ACIT, CIR-8, Nagpur V. M/S AVTAR & COMPANY, Nagpur

ITA 41/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1682 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: K S BAHRI
• Keywords: Question of law

Judgement Text

1 ITA NO. 41/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 41/NAG/2014 ASSESSMENT YEAR : 2009 - 10. ASSTT. COMMISSIONER OF INCOME - TAX, M/S AVTAR & COMPANY, CIRCLE - 8, NAGPUR. V/S. 103, SETHI APARTMENT, KADBI C HOWK, NAGPUR. PAN AADFA3128Q APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI K.S. BAHRI. DATE OF HEARING : 2 9 - 07 - 2015 DATE OF PRONOUNCEMENT : 28 TH AUGUST, 2015 O R D E R PER SHAMIM YAHYA, A.M. . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 12 - 11 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUNDS OF APPEAL READ AS UNDER : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) HAS ERRED IN HOLDING THAT THE AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT BY FINANCE ACT 2010 WAS RETROSPECTIVE FROM 01/04/2005, WHEREAS AS PER THE ACT THE SAID AMENDMENT IS PROKSPECTIVE W.E.F. 01 - 04 - 2010 I.E. FROM A.Y. 2010 - 11 ONWARDS? 2 ITA NO. 41/NAG/2014 2. WHETHER THE LD. CIT(A) DID NOT APPRECIA TE THAT TDS AMOUNTS DEDUCTED DURING THE JANUARY TO FEBRUARY OF THE PREVIOUS YEAR WAS REQUIRED TO BE DEPOSITED ON OR BEFORE THE LAST DAY OF THE PREVIOUS YEAR AND NOT ON OR BEFORE THE DUE DATE OF FILING RETURN U/S 139(1) AS HELD, TO AVOID ATTRACTING THE PROVISION OF SEC. 40(A)(IA)? 2. BRIEF FACTS OF THE CASE ARE AS UNDER : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND HANDLING OF VARIOUS CONTRACTUAL WORKS . DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD DEDUCTED TDS IN RESPECT OF CERTAIN EXPENSES TOWARDS PAYMENT TO TRANSPORTERS AND FOR RENT AND HAD NOT DEPOSITED THE SAME IN THE MONTHS OF JANUARY AND F EBRUARY, 2009. COMPLETE DETAILS IN THIS RESPECT HAVE BEEN GIVEN BY THE ASSESSING OFFICER IN TABULAR FORM ON PAGE 2 TO 4 OF HER ASSESSMENT ORDER. THE ASSESSING OFFICER FURTHER NOTED THAT WHILE THE ASSESSEE HAD DEDUCTED TDS IN THE MONTH OF JANUARY AND FEBRUA RY, 2009 AND SINCE THE SAID AMOUNT WAS REQUIRED TO BE DEPOSITED BY THE ASSESSEE BY MARCH, 2009 AND THAT SINCE THE ASSESSEE HAD DEPOSITED THE TDS BEYOND MARCH, 2009, THE PROVISIONS OF SECTION 40(A)(IA) WOULD BECOME APPLICABLE AND SHE THEREFORE ADDED AN AMOU NT OF ` .3,14,99,000/ - TO THE INCOME OF THE ASSESSEE. 3. BEFORE THE LEARNED CIT(APPEALS) IT WAS SUBMITTED BY THE ASSESSEE THAT DURING FOURTH QUARTER, TDS WAS DEDUCTED IN THE MONTH OF JANUARY AND FEBRUARY, 2009 WHILE THE SAME WAS PAID ON 15 - 06 - 2009 ALONG WIT H TDS DEDUCTION FOR THE MONTH OF MARCH, 2009. IT WAS FURTHER SUBMITTED THAT THE SAID ISSUE HAS NOW BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HONBLE ITAT, MUMBAI BENCH, MUMBAI IN THE CASE OF PIYUSH C. MEHTA V/S. ACIT 20 TAXMAN.COM 472 IN ITA NO. 1321/ MUM/2009 DT. 11 - 04 - 2012. IT WAS FURTHER SUBMITTED THAT THE ITAT HAS REFERRED TO VARIOUS OTHER JUDGMENTS ON THIS ISSUE AND HAS COME TO THE CONCLUSION 3 ITA NO. 41/NAG/2014 THAT AMENDMENTS TO THE PROVISIONS OF SECTION 40(A)(IA) BY THE FINANCE ACT, 2010 ARE RETROSPECTIVE IN NATURE AND ARE EFFECTIVE FROM 01 - 04 - 2005. 4. CONSIDERING THE ABOVE, LEARNED CIT(APPEALS) ACCEPTED THE ASSESSEES CONTENTION AND HELD THAT NO DISALLOWANCE WAS CALLED FOR AS THE SAID AMENDMENT IS RETROSPECTIVE IN NATURE. AGAINST THE ABOVE ORDER, REVENUE IS IN APP EAL BEFORE US. 5. AT THE OUTSET , IN THIS CASE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE HAS ALREADY BEEN ANSWERED IN FAVOUR OF THE ASSESSEE BY SEVERAL HIGH COURTS. IN THIS REGARD, LEARNED COUNSEL SUBMITTED BEFORE US THE ORDER OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V/S. SANTOSH KUMAR SHETTY IN ITA NO. 590/2013 AND OTHERS DATED JULY 15, 2014 REPORTED IN 89 CCH 0199 KAR. HC. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE. 6. UPON CAREFUL CONSIDERATION WE AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT AMENDMENT TO PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT BY FINANCE ACT, 2010 WAS RETROSPECTIVE. FOR THIS PROPOSITION, WE MAY REFER TO THE FOLLOWING ADJUDICATION OF HONBLE KARNATAKA HIGH COURT IN THE CASE CITED ABOVE: THE QUESTION CAME UP FOR CONSIDERATION BEFORE THE GUJARAT HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, AHMEDABAD IV VS. OM PRAKASH R. CH A UDHARY IN TAX APPEAL NO. 412/2013 AND CONNECTED MATTER, WHICH CAME TO BE DECIDED ON 22.11.2013, AFTER REFERRING TO THE JUDGMENT ALIDE MOTORS (P) LTD. VS. CIT REPORTED IN AIR 1997 SC 1361 AND CIT VS. ALOM EXTRUSIONS LIMITED REPORTED IN (2009) 319 ITR 306, HAS HELD THE CORE ISSUE AS TO WHETHER THE AMENDMENT MADE BY THE FINANCE ACT, 2010 TO SECTION 40(A)(IA) OF THE ACT IS RETROSPECTIVE FROM THE DATE OF INSERTION OF THE PROVISION I.E. 1 ST APRIL, 2005 THEREFORE NEEDS TO BE ANSWERED IN AFFIRMATION. IT CAN BE SEEN THAT THE AMENDMENT MADE BY THE FINANCE ACT 2010 ALLOWS AD DITIONAL TIME UPTO THE DUE DATE OF FILING OF THE RETURN IN RESPECT OF EVEN THOSE INSTANCES WHERE TDS HAS BEEN DEDUCTED DURING THE FIRST ELEVEN MONTHS OF THE PREVIOUS YEAR. THE ADDITIONAL TIME TILL THE DUE DATE OF THE RETURN, IN CASE 4 ITA NO. 41/NAG/2014 OF TDS MADE DURING THE LAST MONTH OF THE PREVIOUS YEAR WAS ALREADY AVAILABLE BY THE AMENDMENT MADE BY FINANCE ACT 2008. THUS IT IS APPARENT THAT THE RELAXATION MADE BY THE AMENDMENT MADE UNDER THE FINANCE ACT, 2010 BRINGS THE LAW IN PARITY WITH THE AFOREMENTIONED SITUATION AND ACCORDINGLY, FOR THE TDS DEDUCTED ALL THROUGHOUT THE YEAR, TIME IS EXTENDED FROM PAYMENT TILL THE FILING OF RETURN. IT IS THUS APPARENT THAT WHEN THE AMENDMENT INTRODUCED BY THE FINANCE ACT, 2008 OF RELAXING THE TIME FOR DEPOSIT OF TDS WAS MADE RETROSPECTIVE FROM THE YEAR 2005 [1 ST APRIL 2005], THE AMENDMENT BY FINANCE ACT, 2010 WITH REGARD TO OTHER LIMB OF TIME LIMIT FOR PAYMENT OF TDS HAS TO BE HELD, RETROSPECTIVE NOT FROM 1 ST APRI L, 2010 ONLY. SIMILAR IS THE VIEW EXPRESSED BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATIONS. THIS COURT IS IN THE RESPECTFUL AGREEMENT WITH THE VIEW EXPRESSED BY THE GUJARAT HIGH COURT IN GIVING RETROSPECTIVE OPERATION TO THE SAID AME NDMENT NOTWITHSTANDING THAT THE PARLIAMENT HAS EXPRESSLY STATED THAT IT COMES INTO EFFECT FROM 01.04.2010. THE SAID AMENDMENT IS CURATIVE IN NATURE. THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. COMMISSIO NER OF INCOME TAX, AHMEDABAD IV VS. OM PRAKASH R. CHAUDHARY IN TAX APPEAL NOS. 412/2013, DECIDED ON 22.11.2013, CIT VS. ORACLE SOFTWARE INDIA LIMITED, 293 ITR PAGE 253, H.S. MOHINDRA TRADERS VS. I.T.O., CIT VS. VIRGIN CREATIONS. 7. RESPECTFULLY FOLLO WING THE ABOVE PRECEDENT, WE ARE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS) WHEREIN HE HAS HELD THAT WHEN THE TDS AMOUNT DEDUCTED HAS BEEN PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN UNDER SECTION 139(1), DISALLOW ANCE AS ENVISAGED UNDER SECTION 40(A)(IA) ARE NOT ATTRACTED . ACCORDINGLY WE UPHOLD THE ORDER OF LEARNED CIT(APPEALS). 8. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF AUGUST, 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 28 TH AUGUST, 2015. 5 ITA NO. 41/NAG/2014 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT RE GISTRAR, ITAT, NAGPUR