WITHIN THE PURVIEW OF SEC.194J OF THE ACT. HE SUBMI TTED THAT, AT THE MOST, IT MAY BE A PAYMENT FALLING WITH IN THE PURVIEW OF S.194C OF THE ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE, BEING AN INDIVIDUAL, IS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S.194C OF THE ACT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, H E SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED IN DISALLOWING THE ABOVE SAID PAYMENT U/S 40(A)(IA) OF THE ACT. 3. HOWEVER, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS URGED THIS ISSUE FOR THE FIRST TIME BEFORE THE TRIB UNAL AND FACT RELATING TO THE SAME REQUIRES VERIFICATION. FU RTHER THERE WAS NO OCCASION FOR THE LD.CIT(A) TO ADJUDICA TE THIS ISSUE, SINCE THE ASSESSEE DID NOT CONTEST THE SAME BEFORE HIM AND HENCE THE VIEW OF FIRST APPELLATE JEHANGIR H.C. JEHANGIR ITA NO.4025/MUM/2013 4 AUTHORITY IS NOT ALSO AVAILABLE ON RECORD. ACCORDIN GLY, THE LD. DR CONTENDED THAT THIS ISSUE REQUIRES EXAMINATION AT THE END OF THE LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND WE FIND MERIT ON IN THE CONTENTIONS PUT FORTH BY LD. DR. ADMITTEDLY THIS GROUND RELATING TO DISALLOWANCE U/S.40(A)(IA) OF THE ACT WAS NOT URGED BEFORE THE L D. CIT(A) AND HENCE THERE WAS NO OCCASION FOR THE FIRS T APPELLATE AUTHORITY TO ADJUDICATE THE SAME. HENCE, THIS ISSUE DOES NOT ARISE OUT OF THE ORDER OF LD.CIT(A). FURTHER, THE VARIOUS CONTENTIONS PUT FORTH BY LD. A R, IN OUR VIEW, REQUIRE EXAMINATION WITH REFERENCE TO THE RELEVANT MATERIALS. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRE EXAMINATION AT THE END OF LD. CI T(A). ACCORDINGLY, WE RESTORE THIS ISSUE TO THE FILE OF L D.CIT(A) WITH A DIRECTION TO ADJUDICATE THE SAME AS EARLY AS POSSIBLE. 5. IN THE RESULT, THE ADDITIONAL GROUND RAISED BY T HE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 2.2. WE NOTE THAT THE ASSESSING OFFICER MADE DISALLOWANCE OF THE EXPENDITURE AS PER THE PROVISIO NS OF SECTION 40(A)(IA) OF THE ACT, ON THE PLEA OF THE A SSESSEE THAT THE DISALLOWANCE WAS WRONGLY MADE. SINCE, THE ISSU E OF DISALLOWANCE ON THE BASIS OF WHICH PENALTY U/S 271( 1)(C) OF THE ACT WAS LEVIED WAS SENT TO THE FILE OF THE LD. FIRS T APPELLATE AUTHORITY, THEREFORE, THE PENALTY APPEAL IS ALSO RE MANDED TO JEHANGIR H.C. JEHANGIR ITA NO.4025/MUM/2013 5 THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APP EALS) FOR ADJUDICATION ON MERIT, MORE SPECIFICALLY, WHEN THE PENALTY IS OFFSHOOT OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE ASSESSEE BE GIVEN OPPORTUNITY OF BEING HEARD. T HUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 19/08/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED : 20/08/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI 5. 3$4 .# , 0 *+' * 5 , % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI