ITO 13(3)(2), MUMBAI V. HANUIMAN BANSAL ( HUF), MUMBAI

ITA 6287/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7623 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 20-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 20-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Assessment record
• Section: 194C; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM & SHRI RAJENDRA , AM ITA NO. 6287/MUM/2010 (ASST YEAR 2005-06) INCOME TAX OFFICER WARD 13(3)(2),MUMBAI. VS M/S. HANUMAN BANSAL(HUF), 84-B,4 TH FLOOR,AMBA BHAVAN, BROACH STREET, MASJID BUNDER MUMBAI 400009. (APPELLANT ) (RESPONDENT) PAN NO. AABHH 5118R ASSESSEE BY SH PANKAJ R TOPRANI REVENUE BY SH V V SHASTRI DT.OF HEARING 20 TH MARCH 2012 DT OF PRONOUNCEMENT 28 TH MARCH 2012 ORDER PER RAJENDRA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED U/S 154 DATED 30.6.2010 OF THE CIT(A) FOR THE AY 2005-06. 2 THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GR OUNDS IN THIS APPEAL: 1.THE LD. CIT (A) ERRED IN LAW AND ON FACTS IN REVISI NG HIS PREDECESSORS ORDER U/S 154 BECAUSE PROVISION OF SECTION 154 WERE NOT APP LICABLE TO THE FACTS OF THIS CASE FOR THE FOLLOWING REASONS :- THE APPELLANT IN ITS ORIGINAL GROUNDS OF APPEAL HERE M ENTIONED THE FACTS WHICH ARE PURPORTED TO BE MISTAKE APPARENT FROM RECORD. THE AMENDED PROVISIONS OF SECTION 194C (3) OF THE A CT WERE NO WHERE A PART OF DELIBERATION IN THE ORIGINAL ORDER OF THE CI T (A DT. 30.07.2009. THEREFORE NO MISTAKE IN THE APPELLATE ORDER DT.30.07.Q 09 THAT COUJD BE RECTIFIED U/S 154. 2 WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE, THE COMMISSIONER OF INCOME TAX ( THE CIT(A) CONFIRMED DISALLOWANCE MADE BY TH E ASSESSING OFFICER U/S. 40(A)(IA) OF THE INCOME-TAX,ACT,1961 (THE ACT) ON 30.07.2009. VIDE APPLICATION DATED 2 05.04.2010 AND 31.05.2010 THE APPELLANT REQUESTED F OR FOLLOWING RECTIFICATION TO THE SAID ORDER OF THE FIRST APPELLATE AUTHORITY(FAA). SN. PARTICULARS AMOUNTS 1.FREIGHT CHARGES PAID FROM 1.4.2004 TO 30.09.2010 10,73,925/- 2. FREIGHT CHARGES PAID FROM 01.10.2004 TO 31.03.20 05 (TOTAL PAYMENTS DO NOT EXCEED RS.50,000/- AS PER TH E AMENDMENT) 1,84,850/- 3.HAMALI CHARGES PAID 2,13,936/- 4.PROFESSIONAL FEES PAID 41,500/- 2. FAA VIDE HIS ORDER DTD.30.06.2010 HELD THAT THER E WAS MISTAKE APPARENT FROM THE FACE OF THE RECORD WITH REGARD TO SN.1 AND 2. THE REVENUE PREFERRED AN APPEAL AGAINST THE SAID RECTIFICATION ORDER. 3. FROM THE ASSESSMENT ORDER AND THE ORDER OF THE C IT (A) DTD.30.07.2009 IT IS FOUND THAT THAT THE ASSESSEE DID NOT DEDUCT TDS AS PER THE PROVISIONS OF THE SECTION 194 C OF THE ACT FOR PAYMENTS MADE TO THE TRANSPORT ERS. AS PER THE AVAILABLE RECORD, AMOUNT PAID TO THE TRANSPORTERS WAS TO THE TUNE OF RS.35.22 LACS. 4. FAA IN HIS ORDER 30.07.2009 IN PARA 3.3(B) AND 3 .3(C) ELABORATELY DISCUSSED THE ISSUE REGARDING APPLICABILITY OF SEC.194 C AS WELL AS THE SCHEME OF CIRCULAR NO.715 DTD.08.08.1995 OF THE CBDT. 5. ARGUING THE MATTER BEFORE US THE AUTHORISED REPR ESENTATIVE (AR) OF THE ASSESSEE STATED THAT PROVISIONS OF SECTION 194 C WE RE APPLICABLE FROM 01.10.2004 AND NOT FROM 01.04.2004 AS HELD BY THE ASSESSING OF FICER AND THE FAA IN HIS ORDER DATED 30.07. 2009. HE ARGUED THAT PAYMENTS MADE PRI OR TO 01.10.2004 WERE NOT COVERED BY THE AMENDMENT. AS PER THE AR, SIMILAR WA S THE POSITION OF THE RESTRICTION ON THE AGGREGATE PAYMENT AMOUNTING TO RS. 50,000/-. AS PER THE AR, NON CONSIDERATION OF PROVISIONS OF THE 194 C WAS A MIST AKE APPARENT FROM THE RECORD 3 AND THAT THE FAA HAD RIGHTLY REVISED THE ORDER DATE D 30.07.2009 U/S. 154 OF THE ACT BY HIS SUBSEQUENT ORDER WHEN MISTAKES WERE BROUGHT TO HIS NOTICE. 6. DEPARTMENTAL REPRESENTATIVE (DR) ON THE OTHER HA ND RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND THE FIRST ORDER OF THE FAA I .E. ORDER DTD.30.07.2009.HE FURTHER ARGUED THAT PROVISIONS OF SECTION 194 C WERE APPLIC ABLE FOR THE ENTIRE ASSESSMENT YEAR AND NOT FOR THE PART OF IT. 7. IN THIS BACKGROUND ISSUES TO BE DECIDED ARE WHET HER THE PROVISIONS OF SEC.194 C OF THE ACT ARE APPLICABLE FROM 01.04.2004 OR FROM 01.10.2004 ? II)IF PROVISIONS OF SECTION 154 WERE APPLICABLE FRO M 01.10.2004 THEN NON CONSIDERATION OF THE SAID PROVISIONS WAS A MISTAKE APPARENT FROM THE RECORD OR NOT. ? 8. AT THE RELEVANT PERIOD SECTION 194 C (3) OF THE ACT READ AS UNDER (3) NO DEDUCTION SHALL BE MADE UNDER SUB-SECTION(1) OR SUB-SECTION (2) FROM-- **(I) THE AMOUNT OF ANY SUM CREDITED OR PAID OR LIKE LY TO BE CREDITED OR PAID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR OR SUB-CONTRACTO R, IF SUCH SUM DOES NOT EXCEED TWENTY THOUSAND RUPEES : **PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE F INANCIAL YEAR EXCEEDS FIFTY THOUSAND RUPEES, THE PERSON RESPONSIBLE FOR PAYING SUC H SUMS REFERRED TO IN SUB-SECTION (1) OR, AS THE CASE MAY BE, SUB-SECTION (2) SHALL BE LIABLE TO DEDUCT INCOME-TAX UNDER THIS SECTION ; OR.... **INSERTED BY F(NO.2) ACT, 2004, WEF. 1-10-2004 . IT LEAVES NO DOUBT THAT PROVISIONS OF SECTION WERE NOT APPLICABLE FOR PAYMENTS MADE DURING THE PERIOD 01.04.2004 TO 30.09.2004.WHE N THE LEGISLATURE CLEARLY INDICATES A PARTICULAR DATE FOR APPLICABILITY OF TH E PROVISIONS OF A SECTION THE DATE CAN NEITHER BE POSTPONED NOR CAN BE PREPONED. SO,THE ARGUMENT ADVANCED BY THE DR HAS TO BE REJECTED. 9. ONCE IT HAS BEEN DECIDED THAT THE PROVISIONS OF SECTION 194 C WERE APPLICABLE FROM 01.10.2004 THE ISSUE TO BE DECIDED REMAINS IS WHETHER NON CONSIDERATION WAS A 4 MISTAKE APPARENT FROM RECORD? HERE, IT WILL BE USEF UL TO LOOK IN THE BACKGROUND OF RECTIFICATION PROVISIONS. CARDINAL PRINCIPLE OF JUR ISPRUDENCE IS THAT MISTAKES SHOULD BE RECTIFIED AS SOON AS POSSIBLE. PROVISIONS OF RECTIF ICATION FIND PLACE IN THE TAX STATUES BECAUSE THEY ARE NOT ONLY BENEFICIAL TO THE REVENUE AND THE ASSESSEE; BUT THEY ARE ALSO IN INTEREST OF JUSTICE. RECTIFICATION PROCEEDI NGS ARE MEANT TO CORRECT SO CALLED FINAL DECISIONS THAT ARE PASSED UNDER A MISTAKEN BELIEF. NOBODY COMMITS MISTAKE DELIBERATELY, BUT THEY JUST OCCUR. SO, AS A COROLLA RY THEY HAVE TO BE RECTIFIED. IT IS A KNOWN LEGAL PREPOSITION THAT THE WORD MISTAKE HAS A TECHNICAL AND LEGAL MEANING ALSO IN ADDITION TO THE COMMON MEANING IT CARRIES. WORD MISTAKE IS NOT RESTRICTED TO ARITHMETICAL MISTAKES ONLY, BUT IT ALSO INCLUDES MI STAKES WHICH HAPPEN ON ACCOUNT OF MISAPPLICATION OF THE LAW OR A WRONG EXPOSITION OF THE LAW OR A FAILURE TO APPLY THE APPROPRIATE LAW. 10 FOR APPLICABILITY OF SECTION 154 OF THE ACT OTHE R ESSENTIAL CONDITION IS THAT MISTAKE SHOULD BE APPARENT. A MISTAKE IS APPARENT O N THE FACE OF THE RECORD WHEN IT IS GLARING, OBVIOUS OR SELF-EVIDENT. SECONDLY, I T SHOULD BE ONE WHICH COULD BE DISCERNED WITH SOME PRECISION AFTER A JUDICIAL PROB E INTO THE ASSESSMENT RECORDS. 11 IF BOTH THE PARAMETERS FOR APPLICATION OF SECTIO N 154 OF THE ACT ARE APPLIED TO FACTS OF CASE UNDER CONSIDERATION IT BECOMES CLEAR THAT THERE WAS A MISTAKE IN THE ORIGINAL ORDER THE FAA I.E. ORDER DATED 30.07.2009 AND MISTAKE WAS APPARENT. WHILE DEALING WITH THE PROVISIONS OF SECTION 194 C OF THE ACT, FAA IN HIS ORDER DATED 30.07. 2009 DID NOT TAKE IN TO CONSIDERATION THE DATE FROM WHICH THEY SAID PROVISIONS BECAME OPERATIVE. THOUGH IN PARA 3.3(B.) OF THE SAI D ORDER THERE IS DISCUSSION ABOUT SCHEME OF SECTION 194 C, YET HE HAS MISSED THE CRUC IAL AND DECIDING FACTOR -THE SECTION WAS NOT APPLICABLE FOR THE PERIOD 01.04.200 4 TO 30.09.2004. BY ADMITTING THE CORRECT LEGAL POSITION VIDE HIS ORDER DATED 30.06.2 010 HE HAS SET THE THINGS RIGHT. 5 OVERLOOKING A STATUTORY PROVISION WAS A MISTAKE APP ARENT FROM RECORD AND HE HAS CORRECTLY RECTIFIED IT. 12 IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON THIS 28 TH , DAY OF MAR 2012 SD/ SD/- ( VIJAY PAL RAO ) JUDICIAL MEMBER ( RAJENDRA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED:28 TH , MAR 2012 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI Z