M/s. Raj Electronics, Bhubaneswar V. DCIT, Circle-4(1), Bhubaneswar

ITA 56/CTK/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4355 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: A K ROY
• Section: 142(1)

Judgement Text

1 ITA NO.56/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 56 /CTK/201 7 ASSESSMENT YEAR : 201 2 - 2013 M/S. RAJ ELECTRONICS, SCR - 26, JANPATH, BAPUJI NAGAR, BHUBANESWAR. VS. DCIT, CIRCLE - 4(1), BHUBANESWAR. PAN/GIR NO. AABFR 6158 H (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI A.K.ROY, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 1 2 / 0 2 / 201 8 DATE OF PRONOUNCEMENT : 14 / 0 2 / 201 8 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2, BHUBANESWAR DATED 30.11.2016 FOR THE ASSESSMENT YEAR 2012 - 2013. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.38,64,705/ - U/S.40(A)(IA) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE - FIRM IS ENGAGED IN RETAIL AND WHOLE SALE TRADING IN ELECTRONIC GOODS . RETURN OF INCOME WAS E - FILED ON 30.09.2012 DECLARING TOTAL INCOME OF RS. 32,14,420/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS IN AST AND , ACCORDINGLY , NOTICE U/S 143(2) OF THE IT ACT, 1961 WAS ISSUED ON 23.09.2013 AND DULY 2 ITA NO.56/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 SERVED ON THE A SSESSEE. SUBSEQUENTLY, NOTICE U/S 142(1) OF THE ACT, WAS ISSUED ON 07.07.2014 & 21.10.2014 THROUGH SPEED POST AND DULY SERVED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED DOCUMENTS/EVIDENCE, BANK STATEMENT, PROFIT AND LOSS A/C, AUD IT REPORT, LEDGER COPY . THE ASSESSING OFFICER ON PERUSAL OF P & L ACCOUNT FURNISHED BY THE ASSESSEE, FOUND THAT THE ASSESSEE HAD DEBITED EXPENSES TO THE TUNE OF RS. 37, 19,445/ - TOWARDS THE ADVERTISEMENT & PUBLICITY CHARGES OUT OF TOTAL EXPENSES RS. 40,07 ,845/ - INCURRED IN THIS REGARD. ON VERIFICATION OF BOOKS OF LEDGER ACCOUNTS, BILLS/VOUCHERS, IT WAS SEEN THAT THE ASSESSEE HAD MADE THE FOLLOWING PAYMENTS TO THE FOLLOWING PARTIES WHOSE GROSS RECEIPTS EXCEEDS RS. 50,000/ - PER ANNUM AS UNDER: SR.NO. TO W HOM PAID AMOUNT PAID 1. MAA COMMUNICATION 21,25,868 2. MASTERMIND ADVT. SERVICES 11,14,637 3. JAYASHREE TEN HOUSE, BAPUJI NAGAR 1,24,200 4. PUNJAB NATIONAL BANK 5,00,000 38, 64,705 THE ASSESSING OFFICER OBSERVED THAT THE TDS HAS NOT BEEN DEDUCTED FROM THE AMOUNT PAID TOWARDS ADVERTISEMENT U/S.194C OF THE ACT AND, THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, HE DISALLOWED THE AMOUNT AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.83,09,713/ - AND PASSED ORDER U/S.143(3) OF THE ACT ON 27.3.2015. 3 ITA NO.56/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), THE ASSESSEE HAS SUBMITTED THE CERTIFICATE S IN FORM NO.26A FROM THE PARTIES FROM WHOM ADVERTISEMENT SERVICES WERE RENDERED AND THE SAME W ERE FILED IN APPELLATE PROCEEDINGS WHEREAS THE CIT(A) OBSERVED THE SECOND PROVISO OF SECTION 40(A)(IA) OF THE ACT HAS COME INTO EFFECT FROM THE ASSESSMENT YEAR 2013 - 14 AND THE FACT REMAINS THAT THE CERTIFICATES FILED BY THE ASSESSEE IN FORM 26A FROM THE PARTIES CANNOT BE CONSIDERED AS THE ASSESSEES CASE IS PRIOR TO AMENDED PROVISO W.E.F. 2013 - 14 AND THESE CERTIFICATES WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND THE CIT(A) HAS NOT CONSIDERED THE FACTS ON RECORD AND OVERLOOKED TH E MATERIAL AND DISMISSED THIS GROUND OF APPEAL AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNA L. 7. BEFORE US, THE LD A.R. SUBMITTED THAT THE ASSESSEE HAS OBTAINED THE CERTIFICATES FROM THE PARTIES BUT COULD NOT SUBMIT IN THE ASSESSMENT PROCEEDINGS BUT SUBMITTED BEFORE THE CIT(A). WHEREAS, T HE CIT(A) HAS NOT CONSIDERED THESE FACTS AND DISMISSED THE ANW ON THE GROUND THAT AS THE AMENDMENT TO SECTION 40(A)(IA) OF THE ACT IS EFFECTIVE FROM 2013 - 14. LD A.R. FURTHER SUBMITTED THAT THIS AMENDMENT HAS BEEN CONSIDERED BY THE HONBLE DELHI HIGH COUR T IN THE CASE OF CIT VS ANSAL LAND MARK 4 ITA NO.56/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 TOWNSHIP PVT LTD., (2015) 377 ITR 635 (DEL) AND SUBMITTED THAT AN OPPORTUNITY BE PROVIDED TO THE ASSESSEE TO FURNISH THE CERTIFICATE IN FORM NO.26A BEFORE THE ASSESSING OFFICER AND TO DECIDE THE ISSUE ON THE BASIS OF DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP P LTD. (SUPRA). 8 . CONTRA, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAI LABLE ON RECORD. PRIMA FACIE, THE ISSUE REVOLVES ON NON - DEDUCTION OF TDS U/S.194C OF THE ACT. LD A.R. SUBMITTED THAT THE ASSESSEE HAS OBTAINED THE CERTIFICATES IN FORM NO.26A FROM THE PARTIES, WHICH COULD NOT BE FURNISHED BEFORE THE ASSESSING OFFICER BUT THE SAME WERE PRODUCED BEFORE THE CIT(A). THE CIT(A) DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE OBSERVING THAT THE SECOND PROVISO OF SECTION 40(A)(IA) OF THE ACT IS APPLICABLE FROM ASSESSMENT YEAR 2013 - 14 AND THE ASSESSEES FALLS IN THE ASSESSMENT YE AR 2012 - 13. WE FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP PVT LTD (SUPRA) HAS CONSIDERED THE AMENDED PROVISIONS AND OBSERVED AS UNDER: IT IS SEEN THAT THE SECOND PROVISO TO SECTION 40(A) (IA) WAS INSERTED BY THE FINAN CE ACT 2012 WITH EFFECT FROM 1ST APRIL 2013. THE EFFECT OF THE SAID PROVISO IS TO INTRODUCE A LEGAL FICTION WHERE AN ASSESSEE FAILS TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII B. WHERE SUCH ASSESSEE IS DEEMED NOT TO BE AN ASSESSEE IN DEFAULT IN TERMS OF THE FIRST PROVISO TO SUB - SECTION (1) OF SECTION 201 OF THE ACT, THEN, IN SUCH EVENT, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON 5 ITA NO.56/CTK/2017 ASSESSMENT YEAR : 2012 - 2013 THE DATE OF FURNISHING OF RETURN OF INCOME BY THE RESIDENT PAYE E REFERRED TO IN THE SAID PROVISO. 1 0 . CONSIDERING THE APPARENT FACTS AND MATERIALS ON RECORD, AND THE RATIO OF JUDICIAL DECISION, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER REQUIRES FRESH ADJUDICATION BY THE ASSESSING OFFICER IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE O F ANSAL LAND MARK TOWNSHIP PVT LTD (SUPRA). THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CERTIFICATES TO BE SUBMITTED BY THE ASSESSEE AND ADJUDICATE THE ISSUE AFRESH AS PER LAW. 11 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 14 / 0 2 /201 8 . SD/ - SD/ - ( N.S SAINI) (PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 14 / 0 2 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. RAJ ELECTRONICS, SCR - 26, JANPATH, BAPUJI NAGAR, BHUBANESWAR. 2. THE RESPONDENT. DCIT, CIRCLE - 4(1), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//