ROUNAK ENTERPRISES, MUMBAI V. ACIT 17(3), MUMBAI

ITA 6154/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83573 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 08-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY R SINGH
• Keywords: Wrong claim
• Section: 139

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./ I.T.A. NO.6154 /MUM/2012 ( / ASSESSMENT YEAR : 2006-2007 M/S ROUNAK ENTERPRISES, 14C, SUNSHISHTI, SAKI VIHAR ROAD, POWAI, MUMBAI 400 072. / VS. A.C.I.T. RANGE 17( 3 ), MUMBAI. ./ PAN : AAEFR0209E ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI AJAY R. SINGH R E SPONDENT BY : SHRI DURGA DUTT / DATE OF HEARING : 17-06-2014 / DATE OF PRONOUNCEMENT : 20-08-2014 [ / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : %, THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF LD. CIT(A) 29, MUMBAI DATED 25-07-2012 AGI TATING THE CONFIRMATION OF LEVY OF PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) O F THE ACT AMOUNTING TO RS. 11,45,853/- OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF DISALLOWANCE OF LABOUR CHARGES U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961. 2. THE A.O. OBSERVED THAT THE ASSESSEE HAD DEPOSITE D THE TAX DEDUCTED AT SOURCES (TDS) AFTER THE DUE DATE. HE THEREFORE HEL D THAT THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS NOT ALLOWABLE DUE TO LA TE DEPOSIT OF TDS AND ACCORDINGLY DISALLOWED THE SAME. HE ALSO IMPOSED P ENALTY U/S 271(1)(C) OF ITA 6154/M/12 2 THE ACT HOLDING THAT THE ASSESSEE HAD MADE A WRONG CLAIM OF EXPENDITURE WHICH WAS NOT ALLOWABLE U/S 40(A)(IA) OF THE ACT DU E TO LATE DEPOSIT OF TDS, HENCE IT AMOUNTED TO FURNISHING OF INACCURATE PARTI CULARS OF ITS INCOME. THE LD. CIT(A) CONFIRMED THE PENALTY IMPOSED BY THE A.O . U/S 271(1)(C) OF THE ACT AND HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS OF LD. REPRESENTATIV ES OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE WI TH US. ADMITTEDLY, IN THE CASE IN HAND IT REVEALS THAT THE ASSESSEE THOUGH HA D NOT DEPOSITED THE TDS BEFORE THE DUE DATE AS WAS PRESCRIBED U/S 40(A)(IA) OF THE ACT, HOWEVER, HE HAD DEPOSITED THE TDS BEFORE THE DUE DATE OF FILING OF RETURN. ADMITTEDLY, THE SECTION 40(A)(IA) OF THE ACT HAS BEEN AMENDED BY TH E FINANCE ACT, (2010) TO THE EFFECT THAT THE DUE DATE FOR DEPOSIT OF TAX WIL L BE THE DUE DATE AS PRESCRIBED IN SUB SECTION (1) OF SECTION 139 OF THE ACT I.E DUE DATE FOR FILING OF RETURN OF INCOME. THE LD. AUTHORISED REPRESENTATIV E (AR) OF THE ASSESSEE HAS INVITED OUR ATTENTION TO THE DECISION OF THE HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. NARESH KUMAR (2013) 262 CTR (DEL) 3 89 WHEREIN THE HONBLE DELHI HIGH COURT HAS HELD THAT THE AMENDMENT MADE T O SECTION 40(A)(IA) OF THE ACT VIDE FINANCE ACT 2010 WHICH STATES THAT THE DUE DATE OF DEPOSIT OF TDS WILL BE THE DATE OF FILING OF RETURN U/S 139(1) IS APPLICABLE RETROSPECTIVELY. WHILE HOLDING SO, THE HONBLE DELHI HIGH COURT HAS RELIED UPON ANOTHER DECISION IN THE CASE OF CIT VS. RAJINDER KUMAR (ITA NO. 65/2013) AND FURTHER IN THE CASE OF CIT VS. JAGANNATH STEEL CORPORATION TO HOLD THAT THE WHERE THE STATUTE IS CURATIVE OR MERELY DECLARATORY OF PREVIO US LAW, RETROSPECTIVE OPERATION IS GENERALLY INTENDED. IN VIEW OF THE AB OVE DECISION OF THE HONBLE DELHI HIGH COURT AND IN THE ABSENCE OF ANY DECISION TO THE CONTRARY OF OUR HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY, IT IS TO BE HELD THAT THE AMENDMENT TO SECTION 40(A)(IA) OF THE ACT MADE VIDE FINANCE ACT, 2010 IS APPLICABLE RETROSPECTIVELY AND IT CANNOT BE SAID TO BE A CASE OF VIOLATION OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. EVEN O THERWISE, THE A.O. HAS ITA 6154/M/12 3 DISALLOWED THE CLAIM OF THE ASSESSEE BECAUSE OF LAT E DEPOSIT OF TDS, IT CANNOT BE SAID TO BE A CASE OF FURNISHING OF INACCURATE PA RTICULARS OF ITS INCOME OR CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. MERELY BECAUSE THE CLAIM OF THE ASSESSEE HAS BEEN DISALLOWED THAT ITSELF CAN NOT BE SAID TO BE A CASE OF CONCEALMENT OF PARTICULARS OF ITS INCOME. UNDER SU CH CIRCUMSTANCES, THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IS O THERWISE NOT SUSTAINABLE IN LAW. IN VIEW OF OUR ABOVE OBSERVATION, THE PENALTY SO IMPOSED BY THE A.O. IS ORDERED TO BE DELETED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-08 -2014. ' ) * 20-08-2014 - SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; * DATED 20:08:2014 [ .>../ RK , SR. PS # $&' (' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ? () / THE CIT(A) 29,, MUMBAI 4. ? / CIT 17, MUMBAI 5. B >>D , D , / DR, ITAT, MUMBAI D BENCH 6. % / GUARD FILE. / BY ORDER, B > //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI