ACIT CIR 23(3), MUMBAI V. SANDEEP S. THAMANKAR, MUMBAI

ITA 4691/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70920 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 4691/MUM/2012 ASSESSMENT YEAR: 2007-08 ACIT CIR 23(3) R.NO. 402, 4 TH FLOOR, C-10 BLDG. PRATYAKSHKAR BHAVAN B.K.C. BANDRA (E) MUMBAI-51 VS. SHRI SANDEEP S. THAMANKAR, 606 GREEN ACRES, YOGI HILLS, B.R. ROAD, MULUND (W) MUMBAI-80 PAN:AADPT 1176 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. GOPAL & JITENDRA SINGH REVENUE BY : SHRI SHISHIR SRIVASTAVA DATE OF HEARING : 21.08.2013 DATE OF PRONOUNCEMENT : 04.09.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A) -33, MUMBAI DATED 24.05.2012 FOR THE ASSESSMENT YEAR 200 7-08. 2. THE GROUNDS RAISED BY THE REVENUE RELATE TO THE LD.CIT(A) DELETING THE DISALLOWANCE OF RS.26,80,325/- MADE BY THE AO U/S 40(A)(IA) OF T HE INCOME TAX ACT. 3. THE ONLY ISSUE TO BE DECIDED BY US IT WHETHER TH E AMENDMENT TO SECTION 40 (A)(IA) BY FINANCE ACT 2010 MADE W.E.F. 01.04.2010 IS PROSPECT IVE OR RETROSPECTIVE IN NATURE FOR THE PURPOSE OF DECIDING THE ALLOWABILITY OF THE EXPENDI TURE CLAIMED BY THE ASSESSEE. THE STAND OF THE REVENUE IS THAT THE SAID AMENDMENT IS PROSPECTI VE IN NATURE AND THE ASSESSEE IS NOT ENTITLED TO CLAIM THE BENEFIT AS HE HAS NOT COMPLIE D WITH THE REQUIREMENTS OF SECTION 40 (A) (IA). THE ISSUE INVOLVED IN THE PRESENT APPEAL HAS NOW BEEN DECIDED BY THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN CREATORS IN GA NO. 3200/2011 DATED 23.11.2011 AGAINST THE REVENUE BY HOLDING THAT THE SAID AMENDMENT IS R ETROSPECTIVE IN NATURE. HOWEVER, IT IS NOTEWORTHY THAT THE SPECIAL BENCH OF ITAT MUMBAI IN THE CASE OF BHARATI SHIPYARD LTD VS. DCIT IN ITA NO. 2404/MUM/2009 VIDE ORDER DATED 12.0 9.2011 HAS TAKEN A VIEW THAT THE AMENDMENT IS PROSPECTIVE IN NATURE AND WOULD APPLY ACCORDINGLY. IT IS ALSO PERTINENT TO MENTION THAT THE MUMBAI ITAT IN THE CASE OF PIYUSH C. MEHTA IN ITA NO. 1321/MUM/2009 ITA NO. 4691/MUM/2012 SHRI SANDEEP S. THAMANKAR, ASSESSMENT YEAR: 2007-08 2 FOR THE ASSESSMENT YEAR 2005-06 VIDE DECISION DATE D 11.04.2012, ON THE ISSUE OF THIS CONTRADICTORY VIEWS HAS HELD AS FOLLOWS: 18. THE QUESTION NOW IS AS TO WHETHER TO FOLLOW THE DECISION OF THE HONBLE SPECIAL BENCH WHICH HAS TAKEN THE VIEW THAT AMENDMENT BY TH E FINANCE ACT, 2010 TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT IS PROSP ECTIVE AND NOT RETROSPECTIVE FROM 01.04.2005 OR THE DECISION OF THE HONBLE CALCUTTA HIGH COURT TAKING A CONTRARY VIEW. ON THE ABOVE QUESTION , THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE ITAT DELHI IN THE CASE OF TEJ I NTERNATIONAL (P) LTD. V. DY CIT (2000) 69 TTJ (DEL) 650, WHEREIN IT WAS HELD THAT I N THE HIERARCHICAL JUDICIAL SYSTEM THAT WE HAVE IN INDIA, THE WISDOM OF THE COURT BELO W HAS TO YIELD TO THE HIGHER WISDOM OF THE COURT ABOVE, AND THEREFORE, ONCE AN A UTHORITY HIGHER THAN THIS TRIBUNAL HAS EXPRESSED ITS ESTEEMED VIEWS ON AN ISSUE, NORMA LLY, THE DECISION OF THE HIGHER JUDICIAL AUTHORITY IS TO BE FOLLOWED. THE BENCH HAS FURTHER HELD THAT THE FACT THAT THE JUDGMENT OF THE HIGHER JUDICIAL FORUM IS FROM A NON JURISDICTIONAL HIGH COURT DOES NOT REALLY ALTER THIS POSITION, AS LAID DOWN BY THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GODAVARIDEVI SARAF 113 ITR 589 (BOM). 19. IN VIEW OF THE ABOVE, WE HOLD FOLLOWING THE DEC ISION OF THE HONBLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SEC. 40(A )(IA) OF THE ACT, BY THE FINANCE ACT, 2010 IS RETROSPECTIVE FROM 01.04.2005. CONSEQU ENTLY ANY PAYMENT OF TAX DEDUCTED AT SOURCE DURING PREVIOUS YEARS RELEVANT T O AND FROM ASSESSMENT YEAR 2005-06 CAN BE MADE TO THE GOVERNMENT ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT. IF PAYMENTS ARE MADE AS AFORESAID, THEN NO DEDUCTION U/S 40(A)(IA) OF THE ACT CAN BE MADE. ADMITTEDLY IN THE PRESENT CASE THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTED AT SOURCE ON OR BEFORE T HE DUE DATE FOR FILING RETURN OF INCOME U/S 139(1) OF THE ACT AND THEREFORE, THE IMP UGNED DISALLOWANCE DESERVES TO BE DELETED. WE ORDER ACCORDINGLY AN ALLOW THE APPEAL B Y THE ASSESSEE. 20. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. IN VIEW OF THE FACT THAT THE LD.CIT(A) HAS CORRECTL Y RELIED ON THE ABOVE SAID DECISION HOLDING THE VIEW THAT THE AMENDMENT IS RETROSPECTIVE IN NAT URE AND THEREBY DELETED THE DISALLOWANCE, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF SEPTEMBER, 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVA LAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 04.09.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR E BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBA I.