Smt. Meenoo Puri, New Delhi V. ITO, New Delhi

ITA 6088/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6592 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 10-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Retrospective amendment
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: B : NEW DELHI BEFORE SHRI R.S. SYAL, AM & SHRI A.T. VARKEY, JM ITA NO.6088/DEL/2015 ASSESSMENT YEAR : 2012-13 MEENOO PURI, M/S ATUL PURI & COMPANY, 121, FIRST FLOOR, SHANKAR ROAD MARKET, NEW RAJINDER NAGAR, NEW DELHI. PAN: AAAPP2448M VS. ITO, WARD-50(1), NEW DELHI. ASSESSEE BY : SHRI ATUL PURI, CA DEPTT. BY : SHRI SAMEER SHARMA, SR. DR DATE OF HEARING : 01.03.2016 DATE OF PRONOUNCEMENT : 01.03.2016 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 4.9.2015 IN RELATION TO THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF ADDITION OF RS.3,94,750/- MADE BY T HE AO U/S ITA NO.6088/DEL/2015 2 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE A SSESSEE DEBITED A SUM OF RS.3,94,750/- TO ITS PROFIT & LOSS ACCOUNT UNDER THE HEAD JOB WORK CHARGES. THE AO OPINED TH AT THE PROVISIONS OF SECTION 194C WERE ATTRACTED ON SUCH P AYMENTS. IN THE ABSENCE OF THE ASSESSEE HAVING DEDUCTED ANY TAX AT SOURCE ON SUCH PAYMENTS, THE AO MADE DISALLOWANCE O F THE EQUAL AMOUNT U/S 40(A)(IA) OF THE ACT. THE LD. CIT (A) DIRECTED THE AO TO RESTRICT THE DISALLOWANCE AS PER LIMIT PR ESCRIBED IN THE ACT, THEREBY PARTLY ALLOWING THE APPEAL. THE AS SESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL. THE ONLY ISSUE IS ABOUT THE ATTR ACTABILITY OR OTHERWISE OF THE PROVISIONS OF SECTION 40(A)(IA) IN RELATION TO JOB WORK CHARGES PAID BY THE ASSESSEE WITHOUT DED UCTION OF TAX AT SOURCE. THE ASSESSEE CONTENDED BEFORE THE A UTHORITIES ITA NO.6088/DEL/2015 3 BELOW THAT THE DEDUCTEES INCLUDED SUCH SUM RECEIVED FROM THE ASSESSEE IN THEIR RESPECTIVE INCOME. THE ASSESSEE ALSO RELIED ON INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) BY THE FINANCE ACT, 2013 W.E.F. 1.4.2013. THE LD. CIT(A) REFUSED TO TAKE COGNIZANCE OF THE SAME ON THE PREMISE THAT THI S PROVISO WAS INSERTED W.E.F. 1.4.2013. 5. WE FIND THAT THE LEGISLATURE HAS INSERTED PRO VISO TO SECTION 201(1) BY THE FINANCE ACT, 2012 GIVING RECOGNITION TO THE PRINCIPLE LAID DOWN BY THE HONBLE SUMMIT COURT IN HINDUSTAN COCA COLA BEVERAGE (P) LTD. VS. CIT (2007) 293 ITR 226 (SC) . THIS PROVISO STIPULATES THAT THAT ANY PERSON WHO FA ILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID/CREDITED TO A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN D EFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT (I) HAS FURN ISHED HIS RETURN OF INCOME UNDER SECTION 139; (II) HAS TAKE N INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETUR N OF ITA NO.6088/DEL/2015 4 INCOME; AND (III) HAS PAID THE TAX DUE ON THE INC OME DECLARED BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FUR NISHES A CERTIFICATE TO THIS EFFECT. 6. IN SO FAR AS THE VIEW POINT OF THE LD. CIT(A) AB OUT THE PROSPECTIVE OPERATION OF THIS PROVISION IS CONCERNE D, WE FIND THAT THE SAME IS AT VARIANCE WITH THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. ANSAL LANDMARK TOWNSHIP PVT. LTD. (2015) 279 CTR (DEL) 384 , IN WHICH IT HAS BEEN HELD THAT SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARA TORY AND CURATIVE IN NATURE AND HAS RETROSPECTIVE EFFECT FRO M 1 ST APRIL, 2005. ONCE THIS PROVISO IS HELD TO BE RETROSPECTIV ELY APPLICABLE COVERING THE YEAR UNDER CONSIDERATION, T HE ONLY FACT WHICH REMAINS TO BE DETERMINED IS ABOUT THE FULFILL MENT OR OTHERWISE OF THE CONDITIONS LAID DOWN FOR THE APPLI CABILITY OF THIS PROVISO AS DISCUSSED ABOVE. SETTING ASIDE THE IMPUGNED ORDER ON THIS SCORE, WE REMIT THE MATTER TO THE FIL E OF AO FOR VERIFYING THE CONTENTION OF THE ASSESSEE ABOUT THE INCLUSION OF ITA NO.6088/DEL/2015 5 RS.3,94,750/- BY THE PAYEES IN THEIR RESPECTIVE INC OME AND THEN DECIDING THE ISSUE IN THE LIGHT OF THE LEGAL P OSITION DISCUSSED ABOVE. NEEDLESS TO SAY, THE ASSESSEE WIL L BE ALLOWED A REASONABLE OPPORTUNITY OF BEING HEARD IN SUCH PRO CEEDINGS. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.03.2016. SD/- SD/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 01 ST MARCH, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.