Shivamogga District Co-operative Milk Producers Society Union Limited , Shivamogga V. Assistant Commissioner of Income Tax Circle-1 , Shivamogga

ITA 570/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1337 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 21-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS J
• Assessee Lawyers: SIDDESH S N GADDI
• Keywords: Non compliance; Tax effect; TDS
• Section: 143(3); 40(a)(ia); 194C; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, BENGALURU BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 570 /BANG/201 9 (ASSESSMENT YEAR: 2013-14) M/S.SHIVAMOGGA DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETY UNION LTD. NH 206, MACHENAHALLI, NIDIGE POST, SHIVAMOGA-577222. PAN:AAGFS 7684 G VS. APPELLANT ASST. COMMISSIONER OF INCOME - TAX, CIRCLE-1, SHIVAMOGA. RESPONDENT APPELLANT BY : SHRI SIDDESH SN GADDI, ADVOCATE. RESPONDENT BY : SWAPNA DAS, JCIT(DR) DATE OF HEARING: 09/05/2019 DATE OF PRONOUNCEMENT: 14 /0 6 /2019 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A), DAVANGERE, PASSED U/S 143(3) AND 250 OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT]. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: 1. THE IMPUGNED ORDER OF LEARNED COMMISSIONER OF INCOME TAX - (APPEALS) (`CIT(A)') UPHOLDING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME- TAX ACT, 1961 (THE ACT') IS ERRONEOUS AND LIABLE TO BE QUASHED ITA NO.570/BANG/2019 PAGE 2 OF 5 IN ENTIRETY; 2. THE LEARNED CIT(A) AND ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, SHIVAMOGGA (THE LEARNED AO') HAVE ERRED IN PASSING ORDER AGAINST NONEXISTENT PAN ; 3. THE LEARNED CIT(A) AND THE LEARNED AO HAVE ERR ED IN DISALLOWING AN AMOUNT OF RS. 15,25,51,536/- UNDER SECTION 40(A)(IA) OF THE ACT; 4. THE LEARNED CIT(A) HAS ERRED IN LAW IN NOT PAS SING SPEAKING ORDER AGAINST THE GROUNDS / CONTENTIONS RA ISED BY THE APPELLANT; 5. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FAC TS IN PERVERSELY STATING 'THE APPELLANT HAS NOT FURNISHED ANY MATERIAL IN SUPPORT OF HIS CLAIM', THEREBY FURTHER ERRED IN PASSING ORDER WITHOUT CONSIDERING SUBMISSIONS MADE; 6. THE LEARNED CIT(A), IN UPHOLDING THE ORDER OF THE LEARNED AO, HAS ERRED IN NOT APPRECIATING THAT THE PROVISIONS OF SECTION 194C(6) AND SECTION 194C(7) A RE INDEPENDENT IN NATURE; 7. THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATI NG THE APPELLANT IS NOT REQUIRED TO DEDUCT TDS AS PER PROVISIONS OF SECTION.194C(6) OF THE ACT; 8. FOR THAT THE LEARNED CIT(A) HAS FAILED TO CONS IDER THE OBSERVATION OF FOLLOWING RULINGS, WHEREIN IT HAS BE EN CATEGORICALLY OBSERVED THAT THE LIABILITY TO DEDUCT TAX CEASES THE MOMENT THE ASSESSEE OBTAINS PAN OF THE CONTRACTORS. THAT LIABILITY CANNOT BE CONSIDERED TO BE REINSTATED ON A SUBSEQUENT NON COMPLIANCE WITH THE PROVISION OF SECTION 194C(7): 8.1. SOMA RANI GHOSH VS. DCIT [IT APPEAL NO. 1420 (KOL.) OF 2015 [ASSESSMENT YEAR 2012-13]]; 8.2. ITO VS. MANIKGARH CEMENT (DIVISION OF TEXTILES 86 INDUSTRIES) I.T.A. NOS. 316 TO 319/NAG/2015 [ASSESSMENT YEARS : 2012-13 TO 2015-16.], ITA NO.570/BANG/2019 PAGE 3 OF 5 8.3. I.T.0.(T.D.S.) VS. M/S RAYMOND UCO DENIM PVT. LTD. (FABRIC DIVISION) I.T.A. NOS.351 86 352/NAG/2015 [ASSESSMENT YEARS : 2013-14 86 201415] 8.4.ACIT, CIRCLE-I V. MR. MOHAMMED SUHAIL IN ITA NO: 1536/HYD/2014. (TOTAL TAX EFFECT: RS. 6,36,92,780/ ) ON THE BASIS OF ABOVE GROUNDS AND OTHER GROUNDS WHI CH MAY BE URGED AT THE TIME OF HEARING WITH THE CONSEN T OF THE HONOURABLE TRIBUNAL, IT IS PRAYED THAT THE ORDE R PASSED UNDER SECTION 250, TO THE EXTENT IT IS AGAIN ST THE APPELLANT, BE QUASHED AND RELIEF SOUGHT BE GRANTED. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A CO- OPERATIVE SOCIETY ENGAGED IN PURCHASE AND SALE OF M ILK AND MILK PRODUCTS AND FILED THE RETURN OF INCOME ELECTRONICA LLY ON 29/09/2013 WITH TOTAL INCOME OF RS.1,00,99,240/- AN D THE RETURN OF INCOME WAS PROCESSED U/S 143(1). SUBSEQUE NTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2 ) OF THE ACT WAS ISSUED. IN COMPLIANCE, THE LEARNED AR APPEARED FROM TIME TO TIME AND FILED DETAILS. ON VERIFICATION OF FINA NCIAL STATEMENTS, IT WAS FOUND THAT THE ASSESSEE HAS DEBITED RS.15,25 ,51,536/- UNDER THE HEAD PROCESSING AND MANUFACTURING EXPENS ES. IN PARTICULAR, AO FOUND THAT THE ASSESSEE HAS FILED TH E DETAILS BY LETTER DATED 29/3/2016 IN RESPECT OF NON-APPLICABIL ITY OF PROVISIONS OF SECTION 194C. AO WAS NOT SATISFIED W ITH THE EXPLANATION AND FOUND THAT THE ASSESSEE HAS VIOLATE D THE PROVISIONS OF SECTION 194C(6) AS NO TDS WAS DEDUCTE D AND THE ITA NO.570/BANG/2019 PAGE 4 OF 5 SAME WAS DISALLOWED AND ASSESSED THE TOTAL INCOME O F RS.16,26,50,780/- VIDE ORDER DATED 31/3/2016. 4. AGGRIEVED BY THE ORDER, ASSESSEE FILED AN APPEAL WITH THE CIT(A) WHERE THE CIT(A) HAS CONFIRMED THE ADDIT ION AND DISMISSED THE ASSESSEES APPEAL. 5. AGGRIEVED BY THE ORDER, THE ASSESSEE FIL ED AN APPEAL WITH THE TRIBUNAL. AT THE TIME OF HEARING, LEARNED AR SUBMITTED THAT THE CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE AND CONFIRMED THE APPLICATION OF THE P ROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE FILED W RITTEN SUBMISSIONS EXPLAINING THE REASONS ON NON-APPLICABI LITY OF TDS PROVISIONS AND STATEMENT OF CONTRACTOR NAME, PAN NO AND WORKS WITH JUDICIAL DECISIONS AND PRAYED FOR ALLOWING THE APPEAL. CONTRA, LEARNED DR RELIED ON THE CIT(A) OR DER AND PRAYED FOR DISMISSAL OF THE APPEAL. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE ONLY DISPUTED ISSUE ENVISAGED BY TH E LEARNED AR ON DISALLOWANCE OF FREIGHT CHARGES FOR NON-DEDUC TION OF TAX U/S 194C OF THE ACT. LEARNED ARS CONTENTION THAT THE CIT(A) HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND PASSED NON-SPEAKING ORDER. ON PERUSAL OF THE MATERIAL FIL ED BEFORE THE TRIBUNAL, WE FOUND THAT THESE SUBMISSIONS WERE NOT DEALT IN THE ITA NO.570/BANG/2019 PAGE 5 OF 5 APPELLATE PROCEEDINGS. THEREFORE, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE RESTORE THE ENTIRE DISPUTED ISSUE TO TH E FILE OF THE CIT(A) TO ADJUDICATE AFRESH AND PASS A SPEAKING AND REASONED ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARI NG TO THE ASSESSEE AND ALLOW THE GROUNDS OF APPEAL FOR STATIS TICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEAL IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JUNE, 2019. SD/- SD/- (B.R. BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BENGALURU D A T E : 14/06/2019 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)- 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE