Sri Krishna General Trading Company, Ponnuru V. The Income Tax Officer, Ward-1, Eluru

ITA 614/VIZ/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3250 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS
• Section: 263; 143(3); 40(a)(ia); 201; 13

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.614/Viz/2019 (ननधधारण वषा / Assessment Year :2013-14) Sri Krishna General Trading Company, Ponnuru, Guntur Dist. PAN: AAIFS 3783 L Vs. Income Tax Officer, Ward-1, Bapatla. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : None प्रत्यधथी की ओर से / Respondent by : Sri SPG Mudaliar, Sr. AR स ु नवधई की तधरीख / Date of Hearing : 28/04/2022 घोषणध की तधरीख/Date of Pronouncement : 29/04/2022 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal is filed by the assessee against the order of the Ld. CIT(A)-1, Guntur in appeal No.10106/2018-19, dated 8/5/2019 passed U/s. 143(3) r.w.s 263 and U/s. 250(6) of the Act for the AY 2013-14. 2 2. The assessee has raised three grounds in its appeal and they are extracted herein below for reference: “1. Order passed by the Ld. AO U/s. 143(3) r.w.s 263 of the Act is bad in law, invalid, arbitrary and contrary to the provisions of law and facts of the case. It is submitted that the assessment order passed by the Ld. AO be quashed. 2. The Assessing Officer erred in disallowing interest credited to loan creditors, for late submission of declarations in Form 15H, 15G invoking provisions of section 40(a)(ia) of the IT Act, 1961 as per directions of Pr. CIT under section 263 on objections raised by Audit party. The Ld. AO ought not to have concluded, without considering the appellant’s plea. 3. Any other ground may be sought at the time of hearing of appeal.” 3. At the outset, it appears from the order sheet that on various occasions none appeared on behalf of the assessee to represent its case. Even on the date of hearing before us, none appeared on behalf of the assessee to represent the case. It seems that the assessee is not interested in pursuing its appeal. However, considering the nature of issues involved in the appeal, in the interest of justice, we are decided to adjudicate the appeal on merits. 4. There was a delay of 114 days in filing the appeal before the Tribunal and the assessee has filed petition seeking condonation 3 of delay and the contents of the petition are extracted herein below: “....... The appellant had filed Writ Petition in the High court of AP on 8- 7-2019 and orders in respect of writ petition is served on the appellant on 16/10/2019. Appeal is f iled bef ore ITAT on 29/10/2019 within 13 days f rom the date of receipt of the orders from High Court. The appellant had f iled an appeal af ter withdrawing the writ petition. The appellant might have f iled an appeal withou t pursuing petition writ petition either on or bef ore 7/7/2019. The appellant with a bonaf ide belief perused the writ petition instead of f iling the appeal. The time spent on the abortive proceedings may be taken as a reasonable cause in condoning the delay. There is a delay of 114 days due to pursuing aborting proceedings (writ petition in bonaf ide belief ) which is to be excluded f rom computation of limitation as per Section 14 of Limitation Act.” 5. On perusal of the reasons adduced by the assessee for the delay of 114 days in filing the appeal beyond the prescribed time limit, we are of the view that though the explanation given by the assessee cannot be appreciated, taking a lenient view and in the interest of justice, we hereby condone the delay of 114 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits. 6. The brief facts of the case are that the assessee is a firm engaged in the business of trading in pulses. The assessee filed 4 its return of income for the AY 2013-14 on 28/09/2013 declaring total income of Rs. 2,90,660/-. During the scrutiny assessment proceedings, the assessee was called for certain information from the assessee. On perusing and after considering the submissions as well as the documentary evidences furnished by the assessee, the Ld. AO completed the assessment U/s. 143(3) of the Act wherein the Ld. AO made an disallowance of Rs. 1,51,407/-on account of interest payments to the unsecured loan creditors and determined the total income at Rs. 4,42,067/- against the returned income of Rs. 2,90,660/-. Thereafter, the Ld. Pr. CIT invoked the provisions of section 263 of the Act and initiated the proceedings U/s. 263 of the Act treating the order of the Ld.AO is erroneous and prejudicial to the interests of the Revenue. Accordingly, after considering the submissions of the assessee, the Ld. Pr. CIT passed order U/s. 263 of the Act dated 31/1/2018 and directed the Ld. AO to re-do the assessment as per the directions given in his order. Consequently, the Ld. AO giving effect to the order of the Ld. Pr. CIT and following the directions thereof, the Ld. AO passed order U/s. 143(3) r.w.s 263 of the Act on 27/09/2018 and made further addition of Rs.9,83,340/- on account of failure on the part of the assessee to make TDS and therefore the relatable expenditure of Rs. 5 9,83,342/- which is paid to 16 creditors is disallowed and assessed the total income at Rs.14,25,410/-. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A) after considering the submissions of the assessee, he was of the view that the assessee has not brought ion record any evidence regarding advance information from the recipients of the interest regarding filing of Form 15G/15H and the assessee could not provide any information against the decision of the Ld.AO invoking the provisions of section 40(a)(ia) of the Act. Accordingly, athe Ld. CIT (A) dismissed the appeal of the assessee. While dismissing the assessee’s appeal, the Ld. CIT(A) relied upon the decision of the Hon’ble High Court of Rajasthan in the case of Chhogmal and Chiranji Lal & Ors (257 ITR 51). Aggrieved by the order of the Ld. CIT(A), the assessee filed the present appeal before the Tribunal by raising the above mentioned grounds. 7. We have gone through the material available on record and heard the Ld. DR who supported the orders of Ld. Revenue Authorities and the decisions taken by them. On perusal of the orders of the Ld. AO and the Ld. CIT (A), we are of the considered opinion that when a specific query is raised by the Revenue 6 Authorities adhering to the provisions of the Income Tax Act, 1961, the onus is on the assessee to provide / furnish the relevant documentary evidence / submissions in support of its claim. In the present case, it is the finding of the First Appellate Authority (CIT(A)) that the assessee did not bring on record any evidence regarding advance information from the recipients of the interest regarding filing of Form 15G/15H. In such circumstances, the Ld. CIT (A)’s has no other option except to decide the appeal on merits and in accordance with law as per the material available on record. Resultantly, the Ld. CIT (A) dismissed the assessee’s appeal. In our opinion, it is out of place to reproduce the relevant paras from the order of the Ld. CIT(A) which is as under: “The appellant during the course of appellate proceedings states that the order U/s. 263 passed by the Ld. Pr. CIT, Guntur was not challenged before the Hon’ble ITAT. Which means the appellant accepted the f indings given by the Ld. Pr. CIT, Guntur. The AO is duty bound to carry out the directions given by the Ld. Pr. CIT, Guntur. The AO was not given wider power to enquire the matter and to decide. The Ld. Pr. CIT, Guntur has given specif ic direction considering the material f act and the same has been f ollowed by the Ld. AO. In view of the this, it is to be held that there is no error in order passed by the AO. During the appellate proceedings, the appellant stated that once Form 15G and f orm 15H were obtained on 1/4/2013 which is prior to the due date of f iling return disallowance cannot be made. The appellant relied on certain decisions and requested to delete the addition made by the AO. A caref ul consideration has been given to the submissions and the decisions relied upon the appellant. In the case of Narasu’s spinning Mills Hon’ble ITAT, Chennai considered the f act that the recipient of the interest inf ormed the appellant in that case in advance about the filing of 7 form 15H and the same was f iled on 10/04/2011 bef ore the due date f or depositing the amount in the government account. Similarly, the other cases ref erred by the appellant appreciated the f acts of similar nature and granted relief to the appellants. In the present case the appellant has not brought on record any evidence regarding advance inf ormation f rom the recipients of the interest regarding f iling of Form 15G/15H. As on 31/3/2013, the appellant has no information about the taxability or otherwise of the loan creditors in question. Precisely, f or this reason the AO invoked section 40(a)(ia) of the Act. The Hon’ble High Court of Rajasthan in the case of Chhogmal and Chiranji Lal & Ors (257 ITR 51) clearly held that if law provides f or doing a thing in a particular manner, then it has to be done in that manner alone. The relevant part of the decision and the brief f acts are reproduced as under: “I have considered the rival submissions and have perused the record. What is not denied is that the Form 15H was received by the petitioner on 1-4- 1999. The interest was paid to various depositors for amount more than Rs. 2,500 during the financial year 1998-99. No tax was deducted at source until 31-3-1999. Thus, in the financial year 1998-99 though the petitioner firm credited interest to various persons above Rs. 2,500 yet it has not deducted tax at source. The petitioner has not received the Form 15H until the conclusion of financial year 1998-99. In this background, if the argument of the learned counsel for the petitioner is accepted that the form was received on 1-4-1999, and it is only a technical breach then, what would follow is that the deeming clause in section 201 of the Act will become redundant. The provision of law can never be considered to be redundant. Section 201 of the Act is required to be operated against the petitioner. Having not received Form 15H within the financial year 1998-99, he will be deemed to be an assessee in default......... 9. The argument of the learned counsel for the petitioner that having received the form on 1-4-1999, it is only a technical default and, therefore, no order could have been passed against the petitioner shows the casual attitude of the petitioner. The argument cannot be sustained for the simple reason that if law provides for doing a thing in an particular manner, then it has to be done in that manner alone. The petitioner could have deducted the tax at source in the manner provided by the Act. Having violated the law, he has incurred the liability under the Act. Therefore, the argument is not sustainable that the fault was only technical. In vie w of this, having regard to the f acts the grounds raised by the appell ant are hereby dismissed and th e addition made by the AO is confirmed.....” 8. Therefore, considering the above facts and circumstances of the case, we are of the considered opinion that the order passed by the Ld. CIT (A) is fair and reasonable and it does not call for 8 any interference. Accordingly, grounds raised by the assessee are dismissed. 9. In the result, appeal of the assessee is dismissed. Pronounced in the open Court on the 29 th April, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (द ु व्ि ू रु आर.एऱ रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated :29.04.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee – Sri Krishna General Trading Company, 16-4-7, GBC Road, Thotamma Temple, Ponnuru. 2. रधजस्व/The Revenue –Income Tax Officer, Ward-1, 15-8-166, Lakshmi Nilayam, GBC Road, Baptla – 522101. 3. The Principal Commissioner of Income Tax, Guntur. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals)-1, Guntur. 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam