M/s. Dholu KCL JPF(JV) Company, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(3), RAJKOT-GUJARAT

ITA 61/RJT/2014

• Counselvise Citation: 6124914 RSA 2014
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-03-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: DEVINA PATEL
• Section: 139; 143(3); 234B; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 61/RJT/2014 ASSESSMENT YEAR : 2005-06 M/S. DHOLU KCL JPF (JV) COMPANY, KCL, AMIN MARG, 150 FT. RING ROAD, RAJKOT PAN : AAEFD 2105 K ( / APPELLANT) THE INCOME-TAX OFFICER, WARD 1(3), RAJKOT / RESPONDENT / ASSESSEE BY SMT. DEVINA PATEL, AR / REVENUE BY DR. JAYANT B. JHAVERI, DR / DATE OF HEARING 05.03.2014 !'# / DATE OF PRONOUNCEMENT 07.03.2014 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 12.12.2013 OF CIT (A)- II, RAJKOT CONFIRMING FOR THE ASSESSMENT YEAR 2005- 06. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER:- 1. THE HONBLE CIT (A)-II, RAJKOT HAS ERRED IN MAK ING ADDITION OF RS.4,48,830/- BY INVOKING PROVISIONS OF SECTION 40( IA) OF THE IT ACT, 1961 IS UNWARRANTED, UNJUSTIFIED AND BAD IN LAW. 2. THE HONBLE CIT (A)-II, RAJKOT HAS ERRED IN CHAR GING INTEREST U/S 234B & 234C OF THE IT ACT, 1961 IS UNWARRANTED, UNJUSTIFIE D AND BAD IN LAW. 2. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SMT. DEVINA PATEL, AR, APPEARED AND POINTED OUT THAT IN THE ASSESSMENT UND ER U/S 143(3) DATED 03.08.2007 FOR THE AY 2005-06, THE ASSESSING OFFICER DISALLOWE D RS.4,48,830/- BY INVOKING PROVISIONS OF SECTION 40(IA) ON ACCOUNT OF NON-DEDU CTION OF TAX AT SOURCE. IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE DISALL OWANCE. SHE POINTED OUT THAT PROVISO TO SECTION 201(1) INSERTED W.E.F. 01.07.201 2 STATES THAT PAYER SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT FOR NON-DEDUCTI ON OF TDS IF PAYEE: I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139 II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING I NCOME IN SUCH RETURN OF INCOME AND III) HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME 2 61-RJT-2014 DHOLU KCL JPF (JV) COMPANY (SMC) THE AR OF THE ASSESSEE FURTHER POINTED OUT THAT REC ENTLY SPECIAL BENCH OF ITAT RAJKOT BENCH IN THE CASE OF BHARTI AUTO PRODUC TS, (2013) 157 TTJ (RAJKOT) (SB) 1, HELD THAT AFORESAID PROVISO IS APPLICABLE RETROS PECTIVELY. THEREFORE, THIS ADDITION IS TO BE SENT BACK TO THE FILE OF THE ASSESSING OFFIC ER TO ENABLE THE ASSESSEE TO PRODUCE EVIDENCE IN TERMS OF AFORESAID PROVISO. WI TH REGARD TO GROUND NO.2, SHE CONTENDED THAT THE ASSESSING OFFICER BE DIRECTED TO ALLOW CONSEQUENTIAL RELIEF IN LEVY OF INTEREST U/S 234B AND 234C OF THE INCOME-TAX ACT , 1961. 3. THE LD. DR, APPEARED FOR THE REVENUE, COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. AR OF THE ASSESSEE. 4. I HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE WHETHER FIRST PROVISO TO SUB SEC. (6A) OF SECTION 2 06C INSERTED BY FINANCE ACT, 2012 W.E.F. 01.07.2012 IS RETROSPECTIVE OR PROSPECTIVE, CAME BEFORE THE SPECIAL BENCH OF ITAT, RAJKOT IN THE CASE OF BHARTI AUTO PRODUCTS VS . CIT. THIS PROVISO PROVIDES THAT WHERE ANY PERSON [OTHER THAN A PERSON REFERRED IN S UB SECTION (1D)] RESPONSIBLE FOR COLLECTING TAX, FAILS TO COLLECT THE SAME, HE SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF THE BUYER OR LICE NSEE OR LESSEE:- HAS FURNISHED HIS RETURN OF INCOME U/S 139 HAS TAKEN INTO ACCOUNT SUCH AMOUNT FOR COMPUTING I NCOME IN SUCH RETURN OF INCOME AND HAS PAID TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME FURNISHES A CERTIFICATE FROM CA IN FORM NO. 27BA ITAT SPECIAL BENCH, RAJKOT IN ITS DECISION DATED 06 .09.2013, IN THE CASE OF BHARTI AUTO PRODUCTS VS. CIT, REPORTED IN (2013) 92 DTR 34 5, HELD THAT IN VIEW OF THE FACT THAT THE FIRST PROVISO TO SUB-SEC. (6A) OF SEC. 206 C NOT ONLY SEEKS TO RATIONALIZE THE PROVISIONS RELATING TO COLLECTION OF TAX AT SOURCE BUT IS ALSO BENEFICIAL IN NATURE IN THAT IT SEEKS TO PROVIDE RELIEF TO THE COLLECTORS OF TAX AT SOURCE FROM THE CONSEQUENCES FLOWING FROM NON/SHORT COLLECTION OF TAX AT SOURCE AFTER ENSURING THAT THE INTEREST OF THE REVENUE IS WELL PROTECTED, THE SAID PROVISO WOULD A PPLY RETROSPECTIVELY. ADMITTEDLY, THE RATIO OF DECISION OF SPECIAL BENCH OF ITAT RAJK OT IN THE CASE OF BHARTI AUTO 3 61-RJT-2014 DHOLU KCL JPF (JV) COMPANY (SMC) PRODUCTS (SUPRA) HAS NOT CONSIDERED BY THE LD. CIT( A) WHILE PASSING THE IMPUGNED ORDER. I, THEREFORE, SET ASIDE THE IMPUGNED ORDER O F LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO WILL RE-ADJUD ICATE THE ADDITION OF RS.4,48,830/- AFRESH KEEPING IN VIEW OF THE AFORESAID DECISION OF ITAT RAJKOT SPECIAL BENCH IN THE CASE OF BHARTI AUTO PRODUCTS (SUPRA). THE ASSESSEE SHALL ALSO FURNISH NECESSARY DETAILS IN THIS REGARD BEFORE THE ASSESSING OFFICER . 5. THE LEVY OF INTEREST U/S 234B AND 234C OF THE IN COME-TAX ACT IS CONSEQUENTIAL IN NATURE; THEREFORE, THE ASSESSING OFFICER WILL AL LOW CONSEQUENTIAL RELIEF, IF ANY, DUE TO THE ASSESSEE UNDER BOTH THESE SECTIONS. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 07.03.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. DHOLU KCL JPF (JV) COMPANY, KCL, AMIN MARG, RAJKOT 2. / RESPONDENT- THE INCOME-TAX OFFICER, WARD 1(3), RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT-I, RAJKOT 4. * * 2- / CIT(A)-II, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT