ITO, Chandigarh V. M/s Unistar Books (P) Ltd., Chandigarh

ITA 726/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6846 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 26-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KRISHAN VRIND JAIN
• Keywords: Retrospective amendment
• Section: 201(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 726/CHD/2017 ASSESSMENT YEAR: 2012-13 THE ITO, WARD 4 (3), VS. M/S UNISTAR BOOKS (P) LTD ., CHANDIGARH CHANDIGARH PAN NO. AAACU1874F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MEENAKSHI VOHRA RESPONDENT BY : SH. KRISHAN VRIND JAIN DATE OF HEARING : 05.09.2017 DATE OF PRONOUNCEMENT : 20.09.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2 [HE REINAFTER REFERRED TO AS CIT(A)], CHANDIGARH DATED 14.02.2017. 2. THE REVENUE IS AGGRIEVED AGAINST THE ACTION OF T HE CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 4 4,75,693/- ON ACCOUNT OF NON-DEDUCTION OF TDS AS REQUIRED U/S 194 A OF THE ACT ON 2 PAYMENT OF INTEREST TO NON-BANKING COMPANIES. IN AP PEAL, THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE PAYEE COMPANY HAVE TAKEN INTO ACCOUNT THE INTEREST IN QUESTION AS THEI R INCOME FOR CALCULATING THE TAX LIABILITY AND THAT THERE WAS NO LOSS OF REVENUE TO THE DEPARTMENT IN RESPECT OF THE FAILURE OF THE ASS ESSEE TO DEDUCT TDS ON SUCH PAYMENT. HE IN THIS RESPECT RELIED UP ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS . ANSAL LAND MARK TOWNSHIP (P) LTD. (2015) 61 TAXMAN 45 (DELHI) . 4. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND GOING THROUGH THE EVIDENCES BROUGHT IN THIS RESPECT AND IN THE LIGHT OF THE DECISION OF THE HON'BLE DELHI H IGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER . 5. BEING AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A) , THE REVENUE HAS COME UP IN APPEAL BEFORE US. 6. BEFORE US, LD. AR OF THE ASSESSEE HAS STRONGLY R ELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA) WHEREIN THE HON'BLE DELHI HIGH COURT HAS HELD THAT SECOND PROVISO TO SE CTION 40(A)(IA) OF THE ACT IS DECLARATORY AND CURATIVE AND IT HAS RETR OSPECTIVE EFFECT FROM 1.4.2015. IT IS PERTINENT TO MENTION HERE THA T AS PER THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT, IF THE ASS ESSEE HAS FAILED TO DEDUCT TAX AT SOURCE IN ACCORDANCE WITH THE PROVISI ONS OF CHAPTER XVII B OF THE ACT BUT IS NOT DEEMED TO BE AN ASSESS EE IN DEFAULT UNDER THE FIRST PROVISO TO SUB SECTION (1) OF SECTI ON 201, THEN IT SHALL 3 BE DEEMED THAT THAT THE ASSESSEE HAD DEBITED AND PA ID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RETURN OF INCOME B Y THE RESIDENT PAYEE OF SUCH SUM. FURTHER, AS PER THE FIRST PROV ISO TO SECTION 201(1) OF THE ACT WHERE THE PERSON RESPONSIBLE HAS FAILED TO DEDUCT TDS AS PER THE PROVISIONS OF CHAPTER BUT THE RESIDE NT PAYEE HAS FURNISHED HIS RETURN OF INCOME AND HAS TAKEN INTO A CCOUNT SUCH SUM FOR COMPUTING HIS INCOME AND HAS PAID THE TAX DUE O N INCOME DECLARED BY HIM IN THE RETURN OF INCOME AND FURTHER THAT PERSON FURNISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCO UNTANT IN SUCH FORM AS MAY BE PRESCRIBED, THEN SUCH AN ASSESSEE WILL N OT BE DEEMED TO BE ASSESSEE IN DEFAULT. THE FIRST PROVISO TO SECTION 201 OF THE ACT HAS BEEN INSERTED W.E.F. 1.7.2012 WHEREAS THE SECOND PR OVISO TO SECTION 40(A)(IA) OF THE ACT WAS INSERTED BY FINANCE ACT 20 12 W.E.F. 1.4.2013. THE HON'BLE DELHI HIGH COURT BY ANALYZIN G THE ABOVE PROVISIONS HELD THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT WAS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFECT FROM 1.4.2005, BEING THE DATE FROM WHICH THE SUB CLAUSE (IA) TO SECTION 40(A) BY THE FINANCE (NO.2) ACT 2004 WAS INSERTED. HOWEVER, THE REVENUE HAS RELIED UPON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF PRUDENTIAL LOGISTICS & TRANSPORT VS. ITO 364 ITR 689 WHEREIN THE HON'BLE KERALA HIGH COURT HAS H ELD THAT THE AMENDMENT BROUGHT W.E.F. 1.4.2013 CANNOT COME TO TH E RESCUE OF THE ASSESSEE IN RESPECT OF THE ASSESSMENT FOR THE EARLI ER YEARS. 7. SINCE THERE ARE CONTRARY DECISIONS OF TWO DIFFER ENT HIGH COURTS AVAILABLE BEFORE US AND NO DECISION OF THE JURISDIC TIONAL HIGH COURT IS BROUGHT TO OUR KNOWLEDGE, THEREFORE,, IN VIEW OF THE LAW LAID DOWN 4 BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD (1973) 88 ITR 192 (SC), IF TWO VIEWS A RE AVAILABLE, THE ONE WHICH IS FAVORABLE TO THE ASSESSEE IS TO BE ADO PTED. THE VIEW OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS . ANSAL LAND MARK TOWNSHIP (P) LTD. (SUPRA) IS SINCE FAVORABLE TO THE ASSESSEE HAS TO BE ADOPTED IN THIS CASE WHICH HAS RIGHTLY BE EN ADOPTED BY THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A) AND UPHELD THE SAME. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS HERE BY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.09.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 ST SEPT. 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR