Smt.Nisha K.S., Palakkad V. DCIT, Trichur

ITA 57/COCH/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52332 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 01-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: T M SREEDHARAN
• Section: 194C

Judgement Text

1 ITA NOS 57, 58 & 59/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S.GANESAN (JM) & SHRI SANJAY ARORA (AM) I.T.A.NO. 57, 58 & 59 /COCH/20 1 0 ASSESSMENT YEARS 2005-06, 2006-07 & 2007-08 SMT. NISHA K.S. RAJA CERAMICS MARKET ROAD PALAKKAD VS. THE DY.CIT, CENT.CIR. THRISSUR (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TM SREEDHARAN RESPONDENT BY SHRI S.R. SENAPATI DATE OF HEARING 22 - 11 - 2011 DATE OF PRONOUNCEMENT 2 2 - 12 - 2011 O R D E R PER N.R.S. GANESAN (JM) ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST THE INDEPENDENT ORDERS OF COMMISSIONER OF INCOME-TAX(A) -I, KOCHI DATED 14-10-2009 AND PERTAIN TO ASSESSMENT YEARS 2005-06, 2006-07 & 2007-08. 2 ITA NOS 57, 58 & 59/COCH/2010 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE U/S 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TAX U/S 1 94C OF THE ACT. 3. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HIRED LORRIES FOR TRANS ACTION OF GOODS. ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSEE HI RED LORRIES FOR TRANSPORTATION OF GOODS AS AND WHEN IT IS REQUIRED. THERE IS NO CONTRACT BETWEEN THE ASSESSEE AND THE TRANSPORTER. REFERRING TO SECTION 194C OF THE ACT, THE LD.REPRESENTATIVE SUBM ITTED THAT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDE NT FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE CON TRACTOR AND THE PERSONS WHO ARE ENUMERATED IN SECTION 194C, THEN T AX SHALL BE DEDUCTED AT SOURCE AT THE RATE PRESCRIBED THEREIN. REFERRING TO SECTION 194C(K) OF THE ACT, THE LD.SENIOR COUNSEL SUBMITTED THAT INDIVIDUALS HAVE BEEN BROUGHT WITHIN THE MEANING OF SECTION 194 C BY FINANCE ACT, 2007 WITH EFFECT FROM 01-06-2007. PRIOR TO 01-06-2 007, INDIVIDUALS NEED NOT DEDUCT ANY TAX WHILE MAKING PAYMENT TO ANY CONTRACTOR. THE ASSESSEE BEING AN INDIVIDUAL, ACCORDING TO THE LD.S ENIOR COUNSEL, PROVISIONS OF SECTION 194C(K) ARE APPLICABLE FOR TH E YEAR UNDER CONSIDERATION. ACCORDING TO THE LD.SENIOR COUNSEL, SECTION 194C(K) IS APPLICABLE ONLY WITH EFFECT FROM 01-06-2007 AND THE REFORE, THE ASSESSEE IS NOT LIABLE TO DEDUCT ANY TAX IN RESPECT OF ANY PAYMENT MADE TO THE CONTRACTOR. 3 ITA NOS 57, 58 & 59/COCH/2010 4. ON THE CONTRARY, SHRI S.R. SENPATI, THE LD DR SU BMITTED THAT HE DID NOT LIKE TO COMMENT ON THE APPLICABILITY OF THE PROVISIONS OF SECTION 194C(K). HOWEVER, THE LD.REPRESENTATIVE SUBMITTED T HAT SINCE THE ASSESSEE HAS PAID MONEY TO THE TRANSPORTER FOR TRAN SPORTING THE GOODS, THE ASSESSEE HAS TO NECESSARILY DEDUCT TAX. ON A QUERY FROM THE BENCH WHETHER THE ASSESSEE WAS LIABLE TO DEDUCT TAX DURING THE YEAR UNDER CONSIDERATION, THE LD.DR REITERATED THAT HE DID NOT WANT TO COMMENT ON THE APPLICABILITY OF THE PROVISIONS OF T HE ACT SINCE THE PROVISION WAS OPERATIVE WITH EFFECT FROM 01-06-2007 . THE LD.DR SUBMITTED THAT SINCE THIS ISSUE WAS NOT RAISED BEFO RE THE LOWER AUTHORITIES, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. NO DOUBT, SECTION 194C WAS AMENDED BY FINANCE ACT, 2007 WITH EFFECT F ROM 01-06-2007. SECTION 194C(K) WAS INTRODUCED IN THE STATUTE BOOK WITH EFFECT FROM 01-06-2007. PRIOR TO INTRODUCTION OF SECTION 194C( K), INDIVIDUALS AND HUFS WERE NOT REQUIRED TO DEDUCT TAX WHILE MAKING PA YMENT FOR CARRYING OUT ANY WORK PURSUANCE TO A CONTRACT. HOWE VER, WITH EFFECT FROM 01-06-2007, EVEN THE INDIVIDUALS ARE REQUIRED TO DEDUCT TAX. THE ASSESSMENT YEARS UNDER CONSIDERATION ARE 2005-06, 2 006-07 AND 2007-08. THEREFORE, IN OUR OPINION, THE ASSESSEE I S NOT REQUIRED TO DEDUCT TAX U/S 194C(K) FOR THE ASSESSMENT YEARS UND ER CONSIDERATION. 4 ITA NOS 57, 58 & 59/COCH/2010 FOR THE PURPOSE OF EXAMINING THE APPLICABILITY OF P ROVISIONS THE DEPARTMENTAL REPRESENTATIVE IS EXPECTED TO ASSIST T HE BENCH BY OFFERING HIS COMMENTS. UNFORTUNATELY, THE LD.DR SU BMITTED THAT HE DID NOT WANT TO COMMENT ON THE APPLICABILITY OF THE PRO VISIONS OF THE ACT, EVEN THOUGH IT IS ADMITTEDLY AMENDED BY FINANCE ACT , 2007 WITH EFFECT FROM 01-06-2007. SINCE NO FACTUAL ASPECT IS REQUIR ED FOR ADJUDICATION OF THIS MATTER AND IT BEING APPLICABILITY OF THE LE GAL PROVISION APPLICABLE FROM 01-06-2007 WE FIND THAT THE MATTER NEED NOT BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER AS CONTENDED B Y THE LD.DR. SINCE SECTION 194(K) IS NOT APPLICABLE FOR THE YEARS UNDE R CONSIDERATION, THERE IS NO QUESTION OF ANY DISALLOWANCE U/S 40(A)( IA) OF THE ACT. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ADDITION MADE U/S 40(A)(IA) FOR NON DEDUCTIO N OF TAX ARE DELETED. 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2012 SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DT : 22 ND DECEMBER, 2012 PK/- 5 ITA NOS 57, 58 & 59/COCH/2010 COPY FORWARDED TO: 1. SMT. NISHA K.S., RAJA CERAMICS, MARKET ROAD, PALAKK AD 2. THE DY.IT, CENT.CIR., THRISSUR 3. THE COMMISSIONER OF INCOME-TAX(A)-I, KOCHI 4. THE COMMISSIONER OF INCOME-TAXM 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL , COCHIN