Ashish Associates, JAMNAGAR V. The Income Tax Officer, Ward-3(1), JAMNAGAR

ITA 529/RJT/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1267 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Retrospective amendment
• Section: 143(3); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER [CONDUCTED THR OUGH E - COURT AT AHMEDABAD] ASHISH ASSOCIATES, SHOP NO. 1, DAYASAGAR APARTMENT, LIMDA LANE, JAMNAGAR PAN: AAGFA4230L (APPELLANT) VS THE ITO, WARD - 3(1), JAMNAGAR (RESPONDENT) REVENUE BY : S H RI C.S. ANJARIA , SR. D . R. ASSESSEE BY: S H RI VIMAL DESAI , A.R. DATE OF HEARING : 0 2 - 06 - 2 016 DATE OF PRONOUNCEMENT : 07 - 06 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2006 - 07 , AR ISES FROM ORDER OF THE CIT(A), JAMNAGAR DATED 21 - 10 - 2013 IN APPEAL NO. CIT(A) / JAM/150/12 - 13/583 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT . I T A NO . 529 / RJT /20 13 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 529 /RJT /20 13 A.Y. 2006 - 07 PAGE NO ASHISH ASSOCIATES VS. ITO 2 2. THE ASSESSEE S SOLITARY SUBSTANTIVE GROUND CHALLENGES SECTION 40(A)(IA) DISALLOWANCE OF RS. 7,95,0 00/ - MADE BY BOTH THE LOWER AUTHORITIES ON ACCOUNT OF ITS FAILURE IN DEDUCTING TDS ON DUMPER HIRE/RENT CHARGES. THERE IS NO DISPUTE THAT THE ASSESSEE DID NOT DEDUCT TDS ON THE ABOVE STATED PAYMENTS MADE TO M/S HARI TRADERS. IT APPEARS THAT THIS IS SECOND ROUND OF LITIGATION BETWEEN THE PARTIES ON THIS ISSUE. THE ASSESSEE IS A PARTNERSHIP FIRM. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT IN ITS CASE ON 29 - 12 - 2008 MAKING THE IMPUGNED DISALLOWANCE. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) IN HIS ORDER DATED 04 - 08 - 2010 DELETING THE ABOVE STATED DISALLOWANCE. THE REVENUE FILED ITA 1243/RJT/2010 BEFORE THE TRIBUNAL. A LEARNED C O - ORDINATE BENCH IN ITS ORDER DATED 22 - 05 - 2012 RESTORED THE ISSUE BACK TO THE CIT(A) WHO HAS PASSED THE IMPUGNED CONSEQUENTIAL ORDER UPHOLDING THE IMPUGNED DISALLOWANCE. THIS LEAVES THE ASSESSEE AGGRIEVED. 3. LEARNED AUTHORIZED R EPRESENTATIVE TAKES US TO PAGE 04 OF THE PAPER BOOK CONTAINING ASSESSEE S FORM NO. 26A DATED 23 - 12 - 2013 THAT ITS PAYEE M/S HARI TRADERS QUALIFIES ALL CONDITIONS OF SECTION 201(1) OF THE ACT 1 ST PROVISO AND IT IS NOT AN ASSESSEE IN DEFAULT SINCE ITS PAYEE HAS FURNISHED ITS RETURNED OF INCOME ON 30 - 12 - 2006. IT IS SUBMITTED THAT SECTION 40(A)(IA) 2 ND PROVISO INSERTED IN THE A CT BY THE FINANCE ACT, 2012 W.E.F 01 - 04 - 2013 TO THE EFFECT THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVIS ION OF CHAPTER XVII - B ON ANY SUCH SUM BUT IT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE 1 ST PROVISO TO I.T.A NO. 529 /RJT /20 13 A.Y. 2006 - 07 PAGE NO ASHISH ASSOCIATES VS. ITO 3 SECTION 201 , THEN, FOR THE PURPOSE OF SECTION 40(A)(IA), IT IS TO BE DEEMED THAT THE ASSESSEE HAS DEDUCTED TDS AND THE PAID THE TAX ON SUCH SUM ON TH E DA TE OF FURNISHING RETURN OF INCOME BY THE PAYEE CONCERNED AS REFERRED IN THE SAID PROVISO. CASE LAW OF RAJEEVKUMAR AGRAWAL VS. ACIT (2014) 149 ITD 363 (AGRA) HOLDING THE SAID PROVISO TO BE RETROSPECTIVE EFFECT FROM 01 - 04 - 2005 BEING DECLARATORY AN D CURATIVE IN NATURE AS AGAINST 01 - 04 - 2013 IS ALSO QUOTED IN SUPPORT. REVENUE FAILS TO POINT OUT ANY DISTINCTION ON THE RELEVANT FACTS OR LAW VIS - - VIS THOSE INVOLVED HEREIN. WE ACCORDINGLY ACCEPT ASSESSEE S LEGAL ARGUMENT BASED ON TO 2 ND PROVISO TO SECTI ON 40(A)(IA) OF THE ACT AND REMIT THE ISSUE BACK TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION OF THE ASSESSEE S FORM 26A HEREINABOVE IN ACCORDANCE WITH LAW. 4. THIS ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSE ORDER PR ONOUNC ED IN THE OPEN C OUR T ON 07 - 06 - 201 6 SD/ - SD/ - (MANISH BORAD ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 07 /06 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD I.T.A NO. 529 /RJT /20 13 A.Y. 2006 - 07 PAGE NO ASHISH ASSOCIATES VS. ITO 4 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT