N.Nageswara Rao, Vijayawada V. The Addl.CIT, Vijayawada

ITA 656/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0999 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SETHI

Judgement Text

ITA NO.656/VIZAG/2014 N. NAGESWARA RAO, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.656/VIZAG/2014 ( / ASSESSMENT YEAR: 2011-12) N. NAGESWARA RAO, VIJAYAWADA VS. ADDL. CIT, RANGE - 1, VIJAYAWADA [PAN: ACIPN 2489D ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 14.06.2016 / DATE OF PRONOUNCEMENT : 22.07.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VIJAYAWADA DATED 28.11.2014 FOR THE ASSESSM ENT YEAR 2011-12. ITA NO.656/VIZAG/2014 N. NAGESWARA RAO, VIJAYAWADA 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A TRANSP ORT CONTRACTOR AND FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME O F ` 2,84,70,880/-. IN THE ASSESSMENT ORDER, THE A.O. HAS DISALLOWED AN AM OUNT OF ` 19,24,933/- U/S 40(A)(IA) OF THE ACT FOR FAILURE TO DEDUCT TDS ON SUCH PAYMENTS. ON BEING AGGRIEVED, ASSESSEE CARRIED MAT TER IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) CONFIRMED THE ORDER OF THE A.O. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE ORDER OF THE COORDINATE BENCH O F THIS TRIBUNAL IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS, VISAKHAP ATNAM DATED 22.7.2015. 4. ON THE OTHER HAND, THE LD. D.R. HAS SUPPORTED TH E ORDER PASSED BY THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT THE VERY SAME ISSUE HAS BEEN CONSIDERED B Y THE COORDINATE BENCH OF THIS TRIBUNAL AND RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: ITA NO.656/VIZAG/2014 N. NAGESWARA RAO, VIJAYAWADA 3 5. AT THE TIME OF HEARING, LD. COUNSEL SUBMITTED T HAT SUBSEQUENT TO THE FIRST INTERIM ORDER PASSED BY THE HONBLE HIGH COURT, VIDE ANOTHER ORDER DATED 24.6.2015 THE HONBLE A.P. HIGH COURT H AD AN OCCASION TO CONSIDER THIS PARTICULAR ISSUE IN THE CASE OF M/S. JANAPRIYA ENGINEERING SYNDICATE WHEREIN THE COURT OBSERVED AS UNDER:- WE ARE OF THE VIEW THAT UNTIL AND UNLESS THE DECI SION OF THE SPECIAL BENCH IS UPSET BY THIS COURT, IT BINDS SMALLER BENCH AND COORDINATE BENCH OF THE TRIBUNAL. UNDER THE CI RCUMSTANCES, IT IS NOT OPEN TO THE TRIBUNAL, AS RIGHTLY CONTENDE D BY MR. NARASIMHA SARMA, LEARNED COUNSEL, TO REMAND ON THE GROUND OF PENDENCY ON THE SAME ISSUE BEFORE THIS COURT, OVERL OOKING AND OVERRULING, BY NECESSARY IMPLICATION, THE DECISION OF THE SPECIAL BENCH. WE SIMPLY SAY THAT IT IS NOT PERMISSIBLE UN DER QUASI JUDICIAL DISCIPLINE. UNDER THE CIRCUMSTANCES, WE S ET ASIDE THE IMPUGNED JUDGEMENT AND ORDER, AND RESTORE THE MATTE R TO THE FILE OF THE TRIBUNAL WHICH WILL DECIDE THE ISSUE IN ACCO RDANCE WITH LAW AND IT WOULD BE OPEN TO THE TRIBUNAL EITHER TO FOLL OW THE SPECIAL BENCH DECISION OR NOT TO FOLLOW. IF THE SPECIAL BEN CH DECISION IS NOT FOLLOWED, OBVIOUSLY REMEDY LIES ELSEWHERE. 6. THE LD. COUNSEL THEREFORE SUBMITTED THAT THE DEC ISION OF THE SPECIAL BENCH IS BINDING ON THE DIVISION BENCH OF V IZAG UNLESS THE SPECIAL BENCH ORDER IS UPSET BY THE JURISDICTIONAL HIGH COU RT. HE ALSO SUBMITTED THAT AN IDENTICAL VIEW WAS TAKEN BY THE HONBLE ALL AHABAD HIGH COURT IN THE CASE OF VECTOR SHIPPING SERVICES AND THE SAME W AS CONFIRMED BY THE APEX COURT BY NOT ADMITTING THE SPECIAL LEAVE PETIT ION AND THUS THE VIEW TAKEN BY THE SPECIAL BENCH CAN ATLEAST BE SAID TO B E ONE POSSIBLE VIEW ON THE MATTER IN WHICH EVENT A VIEW WHICH IS IN FAVOUR OF THE ASSESSEE SHOULD BE TAKEN. THE LD. COUNSEL EMPHASISED MORE ON THE FACT THAT THE HONBLE A.P. HIGH COURT, IN THE CASE OF JANAPRIYA ENGINEERI NG SYNDICATE, OBSERVED THAT UNTIL THE DECISION OF THE SPECIAL BENCH IS UPS ET BY THE HONBLE A.P. HIGH COURT, IT BINDS SMALLER BENCHES AND COORDINATE BENCHES OF THE TRIBUNAL. SINCE THE HONBLE JURISDICTIONAL HIGH CO URT HAS NOT TAKEN ANY ADVERSE VIEW ON THIS MATTER, THE DECISION OF THE SP ECIAL BENCH, RENDERED FROM VISAKHAPATNAM, IS BINDING ON THE VISAKHAPATNAM BENCH. HE SUBMITTED THAT THOUGH IN GROUND NO.3 THE ASSESSEE C ONTENDS THAT THE ENTIRE PROCLAINE HIRE CHARGES AND CRANE HIRE CHARGE S ARE ALLOWABLE AS DEDUCTION BUT AS PER THE DECISION OF THE SPECIAL BE NCH, THE ASSESSEE IS ENTITLED TO THE BENEFIT TO THE EXTENT OF PAYMENTS A CTUALLY MADE BEFORE 31 ST MARCH. IT WAS SUBMITTED THAT IN THE INSTANT CASE, THE DISALLOWANCE CAN BE RESTRICTED TO RS.3,70,000/- (PROCLAINE HIRE CHARGES ) RS.32,000/- (CRANE HIRE CHARGES). ITA NO.656/VIZAG/2014 N. NAGESWARA RAO, VIJAYAWADA 4 7. LD. D.R. ON THE OTHER HAND STRONGLY RELIED UPON THE ORDERS PASSED BY THE TAX AUTHORITIES. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH VISAKHAPATNAM AND ALSO IN THE LIGHT OF THE VIEW EXP RESSED BY THE HONBLE A.P. HIGH COURT IN THE CASE OF JANAPRIYA ENGINEERIN G SYNDICATE, WE ARE OF THE OPINION THAT THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT CANNOT BE MADE APPLICABLE IN RESPECT OF THE AMOUNTS ALREADY P AID BEFORE 31 ST MARCH. IN OTHER WORDS, THE A.O. IS DIRECTED TO RESTRICT THE DISALLOWANCE TO THE AMOUNTS PAYABLE AFTER 31 ST MARCH. WITH THESE OBSERVATIONS, GROUND NO.3 OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. 6. RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINA TE BENCH OF THE TRIBUNAL, WE SET ASIDE THE ORDER PASSED BY THE LD. COMMISSIONER AND DIRECT THE A.O. TO EXAMINE WHETHER THE DISPUTED AMO UNTS ARE ALREADY PAID ON OR BEFORE 31 ST MARCH, 2010. IF THE ASSESSEE HAS PAID ALL THE AMOUNTS ON OR BEFORE 31 ST MARCH, 2010, IN VIEW OF THE DECISION OF COORDINATE BENCH IN THE CASE OF MUKUNDARA ENGINEERS & CONTRACTORS (SUPRA), THE A.O. IS DIRECTED TO DELETE THE ADDITIO NS ON ACCOUNT OF NON-DEDUCTION OF TDS. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 ND JUL16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 22.07.2016 VG/SPS ITA NO.656/VIZAG/2014 N. NAGESWARA RAO, VIJAYAWADA 5 '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT N. NAGESWARA RAO, PROP: SOUTH IND IA FREIGHT CARRIERS, D.NO.9-66-42, ALLADIVARI STREET, KOTHAPET, VIJAYAWA DA 2. / THE RESPONDENT ADDL. CIT, RANGE-1, VIJAYAWADA 3. ) / THE CIT, VIJAYAWADA 4. ) ( ) / THE CIT(A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM