Pune Zilha Madhyawarti Sahakari Bank Sevakanchi Sahakari Patsanstha Maryadit, Pune V. Assistant Commissioner of Income-Tax, Circle -4, Pune

ITA 742/PUN/2022

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The case involves Pune Zilha Madhyawarti Sahakari Bank Sevakanchi Sahakari Patsanstha Maryadit, the appellant, contesting a disallowance of Rs. 32,355 on printing expenses under Section 40(a)(ia) of the Income Tax Act, 1961, due to non-deduction of tax under Section 194C. The appellant argued that the expenditure was outside the purview of Section 194C and that even if the disallowance was valid, the net taxable income would be NIL due to deductions under Section 80P(2)(a)(i) and Section 80P(2)(c)(ii). The Tribunal agreed with the appellant, citing the eligibility for Section 80P deductions and the CBDT circular that such disallowances enhance the regular business profits eligible for deduction under Chapter VI-A.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137523 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40(a)(ia); 194C; 80P; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No.742/PUN/2022 निर्धारण वषा / Assessment Year : 2006-07 Pune Zilha Madhyawarti Sahakari Bank Sevakanchi Sahakari Patsanstha Maryadit 92, Shukrawar Path, Ranjan Co- op. Housing Society, Behind Mandai Ganpati, Pune – 411002 PAN : AAATP6962E Vs. ACIT, Circle 4, Pune Appellant Respondent आदेश / ORDER PER S.S. GODARA, JM : This assessee‟s appeal for AY 2006-07 arises against the National Faceless Appeal Centre (NFAC), Delhi‟s order dated 30-08-2022, passed in case No.ITBA/NFAC/S/250/2022- 23/1045025540(1), in proceedings under Section 250 of the Income Tax Act, 1961, in short „the Act‟. Heard both the parties. Case file perused. Assessee by Shri D.V. Kotwal Revenue by Shri M.G. Jasnani Date of hearing 13-01-2023 Date of pronouncement 20-01-2023 ITA No.742/PUN/2022 2 2. The assessee raises the following substantive grounds in the instant appeal: 1) On the facts & circumstances of the case & in law the Hon'ble CIT Appeal has grossly erred in making a disallowance of Rs.32,355 /- out of printing expenses U/s 40(a)(ia) of the Income Tax Act, 1961 on the ground of non deduction of tax U/s 194C of the Income Tax Act, 1961. While doing so the Hon'ble CIT Appeal has lost site of the well settled law that the said expenditure is outside the scope purview and ambit of the provisions of Section 194C of the Income Tax Act 1961. The afforced disallowance being patently illegal & bad law the same may please deleted. 2) Without prejudice to ground of appeal no. 1 above & by way of an alternate submission, the appellant submits that presuming but not admitting that the disallowance of Rs.32,355 /- made by the Learned Assessing Officer U/s 40(a)(ia) of the Income Tax Act, 1961 are valid & proper even then the consequential enhancement of income of the appellant. To the extent of disallowances shall qualify for deduction U/s 80P(2)(a)(i) of the Income Tax Act, 1961. It may please be held that even if the disallowances made by the Hon'ble CIT Appeal are confirmed the net taxable income of the appellant would be NIL. 3) Without prejudice to ground of appeal no. 1 above & by way of an alternate submission, the appellant submits that presuming but not admitting that the disallowance of Rs.32,355 /- made by the Learned Assessing Officer U/s 40(a)(ia) of the Income Tax Act, 1961 are valid & proper even then the consequential enhancement of income of the appellant. To the extent of disallowances shall qualify for deduction U/s 80P(2)(c)(ii) of the Income Tax Act, 1961 up to Rs. 50,000 /- . It may please be held that even if the disallowances made by the Hon'ble CIT Appeal are confirmed the net taxable income of the appellant would be NIL. 3. We have given our thoughtful consideration to the vehement rival contentions and hardly see any merit in the Revenue stand in ITA No.742/PUN/2022 3 support of the impugned section 40(a)(ia) disallowance of Rs.32,355/- pertaining to assessee‟s printing expenses. This is for the precise reason that the assessee herein Pune Zilha Madhyawarti Sahakari Bank Sevakanchi Sahakari Patsanstha Maryadit is admittedly eligible for section 80P deduction. That being the case, we quote CBDT‟s clinching circular No.37/2016 dated 02.11.2016 that such a disallowance of business expenses only enhances the regular business profits eligible for deduction under chapter VI-A of the Act. We, therefore, delete the impugned section 40(a)(ia) disallowance in very terms. No other ground or argument has been pressed before us. 4. This assessee‟s appeal is allowed in above terms. Order pronounced in the Open Court on 20 th January, 2023. Sd/- Sd/- (DIPAK P. RIPOTE) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER प ु णे Pune; ददिधांक Dated : 20 th January, 2023 GCVSR ITA No.742/PUN/2022 4 आदेश की प्रतिलिपि अग्रेपिि/Copy of the Order is forwarded to: 1. अपीऱधर्थी / The Appellant; 2. प्रत्यर्थी / The Respondent; 3. The concerned CIT(A), Pune 4. 5. The concerned Pr.CIT, Pune विभागीय प्रविविवि, आयकर अपीलीय अविकरण, पुणे “B” / DR „B‟, ITAT, Pune 6. गार्ड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अविकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 16-01-2023 Sr.PS 2. Draft placed before author 17-01-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.