Tapan Kumar Dutta, Kolkata V. ITO, Ward 2(4), Asansol

ITA 472/KOL/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6875 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: TDS
• Section: 40(a)(ia); 194C

Judgement Text

ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT I.T.A. NO. 472/KOL/2020 ASSESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA,................................. ................................ APPELLANT C/O. SUBASH AGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700069 [PAN:ADSPD7665F] -VS.- INCOME TAX OFFICER,................................ ................................... RESPONDENT WARD-2(4), ASANSOL APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, APPEARED ON BEHALF O F THE ASSESSEE SHRI JAYANTA KHANRA, D.R., APPEARED ON BEHALF OF TH E REVENUE DATE OF CONCLUDING THE HEARING : DECEMBER 17, 2020 DATE OF PRONOUNCING THE ORDER : JANUARY 28, 2021 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL DATED 05.03.2020 . 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 81 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TR IBUNAL. IN THIS REGARD, THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDO NATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN , I AM SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY OF 81 DA YS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. EVEN THE LD. D.R. HAS NOT RAISED ANY OBJECTION IN THIS REGARD. THE DELAY OF 8 1 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBU NAL IS, THEREFORE, CONDONED AND THIS APPEAL OF THE ASSESSEE IS BEING D ISPOSED OF ON MERIT. ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 2 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL:- (1)(A) FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED I N CONFIRMI.NG THE ADDITION OF RS.37,306/- MADE BY THE A.O. ON THE GROUND THAT THE CONTRACTUAL RECEIPTS DI D NOT TALLY WITH THOSE SHOWN IN THE PROFIT & LOSS ACCOUNT. (B) FOR THAT THE LD. CIT(A) OUGHT TO HAVE CONFIRMED ONLY A REASONABLE PROFIT OUT OF THE DIFFERENTIAL AMOUNT AND NOT THE ENTIRE AMOUNT. (2) FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.24,63,716/- MADE BY THE A.O. U/S 40(A)(IA) ON ACCOUNT OF TRANSPORT HIRE CHARGES PAID TO SHARMA TRANSPORT AGENCY AND KAUSHIK SENGUPTA FOR ALLEGED VIOLATION OF THE PROVISION OF SECTION 194C. 4. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED GROUND NO. 1. THE SAME IS ACCORDINGLY DISMISSED AS NOT PRESSED. 5. AS REGARDS THE ISSUE RAISED IN GROUND NO. 2 RELA TING TO THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA), THE RELE VANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL, WHO IS ENGAGED IN THE BU SINESS OF TRANSPORTATION. THE RETURN OF INCOME FOR THE YEAR U NDER CONSIDERATION WAS FILED BY HIM ON 30.09.2011 DECLARING TOTAL INCO ME OF RS.4,83,540/-. AS NOTICED BY THE ASSESSING OFFICER DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD MADE PAYMENT TOWARDS TRUCK HIRE CHARGES TO TWO PARTIES, NAMELY SHARMA TRANSPORT AGENCY AND KAUSHIK SENGUPTA AGGREGATING TO RS.24,63,716/- WITHOUT DEDUCTING TAX AT SOURCE. IN THIS REGARD, IT WAS SUBMITTED ON BEHALF OF THE ASSESESE THAT THE PERMANENT ACCOUNT