M/s The Nabha Primary Co-op Agricultural Development Bank Ltd., Nabha V. DCIT, Circle , Mandi Gobindgarh

ITA 755/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6535 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: DIPINDER SINGH
• Keywords: TDS; Set aside
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.755/CHD/2018 ASSESSMENT YEAR: 2014-15 M/S THE NABHA PRIMARY CO-OP VS. THE DCIT, AGRICULTURAL DEVELOPMENT BANK MANDI, LTD., BASANTPURA MOHALLA GOBINDGARH NABHA PAN NO. AAATN6364Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. DIPINDER SINGH, ADVOCATE REVENUE BY : SMT. CHANDRAKANTA, SR. DR DATE OF HEARING : 25/02/2019 DATE OF PRONOUNCEMENT : 25/02/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 23/03/2018 OF LD. CIT(A)-3, LUDHIANA. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS . 1,83,452/- FOR ALLEGED ON ACCOUNT OF CASH PAYMENTS EXCEEDING RS. 20,000-00 TO THE VEHICLE OWNERS PAID APPLYING THE PROVISIONS OF SECTION 40(A ) (3) WHICH ARE NOT APPLICABLE AND AS SUCH THE ADDITION IS ILLEGAL, ARB ITRARY AND UNJUSTIFIED. 2) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS . 1,83,452/- IGNORING THE FACT THAT THE APPELLANT SOCIETY IS NOT COVERED U/S 40 (A) (3) OF THE INCOME TAX ACT, 1961 BECAUSE IT IS A AGRICULTURAL C OOPERATIVE SOCIETY NOT A FINANCIAL INSTITUTES. 3) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE DISALLOWANCE O F DEDUCTION EQUAL TO THE ASSESSED INCOME U/S 80 P (2) (A) (I) OF THE ACT. 4) THAT THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR A MEND ANY GROUND OF THE APPEAL BEFORE THE APPEAL IS FINALLY DISPOSED OF. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE SUSTENANCE OF ADDITION OF RS. 1,83,452/- MADE BY THE ASSESSING OF FICER UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT). 4. FACTS OF THE CASE IN BRIEF ARE THAT ETH ASSESSEE E-FILED RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. 2 5. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED VEHICLE CHARGES AT RS . 2,40,224/- WHICH INCLUDED PAYMENTS ON VARIOUS DATES EXCEEDING RS. 20,000/- AN D SUCH DISCREPANCY WAS POINTED OUT IN THE AUDIT REPORT ALSO. THE ASSESSING OFFICER POINTED OUT THAT THE ASSESSEE HAD MADE PAYMENTS AMOUNTING TO RS. 1,83,45 2/- TO SHRI SARUP CHAND AND SHRI ANOKH SINGH, DETAILS OF SUCH EXPENSES HAD BEEN GIVEN IN PARA 2 OF THE ASSESSMENT ORDER (FOR THE COST OF REPETITION THE SA ME IS NOT REPEATED HEREIN). THE ASSESSING OFFICER DISALLOWED THE SAID AMOUNT OF RS. 1,83,452/- UNDER SECTION 40A(3) OF THE ACT. 6. BEING AGGRIEVED THE ASSESEE CARRIED THE MATTER T O THE LD. CIT(A)AND SUBMITTED AS UNDER: THE ABOVE APPEAL STANDS FIXED FOR HEARING ON TODAY THE 22ND OF MARCH 2018. BRIEF HISTORY OF THE CASE: THAT THE ASSESSES IS A CO-OP SOCIETY AND ITS INCOME IS EXEMPTED U/S 80 (P) (2) OF THE INCOME TAX ACT, 1961. THE DISALLOWANCE OF EXPEN SES U/S 40 A(3) OF THE INCOME TAX ACT, 1961, MADE BY ASSESSING OFFICER ALS O COMES UNDER EXEMPTED INCOME AND THE LD. ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE D ISALLOWANCE OF DEDUCTION EQUAL TO THE ASSESSED INCOME U/S 80 P (2) (A) (I) OF THE ACT IN THIS REGARD. THE ASSESSEE (CO-OP SOCIETY) GAVE LOAN TO FAMERS AN D MOSTLY THE FARMER DID NOT REPAY THE LOANS IN TIME AND BECOME DEFAULTERS. THE BANK AUTHORITIES IN ORDER TO RECOVER THE LOAN AMOUNT FROM FARMERS, VISITS THE PL ACE OF FARMERS WHERE THEY RESIDE TIME TO TIME. THE BANK AUTHORITIES MOSTLY VI SITS OFF TIME TO CATCH THE FARMERS. THEY SOMETIMES VISITS EARLY MORNING, OR IN THE EVEN ING OR AS MAY SUITABLE TO THEM TO CATCH THE FARMERS FOR RECOVERY. FOR THIS PURPOSE THE AUTHORITIES HAS TO HIRE CAR (CHARGES ARE INCLUDING PETROL / DIESEL EXPENSES) IN OFF TIME AS STATED ABOVE AND PAID CASH TO THE DRIVERS, SO TO ENABLE THEM TO GET FUEL FOR THE CAR. THEY PAID HIRE CHARGES IN CASH BECAUSE MOSTLY THE PAYMENTS TO THE VEHICLE OWNERS ARE IN OFF TIME. MOREOVER, CAR DRIVERS /VEHICLE OWNERS CONDITI ONALLY CALLED CASH AND MOSTLY THEY ARE VILLAGERS AND DON'T HAVE BANK ACCOUNTS. THERE ARE SO MANY CASES IN WHICH HON'BLE COURTS GAV E RELIEF TO THE ASSESSEE WHO ARE DEFAULTERS U/S 40 A(3) OF THE INCOME TAX ACT, 1 961 AND THESE ARE: 1) IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH 'C'KOLKATA, BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO.391/KOL/2014 ASSESSMENT YE AR :2010-U IN THE CASE OFNIRMAL KUMAR DAS, MIDNAPORE VS ASSESSEE ON 11 DEC EMBER, 2015. 2) IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH 'C' KOLKATA, BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHR I S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.L603/KOL/2011 ASSESSMENT YEA R :2008-09, IN THE CASE OF PRABIR KUMAR MULLICK V/S. INCOME TAX OFFICER, SEARS OL C.S.SHOP, WARD-3(1), G.T. ROADSHISUBAGAN (KALALI GALI) (WEST), ASANSOL RANIGU NJ (BURDWAN) [PANNO. AJEPM 7142 G]. KEEPING IN VIEW OF ABOVE STATED FACTS AND SUBMISSIO N, IT IS, RESPECTFULLY PRAYED THAT THE APPEAL OF ASSESSEE SOCIETY MAY PLEASE BE A LLOWED. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD FILED VERY VAGUE AND GENERAL SUBMISSIONS WITHOUT ANY 3 DOCUMENTARY EVIDENCE AND MADE THE PAYMENTS TO ONLY ONE PERSON NAMELY SHRI ANOKH SINGH EXCEEDING RS. 20,000/- THROUGHOUT THE YEAR UNDER THE VEHICLE HIRING CHARGES, HE THEREFORE SUSTAINED THE DISALLOW ANCE MADE BY THE ASSESSING OFFICER. 8. NOW THE ASSESSEE IS IN APPEAL. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E PAYMENTS WERE MADE TO THE DRIVERS FOR HIRING OF VEHICLES AND NONE OF THE PAYMENT ON A SINGLE DAY EXCEEDED RS. 20,000/-. IT WAS FURTHER SUBMITTED THA T THE PAYMENTS WERE MADE FOR HIRING OF VEHICLES ON DIFFERENT DATES AND TDS W AS DEDUCTED ON THE SAID PAYMENTS, REFERENCE WAS MADE TO PAGE NO. 36 OF THE ASSESSEES PAPER BOOK WHICH IS THE COPY OF THE DETAILS OF THE PAYMENTS ON WHICH TDS WAS DEDUCTED. 10. ON HER RIVAL SUBMISSIONS THE LD. SR. DR SUBMITT ED THAT THE DOCUMENTS REFERRED BY THE LD. COUNSEL OF THE ASSESEE WERE NOT PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT(A) THEREFOR E THIS ISSUE MAY BE SET ASIDE TO THE FILE OF THE LD. CIT(A) FOR VERIFICATION. 11. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PR ESENT CASE ADMITTEDLY THE DETAILS OF THE EXPENSES ON WHICH TDS HAS BEEN DEDUC TED PLACED AT PAGE NO. 36 OF THE ASSESSEES PAPER BOOK WAS NOT AVAILABLE T O THE LD. CIT(A). IT IS ALSO NOT CLEAR AS TO WHETHER THE SINGLE PAYMENT HAD NOT EXCE EDED RS. 20,000/- FOR HIRING OF THE VEHICLES. I THEREFORE CONSIDERING THE TOTALI TY OF THE FACTS, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FIL E OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER CON SIDERING THE EVIDENCE FURNISHED BY THE ASSESSEE FIRST TIME BEFORE THE ITA T. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/2019.) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 25/02/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR