POPATLAL KANTILAL JAIN, MUMBAI V. ITO 17(3)(3), MUMBAI

ITA 492/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3544 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2015
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Keywords: Additional evidence; Non-deduction of tax
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO. 492/MUM/2015 (ASSESSMENT YEAR : 2009-10) SHRI POPATLAL KANTILAL JAIN, 1704-B, GIRNAR TOWER, G.G.AMBEDKAR MARG, KALA CHOWKY, MUMBAI 400 033 PAN: AACPJ 8233A ... APPELLANT VS. THE INCOME TAX OFFICER 17(3)(3), MUMBAI. .... RESPONDENT APPELLANT BY : SHRI SATISH MODY RESPONDENT BY : SHRI VISHWAS JADHAV DATE OF HEARING : 08/12/2015 DATE OF PRONOUNCEMENT : 29/02/2016 ORDER THE CAPTIONED APPEAL IS PREFERRED BY THE ASSESSEE AND IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 09/10/2014 OF CIT(A)-19, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2009-10, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 26/12/2011 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961( IN S HORT THE ACT). 2. AT THE OUTSET, IT WAS NOTED THAT THE FILING OF T HE APPEAL WAS DELAYED BY 35 DAYS. THE LD. REPRESENTATIVE FOR TH E ASSESSEE HAS REFERRED TO AN AFFIDAVIT AVERRED BY THE APPELLANT, WHICH BRINGS OUT THE REASONS FOR THE DELAY AND IT WAS CANVASSED THAT THE DELAY IS ON ACCOUNT 2 ITA NO. 492/MUM/2015 (ASSESSMENT YEAR : 2009-10) OF UNINTENDED AND BONA-FIDE GROUNDS. THE BONA-FIDE S OF THE REASONS AVERRED IN THE AFFIDAVIT HAVE NOT BEEN ASSAILED BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. AS PER THE AFFIDAV IT, IT IS CANVASSED THAT THE UNAVOIDABLE DELAY ON THE PART OF THE ASSES SEE WAS ON ACCOUNT OF CHANGE IN ADVICE OF THE CONSULTANT. CONSIDERIN G THE REASONS AND BONA-FIDES OF WHICH ARE NOT IN DISPUTE, THE DELAY IN FILING OF APPEAL IS CONDONED. 3. THE FIRST ISSUE WAS WITH REGARD TO A DISALLOWAN CE OF RS.4,55,602/- OUT OF INTEREST EXPENDITURE. THE APPELLANT IS AN I NDIVIDUAL ENGAGED IN THE BUSINESS OF JEWELLERY AND THE ASSESSING OFFICE R NOTED THAT IN RELATION TO INTEREST INCURRED OF RS.4,55,602/-, IN RELATION TO SIX PARTIES, THE REQUISITE TAX WAS NOT DEDUCTED AT SOURCE AND TH EREFORE, SUCH AMOUNT WAS DISALLOWED UNDER SECTION 40(A)(IA) OF TH E ACT. THE CIT(APPEALS) HAS ALSO AFFIRMED THE STAND OF THE ASS ESSING OFFICER. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(APPEALS) THE ASSESSEE HAD PLEADED THAT NO DEDUCTION OF TAX AT SO URCE WAS REQUIRED IN THE IMPUGNED SIX CASES AS THE RECIPIENTS HAD DULY S UBMITTED FORM NO.15G REQUESTING FOR NON-DEDUCTION OF TAX AT SOUR CE. THE CLAIM OF THE ASSESSEE HAS BEEN DENIED BY THE ASSESSING OFFICER O N THE GROUND THAT THE REQUISITE COPIES OF FORM NO.15G WERE NOT FURNIS HED. IT TRANSPIRES FROM THE ORDER OF THE CIT(APPEALS) THAT SUCH COPIES WERE FURNISHED AS ADDITIONAL EVIDENCE IN THE APPELLATE PROCEEDINGS AN D THE REMAND REPORT WAS SOUGHT FROM THE ASSESSING OFFICER. THE COMMIS SIONER HAS OBSERVED THAT ASSESSEE WAS REQUIRED TO FURNISH SUCH FORMS TO THE 3 ITA NO. 492/MUM/2015 (ASSESSMENT YEAR : 2009-10) CONCERNED COMMISSIONER OF INCOME TAX IN TERMS OF S ECTION 197A OF THE ACT AND IN THE ABSENCE OF SUCH COMPLIANCE, THE DISA LLOWANCE OF INTEREST WAS JUSTIFIED. 5. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS RELIED UPON THE SECOND PROVISO TO SECTION 40(A)(IA) WHICH WAS I NSERTED BY THE FINANCE ACT, 2012 W.E.F. 01/04/2013. AS PER THE SA ID PROVISO, A LEGAL FICTION IS INTRODUCED IN A SITUATION WHERE AN ASSES SEE FAILS TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVIIB OF THE ACT. IT IS PRESCRIBED THAT WHERE SUCH ASSESSEE IS NOT DEEMED T O BE AN ASSESSEE IN DEFAULT IN TERMS OF THE FIRST PROVISO TO SECTION 20 1(1) OF THE ACT, THEN IN SUCH A SITUATION, IT SHALL BE DEEMED THAT ASSESSE E HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING THE RETURN OF INCOME BY THE RECIPIENT PAYEE REFERRED TO IN THE SAID PROV ISO. LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SU CH AN AMENDMENT HAS BEEN HELD TO BE DECLARATORY AND RETROSPECTIVE IN OPERATION AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ANS AL LAND MARK TOWNSHIP (P) LTD. VS. CIT, ITA 160/2015 DATED 26/08 /2015 AND, THEREFORE, IT WOULD APPLY TO THE INSTANT ASSESSMENT YEAR ALSO. LD. REPRESENTATIVE FOR THE ASSESSEE CONSIDERED THAT THE SAID POSITION WAS NOT CANVASSED BEFORE THE LOWER AUTHORITIES AND BEIN G A POINT OF LAW, THE MATTER CAN BE SET-ASIDE TO THE FILE OF ASSESSIN G OFFICER FOR APPROPRIATE VERIFICATION. 6. LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS NOT DISPUTED THE FACTUAL MATRIX BROUGHT OUT BY THE LD. REPRESENTATIVE FOR THE ASSESSEE. 4 ITA NO. 492/MUM/2015 (ASSESSMENT YEAR : 2009-10) 8. HAVING CONSIDERED THE RIVAL STANDS, I DEEM IT FI T AND PROPER TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OF FICER TO EXAMINE THE SAME IN THE LIGHT OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT INSERTED BY THE FINANCE ACT, 2012, WHICH HAS BEEN H ELD TO BE DECLARATORY AND RETROSPECTIVE IN OPERATION BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) L TD. (SUPRA). NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING TO SUPPORT HIS C LAIM AND ONLY THEREAFTER PASS AN ORDER AFRESH ON THIS ASPECT AS P ER LAW. THUS, ON THIS ASPECT OF THE MATTER ASSESSEE SUCCEEDS FOR STATISTI CAL PURPOSES. 9. THE ONLY OTHER ISSUE IS WITH REGARD TO DISALLOWA NCE OF LABOUR EXPENSES OF RS.2,000/-, SUNDRY EXPENSES OF RS.2,500 /- AND MOTOR CAR EXPENSES & DEPRECATION OF RS.14,000/-. IT IS SEEN FROM THE ORDER OF AUTHORITIES BELOW THAT THE AFORESAID ADHOC DISALLOW ANCES HAVE BEEN MADE ON THE GROUND THAT THE EXPENDITURE IS NOT FULL Y VERIFIABLE AS THEY ARE SUPPORTED BY SELF-MADE VOUCHERS. THE ELEMENT O F DISALLOWANCE MADE OUT OF THE TOTAL EXPENSES, IN MY VIEW IS FAIR AND REASONABLE AND NO INTERFERENCE IS CALLED FOR. THUS, ON THIS ASPEC T ASSESSEE FAILS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29/02/2016. SD/- (G.S. PANNU) ACCOUN TANT MEMBER MUMBAI, DATED 29/02/2016 5 ITA NO. 492/MUM/2015 (ASSESSMENT YEAR : 2009-10) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS