Yunusbhai Mohamad Bhaiya, RAJKOT-GUJARAT V. The Asstt. Commr. Income Tax, Circle-5, RAJKOT-GUJARAT

ITA 670/RJT/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3311 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Keywords: TDS
• Section: 143(3); 40(a)(ia); 194C; 201; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO . 670 /RJT /2014 / ASSTT. YEAR : 2007 - 20 08 YUNUSBHAI M. BHAIYA , 7 - PATEL NAGAR , 80 FEET ROAD , RAJKOT . PAN: AFPPB6979P VS . A.C.I.T , CIRCLE - 5 , RAJKOT . (APPLICANT) (RESPON D ENT) ASSESSEE BY : SHRI D.M. RINDANI , A.R REVENUE BY : SHRI PRAVEEN VERMA , SR .D R / DATE OF HEARING : 04 / 09 / 201 9 / DATE OF PRONOUNCEMENT: 28 / 11 /201 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, RAJKOT DATED 19/09/2014 ( IN SHORT LD.CIT(A) ) ARISING IN THE MATTER OF A SSESSMENT ORDER PASSED UNDER S. 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DT. 23/03/2013 RELE VANT TO THE ASSESSMENT YEAR 2007 - 2008 . ITA NO.670/RJT/2014 ASSTT. YEAR 2007 - 08 2 T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1) THE LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING THE ORDER PASSED BY ASSESSING OFFICER U/S.147 R.W. 148 THOUGH ALL DETAILS WERE FURNISHED U/S. 143(3) OF I.T.ACT.THE REOPENING U/S.147 R.W.S. 148 IS BAD IN LAW. 2) THE LEARNED C.I.T. (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY ASSESSING OFFICER THOUGH THE PROVISION OF SEC.!94C(L) & (2) ARE NOT A PPLICABLE TO THE INDIVIDUAL ASSESSEE. 3) THE LEARNED C.I.T. (A) HAS ERRED IN CONSIDERING THE PAYMENT OF FREIGHT EXPENSES MADE TO TRANSPORTERS AS PAYMENT TO SUBCONTRACTOR WHICH IS BAD ON FACTS AND ALSO IN LAW. 4) THE LEARNED C.IT.(A) HAS ERRED IN CONFIRMING RS . 7091762/ - U/S.40(A)(IA) THOUGH SECTION 40(A)(IA) IS NOT APPLICABLE AS TAX IS NOT DEDUCTABLE U/S. 194C OF I.T. ACT,1961. 5) THE LEARNED C.I.T. (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF TRUCK FREIGHT EXPENSES AT RS. 7091763 U/S. 40(A)(IA) THOUGH TH E PETITIONER HAS FILED PRESCRIBED FORM NO. 151 WHICH IS BAD ON FACTS AND ALSO IN LAW. 6) THE .LEARNED C.I.T. (A) HAS WITHOUT APPRECIATION THE FACTS AND PROVISIONS OF THE ACT CONFIRMED RS.7091762/ - WHICH IS UNWARRANTED, YOUR PETITIONER CRAVE LEAVE TO ADD, AMEND, ALTER, VARY OR WITHDRAW ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. AT THE OUTSET THE LEARNED AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT HE HAS BEEN INSTRUCTED NOT TO PRESS GROUND NO. 1 CHALLENGING THE VALIDIT Y OF THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT. ACCORDINGLY WE DISMISS THE SAME AS NOT PRESSED. 3. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN THE REMAINING GROUND OF APPEAL IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOW ANCE OF FREIGHT EXPENSES AMOUNTING TO 70 , 91 , 763 .00 ON ACCOUNT OF NON - DEDUCT ION OF TDS UNDER SECTION 40(A)(IA) R.W.S 19 4C OF THE ACT. ITA NO.670/RJT/2014 ASSTT. YEAR 2007 - 08 3 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRANSPORT BROKER AND CONTACTOR. THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE WAS LIABLE TO DEDUCT T HE TDS UNDER SECTION 19 4C OF THE ACT AT THE RATE OF 1% ON THE TRUCK FREIGHT CHARGES. BUT THE ASSESSEE FAILED TO DO SO. ACCORDINGLY, A CLARIFICA TION WAS SOUGHT FROM THE ASSESSEE FOR NOT DEDUCTING THE TDS. BUT THE ASSESSEE HAS MADE A GENERAL REPLY WHICH WAS NOT SUBSTANTIATED BASED ON DOCUMENTARY EVIDENCE. ACCORDINGLY THE AO DISALLOWED THE SUM OF 70 , 91 , 763 .00 ON ACCOUNT OF NON - DEDUCTION OF TDS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 5. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HAS COLLECTED DECLARATION FROM THE TRANSPORTERS/TRUCK OWNERS IN THE FORM 15 - I AND THEREFORE HE WAS NOT LIABLE TO COMPL Y THE PROVISIONS OF SECTION 19 4C OF THE ACT. 6. HOWEVER, TH E LD. C IT - A FOUND THAT THE ASSESSEE AFTER COLLECTING THE FORMS IN 15 - I HAS N OT FILED THE DETAILS OF THE TRANSPORTERS/TRUCK OWNERS TO THE COMMISSIONER OF INCOME T AX HAVING JURISDICTION OVER THE ASSESSEE IN THE PRESCRIBED FORM I.E. 15 - J WITHIN THE PRESCRIBED TIME. ACCORDINGLY, THE LEARNED CIT (A) CONFIRMED THE ORDER OF THE AO. BEI NG AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.670/RJT/2014 ASSTT. YEAR 2007 - 08 4 7. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 50 AND SUBMITTED THAT THE ASSESSEE HAS COLLECTED FORM 15 - I FROM THE TRANSPORT OWNERS IN THE CASE S WHERE THE PAYMENT WAS EXCEEDING 50,000 IN AGGREGATE. 7.1 THE LEARNED AR IN SUPPORT OF HIS CLAIM DREW OUR ATTENTION ON THE LIST OF TRUCK NUMBER, NAME AND THE AMOUNT OF TRUCK FREIGHT ALONG WITH THE DETAILS OF THE FORM 15 - I WHICH IS PLACED ON PAGES 12 TO 24 OF THE PAPER BOOK. ACCORDINGLY THE LEARNED AR FOR THE ASSESSEE CLAIMED THAT THE ASSESSEE IS NOT LIABLE TO D EDUCT THE TDS UNDER SECTION 19 4 C OF THE ACT. 8. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD . F ROM THE PRECEDING DISCUSSION WE NOTE THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS RECEIVED FORM 15 - I FROM THE PARTIES WHERE THE PAYMENT WAS EXCEEDING 50,000 IN AGGREGATE. HOWEVER, THE ASSESSEE , ADMITTEDLY , FAILED TO FILE THE DETAILS OF SUCH FORMS TO THE LD. C OMMISSION ER OF I NCOME T AX IN THE PRESCRIBED FORM I.E. 15 - J WITHIN THE PRESCRIBED TIME. HOWEVER WE FIND THAT THE HON BLE COURTS HAVE HELD THAT THE REQUIREMENT OF FILING THE FORM 15 J IS A PROCEDURAL REQUIREMENT AND IN CASE OF ANY LAPSE ON THE PART OF THE ASSESSEE IN FILING SUCH FORM, THE DISALLOWANCES C ANNOT BE MADE UNDER SECTION 19 4 C READ WITH SECTION 40(A)(IA) ON ACCOUNT OF NON - DEDUCTION OF TDS. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDG MENT OF HON BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VERSUS SRI MARIKAMBA TRANSPORT CO. REPORTED IN 379 ITR 129 WHEREIN IT WAS HELD AS UNDER: ITA NO.670/RJT/2014 ASSTT. YEAR 2007 - 08 5 THIS MATTER WAS EXTENSIVELY CONSIDERED BY THE IT AT, AHMEDABAD BENCH IN VALIBHAI KHANBAI MANKAD V. DY. CIT (OSD) [2011] 46 SOT 469/12 TAXMANN.COM 160 AND THE SAID JUDGMENT HAS BEEN UPHELD BY THE HIGH COURT OF GUJARAT IN CIT V. VALIBHAI KHANBHAI MANKAD [2013] 216 TAXMAN 18/28 TAXMANN.COM 119 WHEREIN IT IS HELD THAT ONCE THE CONDITIONS OF SECTION 194C(3) WERE SATISFIED, THE LIABILITY OF THE PAYEE TO DEDUCT TAX AT SOURCE WOULD CEASE AND ACCORDINGLY, APPLICATION OF SECTION 40(A)(IA) WOULD ALSO NOT ARISE. IT IS ACCORDINGLY HELD THAT FILING OF FORM NO. 15 - I/J IS ONLY DIRECTORY AND NOT MANDATORY. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THERE CANNOT BE ANY DISALLOWANC E UNDER SECTION 19 4 C READ WITH SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF NON - DEDUCTION OF TDS IN THE EVENT THE ASSESSEE HAS COLLECTED THE REQUISITE DETAILS IN FORM 15 - I FROM THE TRUCK OWNERS/ TRANSPORTERS . ACCORDINGLY, WE REVERSE THE ORDER OF THE AUTHORITIES BELOW AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 28 /11 / 2019 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 28 / 11 /2019 MANISH