Hingula Coal Transport & Multipurpose Co-operative Ltd., Angul V. ITO, Angul Ward, Angul

ITA 444/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5629 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 13-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Keywords: Principle of natural justice
• Section: 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO . 444 /CTK/201 7 ( / ASSESSMENT YEAR : 20 1 4 - 20 1 5 ) M/S HINGULA COAL TRANSPORT & MULTIP URPOSE CO - OPERATIVE LTD., SOUTH BALANDA COLLIERY, TALCHER ANGUL - 759166 VS. ITO, ANGUL WARD, ANGUL ./ ./ PAN/GIR NO. : A A ALH 0351 D ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI NATABA R PANDA , AR /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 17 / 0 5 /201 8 / DATE OF PRONOUNCEMENT 17 / 05 /201 8 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED THIS AP PEAL AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR , DATED 31.07.2017 , PASSED IN I.T.APPEAL NO. 0169 / 2016 - 17 , U/S. 143(3)/250 OF THE I.T.ACT FOR THE ASSESSMENT YEAR 20 1 4 - 20 1 5 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 01. FOR THAT THE ORDERS OF THE FORUMS BELOW ARE ILLEGAL, ARBITRARY UNJUST AND EXCESSIVE IN THE FACTS OF THE CASE. 02. FOR THAT THE FORUMS BELOW HAVE NOT EXTENDED REASONABLE OPPORTUNITY OF HEARING TO THE APPELLANT HENCE THE ORDERS PASSED ARE DEVOID OF NATURAL JUSTICE AND LIABLE TO BE QUASHED IN APPEAL. 03. FOR THAT THE DISALLOWANCE OF RS.3,48,530/ - U/S.40(A)(IA) OF THE ACT DUE TO NON - DEDUCTION OF TDS FROM TRANSPORTATION EXPENSES AND THE SAID ADDITION IS LIABLE TO BE DELETED IN TOTO AS THE LAO PASSED THE ORDER WITHOUT APPLICATIO N OF JUDICIAL MIND. NEITHER THE LAO NOR THE LEARNED CIT(A) TRIED TO HOLD THAT THE ABOVE AMOUNT WAS PAID/PAYABLE AS ON 31/03/2014, HENCE THE SAME IS NOT LIABLE TO BE ADDED TO THE TOTAL INCOME OF THE APPELLANT. IN ABSENCE OF THE ABOVE FINDING THE ORDERS PASS ED BY THE FORUMS BELOW ARE LIABLE TO BE QUASHED. ITA NO. 444 /201 7 2 04. FOR THAT RS.35,581/ - BEING THE REIMBURSEMENT OF EXPENSES ON ACCOUNT OF OIL & FUEL GIVEN TO THE EMPLOYEES, THE SAME SHOULD BE ALLOWED IN FULL AND THE ADDITION IS LIABLE TO BE DELETED IN APPEAL. 05. FOR THAT THE APPELLANT CRAVES THE LEAVE TO ALTER, AMEND AND FILE FRESH GROUNDS AT THE TIME OF HEARING OF APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM COAL TRANSPORTATION AND FILED THE RETURN OF INCOME ELECTRONICALLY ON 24.10.20 14 FOR ASSESSMENT YEAR 2014 - 2015 DECLARING TOTAL INCOME OF RS. 2,89,100/ - . SUBSEQUENTLY, THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE THE LD. AR OF THE ASSESSEE APPEARED AND SUBMITTED THE RELEVANT DETAILS. THE AO CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND MATERIAL PLACED ON RECORD COMPLETED THE ASSESSMENT MAKING DISALLOWANCE OF TRANSPORT EXPENSES U/S.40( A)(IA) OF THE ACT AND DISALLOWANCE OF FUEL CHARGES AND ASSESSED THE TOTAL INCOME OF RS. 6,73,210/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 15.11.2016 . 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE AO AND DISMISSED THE APPEAL OF THE ASSE SSEE. 5. AGAINST THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, LD. AR SUBMITTED THAT THE ASSESSEE HAS MADE PAYMENTS TO TRANSPORTERS AND THESE PAYMENTS WERE DISCLOSED BY THE RECIPIENT IN THEIR INCOME TAX RETURNS A ND THERE IS NO LOSS OF REVENUE TO THE DEPARTMENT AND ALSO SUBMITTED THAT THE INCOME TAX RETURN COPY OF THE RECIPIENT AND DETAILS OF INCOME CAN BE SUBSTANTIATED AND THEREFORE, PRAYED FOR DELETING ITA NO. 444 /201 7 3 THE ADDITION. SIMILARLY, THE AR ARGUED THAT THE AO HAS DISALL OWED THE FUEL CHARGES IN RESPECT OF DISTRIBUTION OF PETROL TO ITS EMPLOYEES. THE CONTENTION OF LD. AR IS THAT THESE EXPENSES ARE PAID TO THE EMPLOYEES FOR PETROL AND SINCE THE ASSESSEE COULD NOT MAINTAIN THE LOG BOOK FOR STAFF VEHICLES THEREFORE THE AO HAS DISALLOWED. THE CONTENTION OF LD.AR THAT THESE PAYMENTS ARE FOR THE WELFARE OF THE STAFF AND PRAYED FOR DELETING THE ADDITION. 7. CONTRA, LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILA BLE ON RECORD. ON THE FIRST DISPUTED ISSUE OF DISALLOWANCE MADE BY THE AO FOR NON - DEDUCTION OF TDS, LD. AO HAS MADE THE DISALLOWANCE FOR NON - DEDUCTION TDS U/S.40(A)(IA) OF THE ACT AS THE PAYMENTS HAS BEEN MADE TO THE TRANSPORTERS AND THE CONTENTION OF LD. AR THAT THESE PAYMENTS ARE MADE AS PER THE CONTRACT WITH THE VEHICLES OWNER AND THEREFORE, CHARGES ARE PAID DIRECTLY , THE CONTENTION OF THE AR THAT RECIPIENT HAS DISCLOSED THE INCOME AND REFERRED TO THE COMPUTATION SHEET WHERE THIS INCOME HAS BEEN REFLE CTED. WE ARE OF THE OPINION THAT THE RECIPIENT OF THE TRANSPORT CHARGES H AS DISCLOSED THIS IN INCOME TAX RETURN . WE FOUND THE ARGUMENTS OF LD. LD. AR ARE DULY SUPPORTED BY THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND AS PER THE SECOND PROVISO TO SE CTION 40 SUB - CLAUSE (IA) OF CLAUSE (A) , WHICH WAS INSERTED BY THE FINANCE ACT, 20 12 WITH EFFECT FROM 1ST APRIL, 20 13 WHICH READS AS UNDER: 40(A)(IA). NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL NOT BE DEDUC TED IN COMPUTED THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' ITA NO. 444 /201 7 4 ** ** ** (IA) THIRTY PER CENT OF ANY SUM PAYABLE TO A RESIDENT, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII - B AND SUCH TAX HAS NOT BEEN DEDU CTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB - SECTION (1) OF SECTION 139. PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILED TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISION OF CHAPTER - XVII - B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201, THEN FOR THE PURPOSE OF THIS SUB - CLAUSE IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON WHICH SUM OF THE DATE O F FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. 9. WE FOUND THE ABOVE PROVISION IS EFFECTIVE RETROSPECTIVELY AS PER THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. [2015] 61 TAXMANN.COM 45 (DELHI) HELD THAT THE PROVISO ADDED U/S.40(A)(IA) OF THE INCOME TAX ACT,1961 WAS RETROSPECTIVE IN OPERATION AND THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE SAME. ACCORDINGLY, CONSIDERING THE FACTS, PROVISIONS OF THE ACT AND JUDI CIAL DECISION, WE REMIT THIS ISSUE TO THE FILE OF AO AND THE ASSESSEE SHALL FILE REQUIRED DETAILS AND INFORMATION IN RESPECT OF OFFERING OF INCOME BY THE RECIPIENT AND THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN RESPE CT OF SECOND GROUND, LD. AR COULD NOT SUBSTANTIATE ITS CLAIM EVEN BEFORE US, THEREFORE, WE HAVE NO OPTION BUT TO ACCEPT THE FINDINGS OF CIT(A) IN THIS REGARD AND ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THIS GROUND OF APPEAL OF ASSESSEE. ITA NO. 444 /201 7 5 11 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOU NCED IN THE OPEN COURT ON 17 / 05 / 201 8 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL M EMBER CUTTACK ; DATED 17 / 05 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT( A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//