M/s U.P State Warehousing Corporation Ltd., Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 59/LKW/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83331 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARE BEING DISPOSED OF
• Keywords: Opportunity of being heard
• Section: 143(3); 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.59 & 60/LKW/2014 A.YRS.:2008 - 09 & 2009 - 10 M/S U. P. STATE WAREHOUSING CORPORATION LTD., BHANDARAN BHAWAN, NEW HYDERABAD, LUCKNOW. PAN:AAACU4814B VS. DY.C.I.T., RANGE - VI, LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT(A) - II, LUCKNOW BOTH DATED 30/10/2013 FOR THE ASSESSMENT YEAR 2008 - 09 AND 2009 - 2010. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09 I.E. I.T.A. NO.59/LKW/2014 ARE AS UNDER: 1. THAT THE LEARNED LOWER COURT ERRED IN FACTS OF THE CASE IN MAKING ADDITION OF RS.23,23,358/ - IN THE INCOME U/S 154 OF THE INCOME TAX. 2. THAT THERE WAS NO MISTAKE AS ALLEGED IN THE ORDER. 3. THAT THE ALLEGED MISTAKE WAS NOT MISTAKE APPARENT FROM RECORDS WHICH COULD BE RECTIFI ED U/S 154. APPELLANT BY SHRI ASHOK SETH, C.A. RESPONDENT BY SHRI R. K. RAM, D.R. DATE OF HEARING 21/08/2014 DATE OF PRONOUNCEMENT 2 3 /09/2014 2 4. THAT THE ORDER PASSED IS AGAINST THE MERIT, CIRCUMSTANCES AND LEGAL ASPECTS OF THE CASE. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 I.E. I.T.A. NO.60/LKW/2014 ARE AS UNDER: 1. THAT THE LEARNED LOWER COURT ERRED IN FACTS AND LEGAL ASPECTS OF THE CASE NOT ALLOWING THE APPEAL. 2. THAT THE CREDIT OF FULL TDS AS CLAIMED SHOULD HAVE BEEN ALLOWED WHEN THE DEDUCTOR'S CERTIFICATES OF WERE FILED. 3. THAT THE APPLICATION U/S 154 HAD BEEN FILED WITHIN TIME IT SHOULD NOT HAVE BE EN REJECTED WITHOUT GIVEN OPPORTUNITY. 4. THAT TREATING APPLICATION U/S 154 DISPOSED OF WITHOUT ALLOWING THE RELIEF CLAIMED ON THE GROUND THAT AST SOFTWARE ALLOWS RECTIFICATION FOR LIMITED TIME. 5. THAT THE ORDER PASSED AGAINST MERIT, CIRCUMSTANCES AND LEG AL ASPECTS OF THE CASE. 4. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IN ASSESSMENT YEAR 2008 - 09, THE ASSESSING OFFICER HAS PASSED AN ORDER U/S 154 OF THE ACT IN WHICH HE HAS MADE AN ADDITION OF RS.23,23,358/ - ON THE BASIS THAT AS PER THE COMPUTATION OF INCOME FILE BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME FOR THIS YEAR, THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.39,92,09,460/ - AS NE T PROFIT AS PER PROFIT & LOSS ACCOUNT BUT AS PER THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING ON 31/03/2008 , THE NET PROFIT WAS SHOWN AT RS.40,15,32,818/ - . HE SUBMITTED THAT THE FIGURE OF PROFIT OF RS. 39,92,09,460/ - HAS BEEN WORKED OUT BY THE ASSESSEE AF TER MAKING REQUIRED ADJUSTMENT S IN FINAL AMOUNT OF PROFIT AS PER PROFIT & LOSS ACCOUNT APPROPRIATION ACCOUNT AT RS.714/ - . HE SUBMITTED THAT THIS WORKING IS AVAILABLE ON PAGE NO. 5 OF THE PAPER BOOK, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENC E: NET PROFIT 714.00 ADD: TRF TO GENERAL RESERVE 19,29,91,000.00 TRF TO STAFF WELFARE FUND 27,44,700.00 INCOME TAX 12,42,16,550.00 3 INCOME TAX 4,94,63,053.00 PROVISION JAMAKARTA LOSS FUND 1,02,00,000 .00 PROPOSED DIVIDEND 1,67,47,500.00 DIVIDEND TAX 28,46,238.00 TOTAL 39,92,09,460.00 4.1 HE FURTHER SUBMITTED THAT EVEN IF THE COMPUTATION IS MADE BY ADOPTING THE FIGURE OF PROFIT IN PROFIT & LOSS ACCOUNT AT RS.40,15,32,818/ - T HEN ALSO , THE NET INCOME WILL BE SAME AS HAS BEEN REPORTED BY THE ASSESSEE IN THE COMPUTATION OF INCOME. HE FURTHER SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR MAKING COMPUTATION STARTING FROM THIS FIGURE OF PROFIT O F RS.40,15,32,818/ - INSTEAD OF MAKING DIRECT ADDITION IN THE TAXABLE INCOME ASSESSED BY THE ASSESSING OFFICER AND REPORTED BY THE ASSESSEE IN THE RETURN OF INCOME. 4.2 REGARDING THE ASSESSMENT YEAR 2009 - 10, HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF RAKESH KUMAR GUPTA VS. UNION OF INDIA AND ANOTHER AS REPORTED IN [2014] 365 ITR 143 (ALL). HE ALSO PLACED RELIANCE ON A TRIBU NAL DECISION IN I.T.A. NO.39/LKW/2014 DATED 28/02/2014. HE SUBMITTED A COPY OF THIS TRIBUNAL DECISION. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW IN BOTH THE YEARS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARDING THE ASSESSMENT YEAR 2008 - 09, WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE THAT INSTEAD OF COMPUTING THE INCOME BY ADOPTING THE NET PROFIT FIGURE AS PER PROFIT & LOSS ACCOUNT I.E. RS.4 0,15,32,818/ - , MAKING DIRECT ADDITION IN THE TAXABLE INCOME AS HAS BEEN DONE BY THE ASSESSING OFFICER IS NOT PROPER. HENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO ASSESSING OFFICER FOR FRESH COMPUTATION OF INCOME BY ADOPTING THIS 4 FIGURE OF PROFIT REPORTED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT AT RS.40,15,32,818/ - AND MAKING VARIOUS ADDITIONS AND DEDUCTIONS AS PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE A SSESSEE FOR ASSESSMENT YEAR 2008 - 09 IS ALLOWED FOR STATISTICAL PURPOSES. 8. REGARDING THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10, WE FIND THAT IN THIS YEAR, THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS NOT ALLOWED CREDI T OF FULL TDS. IN THIS REGARD, WE FIND THAT IN THE CASE OF CENTRAL INDIA TUBEWELL (SUPRA), IT WAS HELD BY THE TRIBUNAL THAT IF THERE IS ANY FAULT IN THE INTERNAL SOFTWARE SYSTEM OF THE DEPARTMENT, THE ASSESSEE SHOULD NOT SUFFER FOR THE SAME. THE DECISION OF THE TRIBUNAL IS CONTAINED IN PARAS 3 AND 4, WHICH ARE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED IN SHORT 'THE ACT'), THE ASSESSING OFFICER HAS ALLOWED CREDIT OF TDS AT RS.6,53,535 AS AGAINST TDS CLAIMED AT RS.13,43,145 DESPITE THE FACT THAT THE COMPLETE DETAILS OF TDS WERE FURNISHED ALONG WITH THE RETURN OF INCOME. THE ASSESSEE MOVED AN APPLICATION UNDER SECTION 154 OF THE ACT WITH A REQUEST TO ALLOW CREDIT OF THE ENTIRE TDS DEDUCTED, BUT THE ASSESSING OFFICER HAS ALLOWED CREDIT OF TDS AT RS.7,62,809 ONLY WHICH WAS REFLECTED IN FORM NO.26AS AN D FOR THE REST OF THE TDS, THE ASSESSING OFFICER HAS OBSERVED THAT CREDIT CANNOT BE ALLOWED UNLESS THE DEDUCTOR UPLOADS SUCH AMOUNTS ON NSDL AND THE ASSESSEE WAS ASKED TO CONTACT THE DEDUCTOR OF THE TDS TO UPLOAD THE SAME. OUR ATTENTION WAS FURTHER INVITE D TO THE OBSERVATION OF THE ASSESSING OFFICER IN THE LAST PARAGRAPH OF HIS ORDER, IN WHICH HE OBSERVED THAT SCRUTINY PROCEEDINGS/COMPUTATION OF INCOME HAS BEEN DONE THROUGH AST SOFTWARE AND THIS SOFTWARE ALLOWS RECTIFICATION FOR LIMITED TIME. THEREFORE, R ECTIFICATION UNDER SECTION 154 OF THE ACT FOR ALLOWING CREDIT OF TDS FOR A PART OF AMOUNT IN RESPECT OF THE TDS CLAIMED IS NOT JUSTIFIABLE. 5 4. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT TDS WAS DEDUCTED BY THE DEDUCTOR WHILE MAKING PAYMENT A ND THE TDS CERTIFICATE WAS ALSO PROPERLY ISSUED TO THE ASSESSEE. IF THERE IS ANY FAULT IN THE INTERNAL SOFTWARE SYSTEM OF THE DEPARTMENT, THEY SHOULD HAVE MADE CORRECTION THEREIN AND FOR THE FAULT IN THE SOFTWARE SYSTEM OF THE DEPARTMENT THE ASSESSEE SHOU LD NOT BE MADE TO SUFFER. WHATEVER TDS DEDUCTED, THE CREDIT OF THE SAME SHOULD BE GIVEN TO THE ASSESSEE. IT WAS FURTHER CONTENDED THAT THE LD. CIT(A) HAS NOT APPRECIATED ALL THESE ASPECTS AND HAS DISMISSED THE APPEAL OF THE ASSESSEE. 8.1 FROM THE ABOVE PARAS OF THE TRIBUNAL ORDER, IT IS SEEN THAT IT WAS HELD BY THE TRIBUNAL IN THAT CASE THAT THE ASSESSING OFFICER SHOULD EXAMINE THE CLAIM OF THE ASSESSEE REGARDING CLAIM OF TDS AND PAYMENT OF THE SAME BY THE DEDUCTOR AND IF IT IS FOUND THAT ALL ARE IN ORDER, THE TDS CREDIT SHOULD BE ALLOWED TO THE ASSESSEE. IN THE PRESENT CASE ALSO, WE DIRECT THE ASSESSING OFFICER TO DECIDE THE CASE OF THE ASSESSEE ON SAME LINE AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE COMBINED RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 /09/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR