ACIT 25(1), MUMBAI V. CHANDRIAH B KALAL, MUMBAI

ITA 5686/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2841 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 10-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBAI BENCH C, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5686/MUM/2014 FOR ASSESSMENT YEAR: 2007-08 ASST. CIT, 25(1), PRATYAKSHAKAR BHAVAN, ROOM NO. 202, 2 ND FLOOR, BKC, BANDRA (EAST), MUMBAI-400051. VS. SHRI CHANDRIAH B. KALAL PLOT NO. 71, D-1, MANDAR CHS LTD., RSC-21, GORAI- 1, BORIVALI (W), MUMBAI-400092. PAN: AABPK8755H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI NAVEEN GUPTA (DR) ASSESSEE BY : NONE. DATE OF HEARING : 20.06.2016 DATE OF ORDER : 22.06.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-35, MUMBAI DATED 10.06.2014 FOR ASSESSMENT YEAR (AY) 20 07-08. THE REVENUE HAS RAISED THE FOLLOWING GROUND OF APPEAL: I 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.59,9 3,334/- MADE U/S. 40A(IA) OF THE ACT ON ACCOUNT OF NON DEPOSIT OF TDS WITHIN THE TIME SPECIFIED UNDER THE ACT.' II 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN NOT CONSIDERING THE DECISION OF SPECIAL BENCH OF MUMBAI ITAT IN THE CASE OF BHARATI SHIPYARDS LTD IN FAVOUR OF REVENUE BY HOLDING THAT THE AMENDMENT BROUGHT OUT B Y THE FINANCE ACT, 2010 TO SECTION 40(A)(IA) WITH EFFECT FROM 1-4 -2010, IS NOT REMEDIAL AND CURATIVE IN NATURE AND IS THEREFORE NO T RETROSPECTIVE. ' III 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN DECIDING THE ISSUE RELYING ON TH E DECISION OF THE APEX COURT IN THE CASE OF ALLIED MOTORS (P) LTD PER TAINING TO PROVISION U/S. 43B OF THE ACT.' 2 ITA NO. 5686/MUM/2014- SHRI CHANDRIAH B. KALAL IV 'THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED .' V 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AY GROUND OR ADD A NEW GROUND.' 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND CONTRACT WORK, FILED HIS RET URN OF INCOME ON 29.10.2007 DECLARING TOTAL INCOME OF RS. 35,17,930/ -. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 29.12.2009. THE ASSESSMENT WAS RE- OPENED VIDE NOTICE U/S 148 DATED 07.03.2013 AFTER R ECORDING THE REASONS. AFTER RE-OPENING, THE ASSESSEE WAS SERVED WITH NOTI CE U/S 143(2)/142(1) DATED 12.08.2013, WHEREIN ASSESSEE WAS ASKED TO SUB MIT THE DETAILED PAYMENT MADE FOR TRANSPORT, LABOUR AND PROFESSIONAL FEES, THE DETAILS OF TDS DEDUCTED ALONG WITH THE DATE OF DEPOSIT. THE AS SESSEE SUBMITTED ITS REPLY DATED 06.12.2013. ALONG WITH REPLY THE ASSESS EE SUBMITTED THE DETAILS OF TDS AND THE DETAILS OF DEPOSIT IN GOVERN MENT TREASURY. THE ASSESSING OFFICER (AO) OBSERVED THAT ALTHOUGH THE T DS DEDUCTED, THOUGH DEPOSITED IN GOVERNMENT TREASURY BUT BEYOND THE DUE DATE. THE ASSESSEE WAS AGAIN ASKED TO EXPLAIN AS TO WHY THESE PAYMENTS TO THE CONTRACTOR FOR LABOUR CHARGES, TRANSPORT CHARGES SHOULD NOT BE DIS ALLOWED U/S 40(A)(IA) OF THE ACT. THE ASSESSEE AGAIN SUBMITTED ITS REPL Y DATED 10.12.2013 AND EXPLAINED THAT VIDE FINANCE ACT, 2010, WHEREIN THE TIME LIMIT FOR PAYMENT OF TDS, FOR ALL TRANSACTION COVERED IN SECTION 40(A )(IA) IS ALLOWED TO DEPOSIT UP TO DUE DATE OF FILING OF RETURN AND FURT HER CONTENDED THAT FURTHER AMENDMENT TO SECTION 40(A)(IA) BROUGHT IN FINANCE A CT, 2012 WHICH IS ALSO RETROSPECTIVE AND THE DEFAULT OF ASSESSEE (DELAY DE POSIT OF TDS) IS NOT HIT BY THE PROVISIONS OF SECTION 40(A)(IA). THE CONTEN TION OF ASSESSEE WAS NOT ACCEPTED AND AO DISALLOWED A SUM OF RS. 59,93,334/- U/S 40(A)(IA) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FIL ED APPEAL BEFORE THE CIT(A). THE CIT(A) HEARING THE CONTENTION OF ASSESS EE AND DELETED THE ENTIRE ADDITION ON THE BASIS OF DECISION OF CALCUTT A HIGH COURT IN CASE OF CIT VS. VIRGIN CREATION HOLDING THAT AMENDMENT IN S ECTION 40(A)(IA) IS 3 ITA NO. 5686/MUM/2014- SHRI CHANDRIAH B. KALAL RETROSPECTIVE IN NATURE. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE HAS FILED THE PRESENT APPEAL BEFORE US 3. NONE APPEARED ON BEHALF OF ASSESSEE WHEN MATTER CAM E UP FOR HEARING ON 20.06.2016. NONE APPEARED DESPITE REPEATED CALLS ON BEHALF OF THE ASSESSEE. WE LEFT NO OPTION EXCEPT TO HEAR THE DR FOR REVENUE AND TO PROCEED FURTHER. LD. DR FOR REVENUE RELIED UPON THE ORDER OF AO AND PRAYED THAT ORDER OF AO BE RESTORED AND THAT CIT(A) MAY BE REVERSED AND RELIED UPON THE DECISION OF KERALA HIGH COURT [2015 ] 63 TAXMANN.COM 99.THE DECISION REFERRED BY DR FOR REVENUE IS NOT A PPLICABLE AS THE HONBLE APEX COURT HELD THAT THE PROVISO INSERTED B Y FINANCE ACT IS RETROSPECTIVE IN NATURE. 4. WE HAVE CONSIDERED THE CONTENTIONS OF DR FOR REVENU E AND PERUSED THE ORDER OF AUTHORITIES BELOW. AS PER OUR OPINION, TH E MUTE QUESTION FOR OUR CONSIDERATION IS, IF SECOND PROVISO ATTACH WITH SEC TION 40(A) (IA) INTRODUCED W.E.F. 01.04.2013 IS APPLICABLE RETROSPECTIVE OR PR OSPECTIVE EFFECT. FIRST PROVISO ATTACHED WITH SECTION 40(IA) WAS INSERTED B Y FINANCE ACT, 2010 W.E.F. 01.04.2010. FURTHER, SECOND PROVISO ATTACHED WITH SECTION 40(A)(IA) WAS INSERTED BY FINANCE ACT, 2012 W.E.F. 01.04.2013 . THE HONBLE APEX COURT IN CASE OF ALLIED MOTORS (P) LTD. AND ALOM EX TRUSIONS LTD. HELD THAT PROVISO INSERTED IN FINANCE ACT, 2010 WOULD APPLY R ETROSPECTIVE W.E.F 2005.THUS, KEEPING IN VIEW THE APPLICABILITY OF PRO VISO ATTACHED WITH SECTION 40(IA) WHICH WAS HELD RETROSPECTIVE BY THE HONBLE APEX COURT AND THE SAME WAS CORRECTLY APPRECIATED BY CIT (A) I N THE IMPUGNED ORDER. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY CIT(A). IN THE RESULT, THE APPE AL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 22 ND JUNE, 2016. SD/- SD/- (RAJENDRA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/06/2016 S.K.PS 4 ITA NO. 5686/MUM/2014- SHRI CHANDRIAH B. KALAL / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/