M/s. Swami Construction Co., V. The Income tax Officer, & TRO,Anand Range, Anand

ITA 456/AHD/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2046 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-04-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO. 456/AHD/2009 ASSESSMENT YEAR :2005-06 M/S. SWAMI CONSTRUCTION CO., NEAR PAYAL CINEMA, VALSAD V/S . ITO & TRO, ANAND RANGE, ANAND PAN NO. A ATFS7539P (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI S. N. DIVETIA, A.R. /BY RESPONDENT SHRI T. SANKAR, SR. D.R. /DATE OF HEARING 18.04.2013 /DATE OF PRONOUNCEMENT 10.05.2013 O R D E R PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT(A)-IV, BARODA, DATED 08.09.2008 FOR THE ASSESSMENT YEAR 20 05-06. 2. THE FACTS AS CULLED OUT FROM THE ORDERS ARE AS U NDER: 3. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E BUSINESS OF CONSTRUCTION OF ROADS FOR GOVERNMENT & SEMI-GOVERNM ENT DEPARTMENTS ON CONTRACT BASIS. THE ASSESSEE FILED ITS RETURN INCO ME FOR A.Y. 05-06 ON 13.12.2005 DECLARING TOTAL INCOME OF RS.7,03,690/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRA MED U/S.143(3), ORDER DATED 26.12.2007 AND THE TOTAL INCOME WAS DETERMINE D AT RS.55,22,443/-. ITA NO. 456/AHD/2009 A.Y. 05-06 PAGE 2 4. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). THE CIT(A), VIDE ORDER DATED 08 .09.2008 GRANTED PARTIAL RELIEF TO THE ASSESSEE. 5. AGGRIEVED BY THE AFORESAID ORDER, THE ASSESSEE I S IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS: 1. H BLE CIT(A) OUGHT NOT HAVE CONFIRMED THE AMOU NTING TO RS.26383197/- U/S 40A(IA) BECAUSE YOUR APPELLANT HA S NOT COMMITTED ANY DEFAULT DELIBERATELY OR UNDER ANY MAL ADIES INTENTIONS. 2. H BLE CIT(A) OUGHT NOT HAVE DISALLOWED EXPENSES OF RS.3683197/- U/S 40A(IA) BECAUSE YOUR APPELLANT HAS DEPOSITED THE AMOUNT OF TDS PAYABLE SUO MOTTO ALONG WITH INTEREST PAYABLE FOR DELAY IN ITS DEPOSIT BEYOND STATUTORY TIME LIMIT. 3. THE IMPUGNED SEC.40A(IA) HAS BEEN INTRODUCED ONL Y IN THE YEAR UNDER CONSIDERATION. BEING THE FIRST YEAR OF THE IMPLEMENTATION OF THE PROVISION OF SEC.40A(IA) IN THE ACT. H BLE CIT(A) OUGHT NOT HAVE DISALLOWANCE THE EXPENDITURE ON ACCOUNT OF MER ELY DELAY IN DEPOSITING TDS PAYABLE BY YOUR APPELLANT. 6. BEFORE US, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY AS THERE WAS DELAY OF ABOUT 67 DAYS IN FILING THE APPEAL. THE REASON FOR THE DELAY AS SUBMITTED BY THE ASSESSEE IS THAT IT W AS UNDER BONAFIDE AND GENUINE BELIEF THAT IT WAS NOT REQUIRED TO FILE APP EAL BEFORE THE TRIBUNAL IN VIEW OF THE MATTER PENDING BEFORE HONBLE GUJARAT HIGH C OURT ON THIS ISSUE. LATER ON, THE ASSESSEE WAS ADVISED BY HIS TAX ADVOCATE TH AT THE PENDENCY OF MATTER BEFORE HONBLE GUJARAT HIGH COURT WOULD NOT OPERATE IN RESPECT OF THE ASSESSEE AND IT HAS TO FILE ITS OWN APPEAL. ACCORD INGLY, THE PRESENT APPEAL WAS FILED BY THE ASSESSEE. IN VIEW OF THE AFORESAI D FACTS, IT WAS SUBMITTED THAT ITA NO. 456/AHD/2009 A.Y. 05-06 PAGE 3 THE DELAY IF FILING OF APPEAL BE CONDONED. LD. SR. D.R. OBJECTED TO THE APPLICATION FOR CONDONATION OF DELAY. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE SUBMIS SION MADE BY THE ASSESSEE THAT THE DELAY WAS CAUSED DUE TO BONAFIDE AND GENUINE BELIEF ENTERTAINED BY HIM AND THE DELAY WAS NEITHER INTENT IONAL NOR WILLFUL. THIS SUBMISSION OF ASSESSEE APPEARS TO BE BONAFIDE AND C ONSIDERING THE SUBMISSION MADE BY THE ASSESSEE, WE CONDONE THE DEL AY AND ADMIT THE APPEAL OF THE ASSESSEE. 8. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED EXPENSES BUT HAS FAILED TO DED UCT TDS AND PAY THE SAME TO THE GOVERNMENT ACCOUNT WITHIN THE STIPULATE D TIME. THE LIST OF PARTIES IS LISTED ON PAGE NO.3 OF THE ASSESSMENT ORDER. TH E A.O. WAS OF THE VIEW THAT SINCE THE ASSESSEE HAD FAILED TO DEDUCT TDS AT SOUR CE AND DEPOSIT THE SAME TO THE GOVERNMENT ACCOUNT WITHIN PRESCRIBED TIME, P ROVISIONS OF SECTION 40A(IA) ARE APPLICABLE. HE, ACCORDINGLY, DISALLOWE D THE AGGREGATE EXPENSES OF RS.48,18,755/- U/S.40A(IA) AND ADDED IT BACK TO THE INCOME. 9. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). CIT(A), AFTER CONSIDERING THE S UBMISSIONS MADE BY THE ASSESSEE, GAVE PARTIAL RELIEF TO THE ASSESSEE WITH RESPECT TO THE EXPENSES WHICH WERE INCURRED IN THE MONTH OF MARCH AND THE T DS OF WHICH WAS DEPOSITED BEFORE SUBMISSION OF THE RETURN OF INCOME . HE, ACCORDINGLY, DELETED THE ADDITION TO THE EXTENT OF RS.11,35,558/- AND TH E BALANCE ADDITION OF RS.36,83,197/- WAS CONFIRMED. ITA NO. 456/AHD/2009 A.Y. 05-06 PAGE 4 10. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IN NOW IN APPEAL BEFORE US. 11. LD. A.R. SUBMITTED AND POINTED OUT TO THE TABLE OF PAGE 3 OF ASSESSMENT ORDER AND FROM IT, IT WAS SUBMITTED THAT THE ASSESS EE HAS PAID TDS TO THE ACCOUNT OF GOVERNMENT BELATEDLY BUT BEFORE THE FILI NG OF RETURN. HE, THEREFORE, SUBMITTED THAT IN VIEW OF THE DECISION OF HONBLE C ALCUTTA HIGH COURT IN CASE OF VIRGIN CREATORS (GA NO.3200/2011 DATED 23.11.2011), THE ADDITION MADE BY THE A.O., BE DELETED. LD. SR. D.R., ON THE OTHER H AND, RELIED UPON THE ORDER OF THE A.O. AND FURTHER SUBMITTED THAT IN CASE OF SHAN TILAL G. PRAJAPATI (BALANCE OF RS.67,602/-), WHICH IS LISTED AT SR. NO.11 OF TH E CHART ON PAGE 3, THE ASSESSEE HAS NEITHER DEDUCTED TDS NOR MADE THE PAYM ENT AND THEREFORE, THE DISALLOWANCE OF THE AFORESAID AMOUNT, BE SUSTAINED. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. FROM THE CHART LISTED OUT BY THE A.O., IT HAS SEEN THAT THE ASSESSEE HAD DEPOSITED TDS BELATEDLY IN ALL CASES EXCEPT IN THE CASE OF SHANTILAL PRAJAPATI (RS.67,602/-) AND THE TDS HAS ALSO BEEN D EPOSITED BEFORE FILING OF RETURN (RETURN OF INCOME FILED ON 13.12.2005). THE CO-ORDINATE BENCH IN THE CASE OF ALPHA PROJECTS SOCIETY LTD. IN ITA NO. 2869 /AHD/2011, ORDER DATED 23.03.2012, RELYING ON THE DECISION OF THE CALCUTTA HIGH COURT IN CASE OF VIRGIN CREATORS, HAS HELD AS UNDER: '7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD AND ORDERS PASSED BY THE AUTHOR ITIES BELOW. THE ISSUE INVOLVED IN THE PRESENT APPEAL HAS NOW BEEN D ECIDED BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATORS IN GA NO.3200/2011 DATED 23-11-2011 AGAINST THE REVENU E. HOWEVER, IT IS NOTEWORTHY THAT THE SPECIAL BENCH OF ITAT MUMBAI IN ITA NO. 456/AHD/2009 A.Y. 05-06 PAGE 5 THE CASE OF BHARATI SHIPYARD LTD. VS. DCIT IN ITA NO.2404/MUM/2009 IN ORDER DATED 12-9-2011 HAS TAKEN A VIEW THAT THE AMENDMENT IS PROSPECTIVE IN NATURE AND WOULD AP PLY ACCORDINGLY. RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF VIRGIN CREATORS (SUPRA) T HE ORDER OF LD. CIT (A) IS NOT SUSTAINABLE. HENCE, THIS GROUND OF ASSES SEE'S APPEAL IS ALLOWED. THE ASSESSING OFFICER IS DIRECTED TO DELET E THE DISALLOWANCE OF RS.3,69,568/- AS MADE U/S. 40(A)(IA) OF THE ACT. ' RESPECTFULLY, FOLLOWING THE DECISION OF THE CO-ORDI NATE BENCH, WE ARE OF THE VIEW THAT NO DISALLOWANCE IS CALLED FOR IN THE CASE S WHERE THE ASSESSEE HAS DEPOSITED TDS BEFORE FILING OF RETURN. IN THE CASE OF PAYMENT TO SHANTILAL PRAJAPATI (RS.67,602/-), THE ASSESSEE HAS NEITHER D EDUCTED TDS NOR PAID TO THE ACCOUNT OF THE GOVERNMENT, THE ADDITION TO THAT EXTENT MADE BY THE A.O. IS SUSTAINED. THUS, THIS GROUND IS PARTIALLY ALLOWED. 12. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 10.05.2013 SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;