Maninder Pal Singh Gill, BHILAI(CG) V. Income Tax Officer,Ward-3, BHILAI(CG)

ITA 56/BIL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85393 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 18-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHEETAL VERMA
• Assessee Lawyers: M C JAIN

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , ! ! ! !, ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO.56/BLPR/2011- # # # # / // / ASSESSMENT YEAR -2005-06 MANINDER PAL SINGH GILL, PROP. GILL BULK CARRIERS, SANTRA BADI, DURG. PAN:ADAPG 0450B V/S. INCOME-TAX OFFICER, WARD-3, BHILAI ( ) / // / APPELLANT ) ( *+) / RESPONDENT ) ASSESSEE BY : SH. M.C. JAIN, ADVOCATE REVENUE BY : SMT. SHEETAL VERMA, SR. DR - /DATE OF HEARING : 17-12-2014 - /DATE OF PRONOUNCEMENT : 22 -12-2014 # # # # , 1961 1961 1961 1961- - - - 254 254254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM < << < = = = =, ,, , ! ! ! ! : CHALLENGING THE ORDER DT.07.07.2008 OF THE CIT(A)-, RAIPUR,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED I.T.O. HAS ERRED IN DISALLOWING TR ANSPORT EXPENSES OF RS.63,21,553/- U/S. 40(A)(IA) O F THE I.T. ACT, 1961, WHICH IS WRONG, ARBITRARY, UNJUSTIF IED AND BAD IN LAW AS UNDER SECTION 40(A)(IA) DISALLOWANCE CAN BE MADE ONLY IN RESPECT OF THE AMO UNTS PAYABLE AND NOT IN RESPECT OF THE AMOUNTS ALREADY PAID. 2. THAT THE LEARNED A.O. HAS ERRED IN TREATING THE TRA NSPORTERS AS SUB-CONTRACTORS OF THE ASSESSEE, WHICH IS BAD IN LAW AND FACTS AND THE LEARNED CIT(A) HAS ERR ED IN MAINTAINING THE SAME. 3. THAT THE DISALLOWANCE OF TRANSPORT EXPENSES OF RS.6 3,21,553/- AND MAKING ASSESSMENT ON TOTAL INCOME OF RS.67,11,941/- AGAINST RETURNED INCOME OF RS.1,82,9 28/- IS CONFISCATORY IN NATURE AND THE LEVY OF TAX IS NOT ON REAL INCOME BUT ON A NOTIONAL INCOME WHICH I S AGAINST THE CONSTITUTION AND BAD IN LAW AND THE LEARNED CIT(A) HAS ERRED IN MAINTAINING THE ADDITIO N. 4. THAT THE LEARNED ITO HAS ERRED IN INVOKING THE PROV ISIONS OF SEC. 40(A)(IA) FOR THE NON DEDUCTION OF T AX AMOUNTS TO ONE MORE PANEL CONSEQUENCE AND IT WOULD AMOUNT TO DOUBLE JEOPARDY, WHICH IS NOT PERMITTED BY ARTICLE 20 OF THE CONSTITUTION OF INDIA AND THE LEARNED CIT(A) HAS ERRED IN MAINTAINING THE SAME. 5. THAT THE LEARNED A.O. HAS ERRED IN DISALLOWING RS.2 5,000/- OUT OF TOUR & TRAVEL EXPENSES, WHICH IS UNJUSTIFIED, WRONG AND BAD IN LAW AND LEARNED CIT(A ) HAS ERRED IN SUSTAINING THE ADDITION. 6. THAT THE LEARNED A.O. HAS ERRED IN MAKING DISALLOWA NCE OF RS.1,07,012/- ON ACCOUNT OF VARIATION IN N.P . AS COMPARED TO EARLIER YEARS, WHICH IS WRONG, UNJUS T AND BAD IN LAW AND THE LEARNED CIT(A) HAS ERRED I N SUSTAINING THE ADDITION. 7. THAT THE LEANED A.O. HAS ERRED IN MAKING DISALLOWAN CE OF RS.50,000/- WHICH IS UNJUST AND BAD IN LAW AN D THE LEARNED CIT(A) HAS ALSO ERRED IN SUSTAINING THE ADDITION. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR)STATED THAT THERE WAS DELAY OF DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL.HE RE FERRED TO THE APPLICATION FILED BY THE ASSESSEE AND THE AFFIDAVIT OF THE ASSESSEE FILED IN THIS REGARD.IT W AS ARGUED THAT THE DUE TO DETECTION OF CANCER IN TH E CASE OF THE MOTHER OF THE ASSESSEE AND HER ULTIMATE DEAT H THE ASSESSEE WAS DISTURBED AND COULD NOT FILE TH E APPEAL IN TIME,THAT HIS BUSINESS WAS CLOSED,THAT TH E ASSESSEE HAD APPROACHED THE HONBLE HIGH COURT AN D AS PER THE DIRECTION OF THE COURT HAD FILED THE APP EAL BEFORE THE TRIBUNAL.WE HAVE GONE THROUGH THE APPLICATION AND THE AFFIDAVIT OF THE ASSESSEE FILED FOR CONDONING THE DELAY.WE FIND THAT THE REASONS G IVEN BY THE ASSESSEE ARE CONVINCING, THEREFORE, WE CONDO N THE DELAY. THE AR DID NOT PRESS GROUNDS NO.5-7 OF THE APPEAL.S O,SAME STAND DISMISSED AS NOT PRESSED. 2 ITA NO. 56/BLPR/11-MANINDER PAL SINGH GILL 2. THE ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF TRANSPORTATION,FILED HIS RETURN OF INCOME ON 29. 03.2006,DECLARING TOTAL INCOME AT RS.1, 82, 928/-.T HE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT A T THE TOTAL INCOME OF RS.67,11,941/-. 3. EFFECTIVE GROUND OF APPEAL (GOA.1-4)RELATES TO THE DISALLOWANCE MADE BY THE AO U/S. 40(A)(IA) OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE AS A TRANSPORTER WAS REQUIRED TO MAKE TDS ACCORDING TO PROVISIONS OF CHAPTER XVIIB O F THE ACT,THAT THE AUDITOR HAD REPORTED THAT NO SUCH TDS WAS MADE. IN THE COURSE OF ASSESSMENT PROC EEDINGS AFTER ADMITTING THE DEFAULT, ASSESSEE WORKED OUT THE AMOUNT ON WHICH TDS WAS NOT MADE AT RS.12,86,369/-. IT WAS HELD THAT AS PER PROVISIONS OF SEC. 194C(3) THE APPELLANT WAS REQUIRED TO MAKE TDS BUT THE SAME WAS NOT MADE,THAT THE ASSESSEE WAS LIABLE FOR MAKING TDS EVEN AFTER AMENDMENT TO T HE SAID SECTION W.E.F. 01.10.04.ON THE BASIS OF TRANSPORTATION PAYMENT ACCOUNT,ENCLOSED WITH THE RE TURN, THE AO WORKED OUT THE DISALLOWABLE AMOUNT OF EXPENDITURE AT RS.63,21,553/- ATTRACTING THE PRO VISIONS OF SEC.40(A)(IA) OF THE ACT. 4. DURING THE COURSE OF APPEAL PROCEEDINGS,THE ASSESSE E CONTENDED THAT HE DEPLOYED TRUCKS OF OTHER PARTIES BUT COULD NOT MAKE TDS,THAT TDS WAS A MODE OF TAX COLLECTION,THAT PROVISIONS OF SECTION 40(A)(IA)OF THE ACT WERE INTENDED TO ENSURE BETTER COMPLIANCE AND TO CURB BOGUS OR NON-GENUINE PAYMENTS,THAT THERE WERE OTHER PROVISIONS TO ENFORC E TDS PROVISIONS,THAT THE PROVISIONS SEEKING TO INVOLVE ONE MORE PENAL CONSEQUENCE BY WAY OF DISALL OWANCE OF EXPENDITURE WOULD AMOUNT TO DOUBLE JEOPARDY AND ARTICLE 20(2) OF THE CONSTITUTION WAS AGAINST DOUBLE JEOPARDY,THAT THE PROVISION WAS BAD IN LAW AND ALSO UNCONSTITUTIONAL.RELYING ON THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO (131 ITR 597),HE CONTENDED THAT WH ILE APPLYING PROVISIONS INTENTION OF THE LEGISLATUR E COULD NOT BE OVERLOOKED. REFERRING TO ENTRY 82 IN L IST 1 OF THE SEVENTH SCHEDULE TO THE CONSTITUTION, IT WAS CONTENDED THAT PARLIAMENT COULD NOT CHOOSE TAX AS INCOME AN ITEM WHICH IN NO RATIONAL SENSE CAN BE REGARDED AS CITIZENS INCOME OR EVEN RECEIPT. AFTER GOING THROUGH THE ORDER OF THE AO AND SUBMISS IONS OF THE ASSESSEE,THE FAA HELD THAT THE ASSESSEE HAD ADMITTED THE FACT OF APPLICABILITY OF TDS PROVI SIONS TO HIS CASE,THAT HE HAD ALSO ACCEPTED THE QUANTUM OF DISALLOWANCE MADEM,THAT HE DID NOT FURNI SH ANY OTHER EXPLANATION EITHER AT THE TIME OF ASSESSMENT PROCEEDINGS OR DURING APPEAL PROCEEDINGS REGARDING ADMISSIBILITY OF THE EXPENDITURE, THAT I N THE APPEAL PROCEEDINGS HE HAD ONLY AGITATED THE CON STITUTIONAL VALIDITY OF THE PROVISIONS AND NOT OTHERWISE.THE FAA HELD THAT THE DISALLOWANCE MADE B Y THE AO WAS MADE AS PER STIPULATED PROVISIONS OF THE ACT,THAT THE CONSTITUTIONAL VALIDITY OF PROVISI ONS OF SEC. 40(A)(IA) HAS ALREADY BEEN UPHELD BY TH E HONBLE ALLAHABAD HIGH COURT IN THE CASE OF DEYS M EDICAL (UP) P. LTD.(206 CTR 83).HE DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5.BEFORE US,THE AR STATED THAT THE ASSESSEE HAD MAD E PAYMENTS THAT WERE LESS THAN 20,000/-,THAT THE DISALLOWANCE COULD BE MADE ONLY IN RESPECT OF THE A MOUNT PAYABLE ON THE LAST DAY OF ACCOUNTING YEAR,THAT PROVISIONS OF SECTION WERE NOT APPLICABLE IN RESPECT OF AMOUNTS ALREADY PAID,THAT THE MATTER WAS TO LOOKED IN TO CONSIDERING THE LATEST LAW.DR SUPPO RTED THE ORDER OF THE FAA.AFTER CONSIDERING THE SUBMISSION OF BOTH THE PARTIES WE ARE OF THE OPINIO N THAT THE MATTER SHOULD BE RESTORED BACK TO THE FI LE OF THE AO FOR FRESH ADJUDICATION.HE IS DIRECTED TO DEC IDE THE ISSUE CONSIDERING THE ARGUMENT OF PAID AND PAYABLE CONTROVERSY AND CONSIDERING THE FACT THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION.THE AO WOULD DECIDE THE APPEAL AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.EFFECTIVE GROUND OF APPEAL FILED BY TH E ASSESSEE IS ALLOWED IN HIS FAVOUR,IN PART. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. > > > > #> #> #> #> @ @@ @ A A A A - -- - . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER,2014. - E 22 F ,2014 - . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( ! ! ! ! / RAJENDRA) PRESIDENT/ = = = = /ACCOUNTANT MEMBER 3 ITA NO. 56/BLPR/11-MANINDER PAL SINGH GILL /RAIPUR. F DATE: 22.12.2014 - -- - *#GH *#GH *#GH *#GH IH IH IH IH / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / ) 2. RESPONDENT / *+) 3. THE CONCERNED CIT(A)/ J K , 4. THE CONCERNED CIT / J K 5. DR ITAT,RAIPUR BENCH/ H *## , . . . , 6. GUARD FILE/ . +H *# //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, RAIPUR