NUMBERS OF THE SAID TWO PARTIES WERE OBTAIN ED BY HIM AND, THEREFORE, THE TAX AT SOURCE WAS NOT LIABLE TO BE D EDUCTED FROM THE PAYMENT OF TRUCK HIRE CHARGES MADE TO THEM. THE ASS ESSING OFFICER, HOWEVER, FOUND THAT THE SAID DETAILS REGARDING THE PANS OF THE CONCERNED ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 3 PARTIES WERE NOT FURNISHED BY THE ASSESSEE IN THE P RESCRIBED FORM TO THE SPECIFIED INCOME TAX AUTHORITIES WITHIN THE PRESCRI BED TIME. HE, THEREFORE, INVOKED SECTION 40(A)(IA) AND DISALLOWED THE TRUCK HIRE CHARGES TO THE EXTENT OF RS.24,63,716/-. 6. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER O N ACCOUNT OF TRUCK HIRE CHARGES UNDER SECTION 40(A)(IA) WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND TH E FOLLOWING SUBMISSION WAS MADE ON BEHALF OF THE ASSESSEE BEFORE THE LD. C IT(APPEALS) IN SUPPORT OF THE ASSESSEES CASE ON THIS ISSUE:- ADDITION RS. 24,63,716/-: THE A.O. NOTICED THAT A SUM OF RS.21,92,916/- WAS PAID TO SHARMA TRANSPORT AGEN CY AND A SUM OF RS.2,70,800/- WAS PAID TO KOWSIK SENGUPTA ON ACCOUNT OF TRUCK HIRE CHARGES. AS THESE PERSONS FURNISHED THEIR PERMANENT ACCOUNT NUMBER, T HE ASSESSEE DID NOT DEDUCT TAX AT SOURCE. THE ATTENTION OF CIT(A) IS INVITED TO THE PROVISION S CONTAINED U/S 194C(6) AND 194C(7) WHEREIN THERE IS CLEAR MENTIONING OF THE FACT THAT NO TAX WILL BE DEDUCTED AT SOURCE WHERE PERMANENT ACCOUNT NUMBER HAS BEEN FURNISHED. IN FACT CONCESSION HAS BEEN PROVIDED TO GOODS AND TRANSPORT OPERATORS WITH EFFE CT FROM 01-10-2009 WITH A SPECIFIC INSTRUCTION NOT TO DEDUCT TAX AT SOURCE WHEN PERMANENT ACCOUNT NUMBER IS FURNISHED. HOWEVER RULES MENTIONED IN SEC 194C(7) HAS NOT YET HAS BEEN FRAMED, THE ASSESSE IS NOT LIABLE TO FURNISH RELEVANT INFORMATION TO PARTICULAR AUTHORITY. I THEREFORE, REQUEST YOU TO KINDLY DELETE THE ENTIR E ADDITION MADE BY THE A.O. 7. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSION MADE ON BEHALF OF THE ASSESSEE AND CONFIRMED THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) FOR THE F OLLOWING REASON GIVEN IN HIS IMPUGNED ORDER:- ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 4 THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT HAVE BEEN CAREFULLY PERUSED. THE APPELLAN T HAS STATED THAT THERE WAS AMENDMENT WITH EFFECT FRO M 01-10-2009 BUT NO NEW RULES WERE PRESCRIBED ABOUT THE MANNER IN WHICH THE INFORMATION HAS TO BE FURNISHED. HOWEVER, THE CONTENTION OF THE APPELLANT IS NOT CORRECT AS WITH EFFECT FROM 01-10-2009, THE ACT DOES NOT ENVISAGE THAT THE INFORMATION HAS TO BE GI VEN IN A NEW FORMAT. IT ONLY PRESCRIBED THAT CERTAIN RESTRICTIONS HAVE BEEN REMOVED WITH EFFECT FROM 01- 10-2009 AND FROM THAT DATE, PERSONS WITH THE TRANSPORT BUSINESS CAN AVAIL CERTAIN BENEFIT. IT IS NOT MENTIONED ANYWHERE THAT INFORMATION HAVE TO BE SUBMITTED IN A NEW FORM. 8. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLV ED IN GROUND NO. 2 ON THE ASSESSEES APPEAL RELATING TO THE DISALLOWANCE UNDER SECTION 40(A)(IA) IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE, INTE R ALIA, BY THE DECISION OF DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF KALI KINKAR ROY VS.- ITO RENDERED VIDE ITS ORDER DATED 31.01.2017 IN ITA NO. 1676/KOL/2016, WHEREIN A SIMILAR DISALLOWANCE MADE UNDER SECTION 4 0(A)(IA) WAS DELETED BY THE TRIBUNAL FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 8 & 9 OF ITS ORDER:- 8. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT SI NCE ALL THE PAYEES SUBMITTED THEIR PERMANENT ACCOUNT NUMBER S IN THE ASSESSMENT PROCEEDINGS. THE PROVISION CONTEMPLATED IN SEC 194C(6) PERMITS NO DEDUCTION OF TDS SHALL BE MADE U/S. 194C( 1) IF THE PAYEE FURNISHES PAN TO THE PAYER. WE FIND THAT THE REQUIREMENT OF SECTION 194C(6) OF THE ACT SUBMISSION OF PERMANENT ACCOUNT NUMBER WHICH ENABLE THE PAYER FROM NO DEDUCTION OF TDS. THE FINDING OF THE AO WAS THAT THE PERMANENT ACCOUN T NUMBERS FURNISHED CANNOT BE ACCEPTED AS IT WAS NOT FILED WITH THE APPROPRIATE AUTHORITY AS REQUIRED U/S. 194 C(7) OF THE ACT AND WHETHER SUCH FAILURE ATTRACTS AND IN VOKES THE JURISDICTION UNDER SECTION 40(A)(IA) OF THE ACT . AT THIS JUNCTURE, WE MAY REFER THE ORDER OF COORDINATE BENC H OF THIS TRIBUNAL WHICH HELD THAT PROVISIONS OF SECTION 194C(6) AND SECTION 194C(7) ARE INDEPENDENT TO EACH ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 5 OTHER AND CAN JOIN TOGETHER NOT BE READ TOGETHER TO ATTRACT THE DISALLOWANCE U/SECTION 40(A)(IA) OF THE ACT. THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREUND ER: V) SECTIONS 194C(6) AND SECTION 194C(7) ARE INDEPENDENT OF EACH OTHER, AND CANNOT BE READ TOGETHER TO ATTRACT DISALLOWANCE U/S. 40(A)(IA) READ WITH SECTION 194C OF THE ACT; AND VI) IF THE ASSESSEE COMPLIES WITH THE PROVISIONS OF SECTION 194C(6), NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT IS PERMISSIBLE, EVEN THERE IS VIOLATION OF THE PROVISIONS OF SECTION 194C(7) OF THE ACT. 9. IN THE PRESENT ISSUE AS DISCUSSED THE FACT REMA INS ADMITTED THE PAYEES FURNISHED PANS TO THE ASSESSEE, BUT, THE ASSESSEE COULD NOT FURNISH THE SAME TO THE PRES CRIBED AUTHORITY WITHIN TIME AND WHETHER SUCH FAILURE ATTR ACTS THE ADDITION AND DISALLOWANCE UNDER SECTION 40(A)(I A)OF THE ACT, IN OUR OPINION THERE IS VIOLATION OF SECTI ON 194C(7) AND DISALLOWANCE UNDER SECTION 40(A)(IA) DO ES NOT ARISE AS HELD BY THE COORDINATE BENCH SUPRA, ACCORDINGLY, THE IMPUGNED ADDITION MADE THEREON SHA LL GO AND THUS, GROUND NO'S 2 AND 3 RAISED BY THE ASSESSE E ARE ALLOWED. 9. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WEL L AS THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF K ALI KINKAR ROY (SUPRA), I RESPECTFULLY FOLLOW THE DECISION RENDERED BY THE DI VISION BENCH OF THIS TRIBUNAL IN THE SAID CASE AND DELETE THE DISALLOWAN CE MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) AND CONFI RMED BY THE LD. CIT(APPEALS). GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 28, 2 021. SD/- (P.M. JAGTAP) VICE-PRESIDENT KOLKATA, THE 28 TH DAY OF JANUARY, 2021 ITA NO. 472/KOL/2020 ASS ESSMENT YEAR: 2011-2012 TAPAN KUMAR DUTTA 6 COPIES TO : (1) SHRI TAPAN KUMAR DUTTA, C/O. SUBASH AGARWAL & ASSOCIATES, ADVOCATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE 213, 2 ND FLOOR, KOLKATA-700069 (2) INCOME TAX OFFICER, WARD-2(4), ASANSOL (3) COMMISSIONER OF INCOME TAX (APPEALS). ASANSOL; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.