Sarbjit Singh, Mandi V. ITO, Sundernagar

ITA 530/CHANDI/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5498 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: R R THAKUR
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 251; 263; 144; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , . '.., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 530/CHD/2018 / ASSESSMENT YEAR : 2005-06 SH. SARABJIT SINGH PROP M/S SACHDEVA BROTHERS AND J.S.CARGO DHANONTU, TEH. SUNDER NAGAR, DISTT. MANDI (H.P.) THE ITO, SUNDER NAGAR, MANDI (H.P). ./PAN NO: AJAPS2330Q / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. R.R.THAKUR, ADVOCATE ' ! / REVENUE BY : SMT. CHANDRAKANTA, SR. DR # $ % /DATE OF HEARING : 14.08. 2018 &'() % / DATE OF PRONOUNCEMENT : 05.11.2018 %' / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 27.2.2018 OF THE COMMISSIONER OF INCOME TAX (APPEALS), PALAMPUR (H.P.) [HEREINAFTER REFERRED TO AS CIT(A)] . 2. THE BRIEF FACTS RELATING TO THE ISSUE UNDER CONS IDERATION IN THIS APPEAL ARE THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS C OMPETED U/S 144 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON 27.12. 2007. LATER ON, THE COMMISSIONER OF INCOME TAX, SHIMLA PASSED AN ORDER U/S 263 OF THE ACT OBSERVING THAT THE ASSESSING OFFICER HAD FAILED TO TAKE NOTE OF THE FACT THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE IN RESPECT OF FREIGHT ITA NO.530/CHD/2018 SH. SARABJIT SINGH PROP. M/S SACHDEVA BROS AND J.S .CARGO MOVERS, MANDI 2 PAYMENTS MADE TO VARIOUS TRUCK OWNERS / TRANSPORTER S. HE, THEREAFTER DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSES SMENT AFTER CONSIDERING THE ASSESSEES SUBMISSIONS ON THIS ISSUE AND MAKE A CORRECT DISALLOWANCE U/S 40(A)(IA) OF THE ACT AND RECOMPUTE THE TOTAL IN COME ACCORDINGLY. THE ASSESSING OFFICER GIVE EFFECT TO THE ABOVE ORDER OF THE LD. CIT(A) PASSED U/S 263 OF THE ACT AND COMPLETED THE REVISED ASSES SMENT BY ADDING A SUM OF RS. 1,34,53,063/- ON ACCOUNT OF DISALLOWANCE MAD E U/S 40(A)(IA) OF THE INCOME TAX ACT. 3. THE ASSESSEE PREFERRED APPEAL AGAINST THE SAID O RDER AND THE MATTER ULTIMATELY REACHED TO THE TRIBUNAL. THE TRIBUNAL VI DE ITS ORDER DATED 26.7.2012 RESTORED THE ISSUE TO THE FILE OF THE AS SESSING OFFICER TO ALLOW THE RELIEF TO THE ASSESSEE IN THE LIGHT OF THE DECI SION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT [2012] 70 DTR (VISHAKHAPATAM)(SB)(TRIB.) 81, WHEREI N, IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WERE APPLICABLE ONLY ON THE AMOUNT OF EXPENDITURE WHICH WERE PAYABLE ON THE 31 ST MARCH OF EVERY YEAR AND THAT IT CANNOT BE INVOKED TO DISALLOW WHICH HAD BEEN ACTUALLY PAID DURING THE PREVIOUS YEAR WITHOUT DEDUCTION OF TDS. THE ASSESSING OFFICER GAVE EFFECT TO THE ORDER OF THE TRIBUNAL AND MADE T HE RE-COMPUTATION. HOWEVER, LATER ON THE ASSESSEE MOVED AN APPLICATION U/S 154 OF THE ACT PLEADING THAT COMPUTATION OF INCOME HAD BEEN WRONGL Y MADE BY THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. THE ASSESSING OFFICER THEREAFTER PASSED THE ORDER U/S 1 54/155 OF THE ACT DATED 20.8.2013 MAKING A FRESH COMPUTATION, HE, HOWEVER , DISALLOWED A SUM OF RS. 11,30,656/- U/S 40(A)(IA) OF THE ACT IN RESPEC T OF THE PAYMENTS WHICH ITA NO.530/CHD/2018 SH. SARABJIT SINGH PROP. M/S SACHDEVA BROS AND J.S .CARGO MOVERS, MANDI 3 REMAINED PAYABLE ON 31ST MARCH IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPP ING & TRANSPORT VS. ACIT (SUPRA). AGGRIEVED BY THE ABOVE ADDITION, TH E ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 4. THE LD. CIT(A) WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE GAVE A NOTICE OF ENHANCEMENT U/S 251 OF THE I.T. ACT AND T HEREBY ENHANCED THE TAXABLE INCOME OF THE ASSESSEE OBSERVING THAT THE D ECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPP ING & TRANSPORT VS. ACIT (SUPRA) WAS NO MORE A GOOD LAW AND THAT BY TH E TIME THE ISSUE HAS BEEN SETTLED BY THE DECISION OF THE HON'BLE SUPRE ME COURT IN THE CASE OF M/S PALAM GAS SERVICES VS. CIT IN CIVIL APPEAL NO . 5512/2017 DATED 3.5.2017 IN FAVOUR OF THE REVENUE. HE, THEREFORE, E NHANCED THE INCOME OF THE ASSESSEE. 5. NOW THE ASSESSEE HAS COME IN APPEAL BEFORE US ON TWO ISSUES, FIRSTLY AGITATING THE ENHANCEMENT OF INCOME AND, SECONDLY, AGITATING THE ADDITION MADE BY THE ASSESSING OFFICER IN THE ORDER PASSED U /S 154 OF THE ACT WHILE COMPUTING THE INCOME OF THE ASSESSEE AS PER THE SPE CIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRA NSPORT VS. ACIT (SUPRA); 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O GONE THROUGH THE RECORD. SO FAR AS THE ISSUE RELATING TO THE ADDITI ONS MADE BY THE ASSESSING OFFICER WHILE COMPUTING THE INCOME OF THE ASSESSEE AS ON AN APPLICATION MOVED BY THE ASSESSEE U/S 154 OF THE ACT IS CONCERN ED, WE FIND THAT THE ITA NO.530/CHD/2018 SH. SARABJIT SINGH PROP. M/S SACHDEVA BROS AND J.S .CARGO MOVERS, MANDI 4 ASSESSING OFFICER WAS SUPPOSED TO GIVE EFFECT TO TH E ORDER OF THE TRIBUNAL VIDE WHICH HE WAS DIRECTED TO COMPUTE THE DISALLOWANCE U/S S 4 0(A)(IA) OF THE ACT IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH OF T HE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT (SUPRA). TH E ASSESSING OFFICER WHILE PASSING THE ORDER U/S 154 OF THE ACT HAS MA DE THE IMPUGNED ADDITION IN RESPECT OF THE AMOUNTS PAYABLE ON THE L AST OF THE FILING OR IN THE LIGHT OF THE DECISION OF THE SPECIAL BENCH OF THE T RIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT (SUPRA) 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, HAS SUBMITTED THAT WHILE MAKING THE IMPUGNED ADDITIONS U/S 154 OF THE ACT, THE ASSESSING OFFICER HAS NOT GIVEN ANY OPPORTUNITY OF HEARING TO THE ASSESSEE. THAT THE LD. ASSESSING OFFICER MISTOOK THE FACT THAT THE PAY MENT OF RS. 11,30,656/- WAS OUTSTANDING ON THE LAST DATE OF THE MONTH OF TH E FINANCIAL YEAR UNDER CONSIDERATION. WE, THEREFORE, RESTORE THIS ISSUE BA CK TO THE FILE OF THE ASSESSING OFFICER TO RE-EXAMINE THIS FACTUAL ASPECT AND GIVE EFFECT TO THE ORDER OF THE TRIBUNAL DATED 26.7.2012 ACCORDINGLY. 8. SO FAR AS THE ISSUE RELATING TO THE ENHANCEMENT OF THE INCOME IS CONCERNED, IT HAS BEEN PLEADED BY THE ASSESSEE THAT THE REVENUE HAS ALREADY PREFERRED AN APPEAL BEFORE THE HON'BLE HIMA CHAL PRADESH HIGH COURT AGAINST THE DIRECTIONS OF THE TRIBUNAL TO THE ASSESSING OFFICER FOR FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ACIT (SUPRA). I T HAS, THEREFORE, BEEN ITA NO.530/CHD/2018 SH. SARABJIT SINGH PROP. M/S SACHDEVA BROS AND J.S .CARGO MOVERS, MANDI 5 CONTENDED THAT THE REVENUE HAS ALREADY APPROACHED T HE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT HAS BEEN SEIZED OF THE M ATTER, HENCE, THERE WAS NO JURISDICTION TO THE LD. CIT TO PASS THE IMPU GNED ORDER OF ENHANCEMENT. IT HAS FURTHER BEEN CONTENDED THAT EVE N THE APPEAL OF THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT U/S 26 3 OF THE ACT WAS ALSO PENDING BEFORE THE HON'BLE HIGH COURT. HOWEVER, NO DOCUMENTS OR EVIDENCE SHOWING THE ABOVE PENDENCY OF THE APPEAL O F THE REVENUE AS WELL AS OF THE ASSESSEE HAS BEEN PRODUCED BEFORE US. 9. WE AGREE WITH THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE ISSUE IN THE OWN CASE OF THE ASSESSEE FOR TH E ASSESSMENT YEAR UNDER CONSIDERATION IS ALREADY SUB-JUDICE BEFORE THE HON 'BLE HIMACHAL PRADESH HIGH COURT, THEN THERE WAS NO JURISDICTION TO THE LD. CIT TO PASS THE ORDER OF ENHANCEMENT ON THE SAME. MOREOVER, THE ASS ESSING OFFICER HAD JUST GIVEN EFFECT TO THE ORDER OF THE TRIBUNAL AND THE ISSUE HAS BEEN PRINCIPALLY DECIDED BY THE TRIBUNAL IN THE ORDER DA TED 26.7.2012. THE LD. CIT(A), THEREFORE, WAS NOT JUSTIFIED TO PASS A FRE SH ORDER ON THE SAME ISSUE. THE RECTIFICATION APPLICATION, IF ANY, ON TH IS ISSUE COULD HAVE BEEN MOVED BEFORE THE ITAT ONLY AND THE CIT(A) HAS NO J URISDICTION TO FURTHER ADJUDICATE ON THE ISSUE. THE ONLY REMEDY LEFT WITH THE DEPARTMENT IN THIS RESPECT WAS EITHER TO MOVE AN APPLICATION FOR RECTI FICATION U/S 254 OF THE ACT BEFORE THE TRIBUNAL, IF IT WAS OTHERWISE SO ADM ISSIBLE, OR TO FILE APPEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HON'BL E HIGH COURT. IT HAS BEEN CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE REVENUE HAS ALREADY APPROACHED THE HON'BLE HIGH COURT ON THIS I SSUE. ITA NO.530/CHD/2018 SH. SARABJIT SINGH PROP. M/S SACHDEVA BROS AND J.S .CARGO MOVERS, MANDI 6 IN VIEW OF THIS, THE ORDER OF ENHANCEMENT PASSED B Y THE LD. CIT(A) IS WITHOUT JURISDICTION AND THE SAID PART OF THE OR DER IS ACCORDINGLY SET ASIDE. IN VIEW OF THIS, THE APPEAL OF THE ASSESSEE IS TREA TED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.11.2018 SD/- SD/- DATED : 5.11.2018 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR ( ' . . , # $ / B.R.R. KUMAR) %& / ACCOUNTANT MEMBER ( / SANJAY GARG ) / JUDICIAL MEMBER