M/s Meenaxi Building Solutions Pvt Ltd , Bangalore V. The Income Tax Officer Ward-4(1)(4), Bangalore

ITA 685/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4545 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARESH S SHAH
• Keywords: Opportunity of being heard; Additional evidence; Non-deduction of tax; TDS; Set aside
• Section: 40(a)(ia); 192; 13; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO S . 685 & 686 /BANG/2018 ASSESSMENT YEAR S : 2011 - 12 & 2013 - 14 MR. MOHINDER MITTAL, DIRECTOR OF M/S. MEENAXI BUILDING SOLUTIONS PVT. LTD., NO.29, 18 TH MAIN, BSK 2 ND STAGE, PADMANABHA NAGAR, BANGALORE 560 070. PAN: AAFCM 7920H VS. THE INCOME TAX OFFICER, WARD 4(1)(4), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : S HRI PARESH S. SHAH, CA RESPONDENT BY : S HRI K. SANKAR GANESH, JT.CI T(DR)(ITAT), B ENGALURU. DATE OF HEARING : 13 . 0 9 .202 1 DATE OF PRONOUNCEMENT : 27 .0 9 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE ORDER OF THE CIT(APPEALS) DATED 10.3.2016 ON THE FOLLOWING C OMMON GROUNDS, WITH THE ONLY CHANGE IN THE FIGURES, FOR THE ASSESSMENT YEARS 2011-12 & 2013- 14. THE GROUNDS IN ITA NO.685/BANG/2018 ARE AS FOLL OWS :- 1. THE APPELLANT SUBMITS THEY HAVE MAINTAINED THE BOOKS OF ACCOUNTS IN VERIFIABLE MANNER AND ALSO AUDITED U/S 44 AB OF THE INCOME TAX ACT, 1961. ITA NOS.685 & 686/BANG/2018 PAGE 2 OF 6 2. THE APPELLANT SUBMITS THAT THEY HAD FILED THEIR RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 WHICH WAS TR UE, CORRECT AND COMPLETE IN ALL RESPECTS. 3. THE ONLY POINT OF DISPUTE THAT HAS ARISEN IN THE COMMISSIONER OF INCOME TAX (APPEALS)-4 AND THE INCOME TAX OFFICE R, WARD -4(1)(4), BANGALORE THAT IS 'DISALLOWANCE MADE U/S. 40(A)(IA) OF THE INCOME TAX ACT, 1961 TOWARDS NON DEDUCTION OF TDS ON INTEREST PAID TO NBFC'S TO THE TUNE OF RS.1,01,89,671=00. 4. THE COMMISSIONER OF INCOME TAX APPEALS-4, BENGAL URU HAS DISALLOWED THE CLAIMS MADE BY THE APPELLANT AND CON FIRMED THE ASST. ORDER PASSED BY THE ASSESSING OFFICER. 5. THE APPELLANT SUBMITS THAT DURING THE SCRUTINY O F THE ASSESSMENT, THE APPELLANT SUBMITTED CERTAIN INTERES T CERTIFICATES TO THE ASSESSING OFFICER (FORM26A) ISS UED BY THE NBFC'S CHARTERED ACCOUNTANTS IN THE PRESCRIBED FORM- 26A IN LIEU OF NON DEDUCTION OF TDS ON INTEREST PAY MENT MADE BY THE APPELLANT WHICH PROVES BEYOND ANY REASO NABLE DOUBTS THAT THE PAYEE'S INCOME HAS BEEN FULLY CONSIDERED/OFFERED TO INCOME TAX IN THEIR RETURN OF INCOME FILED AND THE TOTAL TAXES ON THE RETURNED INCOME HA S BEEN DISCHARGED BY THEM. BUT THE ASSESSING OFFICER UTTER LY FAILED TO ACCEPT THE SAME AND FAILED TO DISCUSSED THE SAME IN THE ASSESSMENT ORDER. 6. THE APPELLANT IS READY TO SUBMIT BALANCE COPIES OF FORM 26A AT THIS STAGE. IN THIS REGARD, APPELLANT SUBMIT S THAT, THE APPELLANT HAS PUT LOT OF EFFORT FOR GETTING FORM 26 A FROM THE NBFC'S BUT, DUE TO CONSTRAINED/TIME BARRING OF THE SCRUTINY ASSESSMENT, THE SAME COULD NOT BE ABLE TO GET IN TIME. 7. THE APPELLANT FURTHER SUBMITS THAT THEY ARE RELI ED UPON THE FOLLOWING JUDGMENTS VIZ. A) JUDGMENT OF THE HON'BLE INCOME TAX APPELLATE TRI BUNAL, AGRA BENCH, IN THE CASE OF MR. RAJEEV KUMAR AGARWAL V/S. ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-3 ITA NOS.685 & 686/BANG/2018 PAGE 3 OF 6 MATHURA BEARING ITA NO.337/AGRA/A13 DATED 29.05.2013 B) JUDGMENT IN THE CASE OF JITENDRA MANSUKHLAL SHAH V/S. DCIT(ITAT MUMBAI) C) SPECIAL BENCH DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF MERILYIN SHIPPING 136 ITD 23(SB) WHEN THERE ARE CONTRARY DECISIONS OF DIFFERENT HONORABLE HIGH COURTS, THEN THE DECISION WHICH IS IN THE FAVOR OF THE ASSESSEE HAS TO BE FOLLOWED IN THE LIGHT OF THE DEC ISION OF THE HONORABLE SUPREME COURT IN THE CASE OF VEGETABL E PRODUCTS LTD 88 ITR 192 8. THE APPELLANT HUMBLY PRAYS TO SET ASIDE THE APP EAL ORDER PASSED BY CIT APPEALS-4 AS WELL AS THE INCOME TAX O FFICER, WARD 4(1)(4), BANGALORE AND TO ALLOW THE APPEALS IN FAVOR OF APPELLANT. 9. THE APPELLANT HUMBLY PRAYS TO PASS ANY ORDER D EEMED TO BE FIT. 2. THERE IS A DELAY OF 31 DAYS IN FILING BOTH THE A PPEALS BEFORE THE TRIBUNAL. THE DELAY WAS EXPLAINED TO BE THAT THE A SSESSEE HANDED OVER THE ORDER OF THE CIT(APPEALS) TO CA, ONE MR. NAGEND RA J R, PROPRIETOR OF N J RAIRAKHIA & CO., TO FILE THE APPEAL BEFORE THE TR IBUNAL. HE SUDDENLY EXPIRED ON 5.2.2018 AND AS SUCH THERE WAS DELAY OF 31 DAYS IN FILING THESE APPEALS BY THE NEW CA BEFORE THIS TRIBUNAL AND PRAY ED THAT DELAY MAY BE CONDONED. 3. WE HAVE HEARD BOTH THE PARTIES ON THE CONDONATIO N OF DELAY. WE FIND THAT THERE ARE GOOD AND SUFFICIENT REASONS FOR THE DELAY IN FILING THE APPEALS BEFORE THE TRIBUNAL AND IT WAS NOT DUE TO T HE FAULT OF THE ASSESSEE FOR BELATED FILING OF THE APPEALS. ACCORDINGLY, TH E DELAY IN FILING THE APPEALS IS CONDONED AND APPEALS ADMITTED FOR ADJUDICATION. ITA NOS.685 & 686/BANG/2018 PAGE 4 OF 6 4. THE ASSESSEE HAS ALSO FILED THE FOLLOWING ADDITI ONAL GROUNDS OF APPEAL:- 1. THE OVERDUE CHARGES LEVIED BY NON BANKING FINAN CE COMPANIES WERE BY OVERSIGHT CLASSIFIED UNDER THE HE AD 'INTEREST PAYMENTS TO NBFC'S. THE SAID OVER DUE CHARGES ARE N OTHING ELSE BUT BANK CHARGES WHICH WILL NOT FALL UNDER THE AMBI T OF INTEREST PAYMENTS TO NON BANKING FINANCE COMPANIES. THE FOLL OWING ARE DETAILS OF SUCH OVERDUE CHARGES WRONGLY DEBITED TO PROFIT AND LOSS ACCOUNT UNDER THE HEAD OF INTEREST PAID TO NBFC'S I NSTEAD OF BANK CHARGES:- A) RELIGARE FINVEST LTD., B) TATA MOTORS FINANCE LIMITED C) L & T FINANCE LTD D) RELIANCE CAPITAL LTD., RS. 485917.00 RS. 296401.46 RS. 846055.00 RS. 45884.83 RS.1674258.29 THUS, THE ACTUAL INTEREST PAYMENT TO NBFC'S WOULD W ORK OUT TO RS. 6801588.71 AS AGAINST THE ORIGINAL AMOUNT OF RS . 8475847.00 DEBITED TO PROFIT AND LOSS ACCOUNT. THE SUPPORTING DOCUMENTARY EVIDENCE IN THIS REGARD IS ENCLOSED ALONG WITH THIS ADDITIONAL GROUNDS OF APPEAL FOR KIND PERUSAL AND NECESSARY AC TION. 2. THE APPELLANT HUMBLY PRAYS TO CONSIDER THIS ADDI TIONAL GROUNDS OF APPEAL AND PASS ANY ORDER DEEMED TO BE F IT. 5. IT WAS SUBMITTED THAT INADVERTENTLY THE ASSESSEE HAS NOT RAISED THESE GROUNDS ALONG WITH THE ORIGINAL GROUNDS AND P RAYED THAT THE SAME MAY BE ADMITTED. AFTER HEARING BOTH THE PARTIES AN D FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S NATIONAL THERMAL POWER CO. LTD. VS. CIT, 229 ITR 383 (SC) , WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUNDS FOR ADJUDICATION. 6. FURTHER, THE ASSESSEE HAS ALSO FILED ADDITIONAL EVIDENCE BY WAY OF PETITION TO ADMIT THE SAME UNDER RULE 29 OF THE ITA T RULES FOR BOTH THE ASSESSMENT YEARS AS FOLLOWS:- ITA NOS.685 & 686/BANG/2018 PAGE 5 OF 6 DETAILS OF CERTIFICATES RECEIVED FROM NBFCS REGARDI NG NON-DEDUCTION OF TAX ON INTEREST PAYMENT MADE TO ASSESSEE SL.NO. PARTICULARS PARTICULARS PAGE NO. 1 L & T FINANCIAL SERVICES STATEMENT OF OVERDUE CHARGES 1-150 2 RELIGARE FINVEST LTD STATEMENT OF OVERDUE CHARGES 151-216 3 TATA MOTORS FINANCE LTD STATEMENT OF OVERDUE CHARGES 217-228 4 RELIANCE CAPITAL LTD STATEMENT OF OVERDUE CHARGES 229-231 SL. NO. PARTICULARS NO. OF CERTIFI CATES AMOUNT OF CERTIFICATES PAGE NO. 1 TATA MOTORS FINANCE LTD 1 1642553.00 1-3 2 SREI EQUIPMENT FINANCE LTD 2 3026608.00 4-5 3 MAGMA FINCORP LTD 1 406749.00 6-7 4 INDIA BULLS FINANCIAL SERVICE LTD 1 924883.00 8-9 5 RELIANCE CAPITAL LTD 2 1369914.00 10-15 TOTAL 7 7370707.00 SL.NO. PARTICULARS NO.OF CERIFICATES AMOUNT OF CERTIFICATES PAGE NO. 01 RELIGARE FINVEST LTD. 4 3443011.00 1 - 12 02 M AGMA FINECORP LTD. 1 641266.00 13-14 TOTAL 5 4084277.00 7. SINCE THESE ADDITIONAL EVIDENCE ARE VERY IMPORTA NT TO DECIDE THE ISSUE IN DISPUTE, WE ARE INCLINED TO ADMIT THE ADDI TIONAL EVIDENCE FOR ADJUDICATION. ITA NOS.685 & 686/BANG/2018 PAGE 6 OF 6 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE ADDITIONAL GROUNDS AND THE ADDITIO NALL EVIDENCE HAVE BEEN FILED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND TH E LOWER AUTHORITIES HAD NO OCCASION TO EXAMINE THE SAME WHICH GO TO THE ROOT O F THE MATTER. HENCE, IN THE INTEREST OF JUSTICE, WE REMIT THE ENTIRE ISS UES IN DISPUTE TO THE FILE OF THE AO FOR FRESH CONSIDERATION IN THE LIGHT OF THE ADDITIONAL GROUNDS AND ADDITIONAL EVIDENCE RAISED BEFORE THE TRIBUNAL. WH ILE DECIDING THE ISSUE, THE AO SHALL CONSIDER THE JUDGMENT OF THE SUPREME C OURT IN THE CASE OF SHREE CHAUDHARY TRANSPORT CO. V. ITO, IN CIVIL APPE AL NO.7865/2009 DATED 29.7.2020 AND PASS FRESH DECISION IN ACCORDANCE WITH LAW, AF TER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 9. IN THE RESULT, THE APPEALS BY THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPTEMBER, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 27 TH SEPTEMBER, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.