KAMLACHAND T BAID, MUMBAI V. ITO 24(3)(1), MUMBAI

ITA 7565/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9380 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: R N MEHTA
• Section: 143(3); 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.7565/MUM/2012 (A.Y.2008-09) MR. K AMALCHAND T. B AID PROP. M/S. NINE LINE OFFSETS J-3/12, JALMANGAL CO-OP SOC., BANGUR NAGAR, GOREGAON (W) MUMBAI-400 062. GIR NO./PAN : AACPB 9267 G (APPELLANT ) VS. THE INCOME TAX OFFICER WARD-24(3)(1) ROOM NO.507, PRATYAKSHAKAR BHAVAN, C-13, BANDRA KURLA COMPLEX, BANDRA (W) MUMBAI-400 051. (RESPONDENT) APPELLANT BY : SHRI R.N. MEHTA RESPONDENT BY : MS. S. PADMAJA DATE OF HEARING : 18 /02/2015 DATE OF PRONOUNCEMENT : 25 /02/2015 ORDER PER CHANDRA POOJARI, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09/10/2012 PASSED BY CIT UNDER SECTION 263 OF THE INCOME TAX ACT . 2. THE ASSESSEE RAISED GROUND WITH REGARD TO INVOKI NG OF PROVISION UNDER SECTION 263 OF THE INCOME TAX ACT SO AS TO REVISE THE ORDER OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE ACT, THOUGH IT IS NOT ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE. FACTS OF THE CASE ARE THAT ASSESSEE HAS DEDUCTED TAX AT SOURCE ON THE EXPENSES COVERED UNDER CHAPTER XVII-B IN SOME CASES BUT NOT DEDUCTED TDS IN SOME OTHER CASES. THE TDS IS NOT PAID AS PER PROVISIONS OF SECTION 40(A)(IA) IN THE FOLLOWING CASES :- 2 ITA NO.7565/M /12 S.NO. NAME OF THE PARTY NATURE OF EXPENDITURE DT. OF PAYMENT TO PARTY DUE DATE OF DEPOSITING TDS DT. OF TDS PAYMENT AMOUNT OF TDS (RS.) CORRESPONDING AMOUNT OF ALLOWANCE U/S. 40(A)(IA) (RS.) 1. G.R. CO. BLDG. EXP. JAN.08 31.3.08 7.4.08 12 62 61,262 2. PRAKRUTI GRAPHIC LABOUR CHARGES JAN.08 31.3.08 7.4.08 2236 1,08,570 3. PRIYA GRAPHIC LABOUR CHARGES JAN.08 31.3.08 31.3.08 54 2,612 4. SIDDHIVINAYAK ENTERPRISES LABOUR CHARGES JAN.08 31.3.08 31.3.08 89 4,330 2.1 ACCORDING TO CIT THE AMENDMENT TO SECTION 40(A) (IA) IS NOT RETROSPECTIVE AND THOUGH THE ASSESSEE PAID THE TDS BEFORE THE DUE DA TE OF FILING OF RETURN OF INCOME AND IT IS TO BE DISALLOWED AS IT IS NOT PAID WITHIN DUE DATE FOR DEPOSIT OF TDS I.E. 31.3.2008. ACCORDINGLY, HE DIRECTED THE AO TO VERIFY THE DATE OF PAYMENT AND DECIDE ACCORDINGLY. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL ON RECORD. THE LD. AR SUBMITTED THAT AT THE TIME OF PASSING OF ASSESSMENT ORDER ON 26/11/2010, THERE ARE DECISIONS IN FAVOUR OF THE ASSESSEE REGARDING THE A LLOWABILITY OF DEDUCTION THOUGH THE TDS IS NOT PAID WITHIN A STIPULATED TIME. THE LD. A R SUBMITTED THAT TDS AMOUNT WAS DEPOSITED TO GOVERNMENT ACCOUNT/TREASURY BEFORE THE DUE DATE OF FILING OF RETURN, THE SAME BE ALLOWED. ACCORDING TO THE LD. AR OF THE ASS ESSEE WHAT IS TO BE SEEN IS LEGAL POSITION PREVAILING AS ON THE POINT OF TIME WHEN TH E REVISION ORDER IS PASSED. ACCORDING TO HIM, THE AMENDMENT BY FINANCE ACT 2010 TO SECTIO N 40(A)(IA) IS RETROSPECTIVE IN NATURE AND BENEFIT IS TO BE GIVEN TO THE ASSESSEE . FURTHER, HE SUBMITTED THAT THE CIT PASSED A REVISION ORDER ON 09/10/2012 . AT THAT TIM E ALSO THE FOLLOWING JUDGMENTS ARE AVAILABLE IN FAVOUR OF THE ASSESSEE :- I) CIT VS. VIRGIN CREATIONS (CAL.) ITAT NO.302 OF 2011 DATED 23/11/2011 ; II) PIYUSH C. MEHTA VS. ACIT (MUM) [2012] 52 SOT 27 (MUM.)[2012] 20 TAXMANN.COM 473 AND ORDER DATED 11 TH APRIL 2012 FOR ASSESSMENT YEAR 2005-06 3 ITA NO.7565/M /12 III) ITO VS. TARU LEADING EDGE(P) LTD. IN ITA NO.359 2/DEL/2011 ORDER DATED 22/5/2012 FOR ASSESSMENT YEAR 2008-09. 4. ON THE OTHER HAND THE LD. DR SUBMITTED THAT THE AMENDMENT TO SECTION 40(A)(IA) BY FINANCE ACT 2010 IS ONLY RETROSPECTIVE IN NATURE . BEING SO, THAT THE TDS IS NOT PAID IN ACCORDANCE WITH IT RULE 30, CIT IS JUSTIFIED IN EXE RCISING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT. 5. WE HAVE HEARD BOTH PARTIES PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDER SECTION 236 CIT CAN EXERCISE REVISIONAL JURISDICTIO N, IF HE IS SATISFIED THAT THE ORDER OF THE AO IS SOUGHT TO BE REVISED ON THE REASON THAT : I) IT IS ERRONEOUS; AND ALSO II) PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5.1 SECTION 263 OF THE ACT EMPOWERS THE COMMISSIONE R TO INITIATE SUO-MOTO PROCEEDINGS EITHER WHERE AO TAKES A WRONG DECISION WITHOUT CONSIDERING MATERIAL AVAILABLE OF RECORD OR HE TAKES A DECISION WITHOUT MAKING ENQUIRY INTO MATTERS WHERE SUCH ENQUIRY PRIMA FACIE WAS WARRANTED. AT THE SAME TIME IF THE AO HAS TAKEN ANY DECISION CONTRARY TO THE LAW AS APPLICABLE AT THE T IME OF ASSESSMENT AND THE DECISION OF AO IS NOT IN ACCORDANCE WITH THE LAW, IT IS INCUMBE NT UPON CIT TO CORRECT SUCH ERROR COMMITTED BY THE AO. IN THE PRESENT CASE, THE AO AL LOWED THE EXPENDITURE LISTED IN EARLIER PARA, THOUGH, TDS WAS REMITTED NOT IN ACCOR DANCE WITH RULE 30 AND THE SAME WAS PAID BEFORE DUE DATE OF FILING OF RETURN OF INC OME. ACCORDING TO CIT THE ABOVE PAYMENTS SHOULD HAVE BEEN MADE WITHIN THE STIPULATE D PERIOD MENTIONED IN RULE 30. ON THE OTHER HAND IT IS BROUGHT TO OUR NOTICE THAT THE ASSESSEE HAS REMITTED THE SAME WITHIN THE DUE DATE FOR FILING OF RETURN OF INCOME AND IN VIEW OF THE AMENDMENT TO SECTION 40(A)(IA) BROUGHT OUT BY FINANCE ACT 2010, THE ASSESSEE IS ENTITLED FOR DEDUCTION OF ABOVE AMOUNT WHILE COMPUTING THE INCOM E OF THE ASSESSEE. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEES COUNSEL. IT WAS HELD BY THE HON'BLE CALCUTTA HIGH COURT VIDE THEIR DECISION DATED 23.11.2011 IN ITAT NO.302 OF 2011 IN CIT VS. VIRGIN 4 ITA NO.7565/M /12 CREATION THAT AMENDMENT TO THE PROVISION TO SECTION 40(A)(I A) WAS RETROSPECTIVE FROM 01/04/2005. SAME DECISION WAS FOLLOWED BY THE CO-OR DINATE BENCH OF THIS TRIBUNAL IN THE CASE OF PIYUSH C. MEHTA VS. ACIT [IN ITA NO.1321(MUM)2009 ORDER DATED 11/4/2012] . 5.2 FURTHER BANGALORE BENCH OF THE TRIBUNAL IN THEIR DECISION DATED 10/5/2012 IN ITA NO.717/BANG./11 FOR ASSESSMENT YEAR 2008-09 IN THE CASE OF ACIT VS. M.K. GURUMURTHY ALSO HELD THAT THE AFORESAID AMENDMENT IS APPLICABL E RETROSPECTIVELY W.E.F. 1/4/2005. BEING SO, IN OUR OPINION THE AMENDMENT TO SECTION 4 0(A)(IA) BY FINANCE ACT, 2010, NO DIFFERENCE CAN BE MADE UNDER SEC. 40(A)(IA) IF THE ASSESSEE MADE THE PAYMENT OF TDS BEFORE DUE DATE FOR FILING OF RETURN OF INCOME UNDE R SECTION 139(1) OF THE ACT AND THIS AMENDMENT IS RETROSPECTIVE IN NATURE AND CONSEQUENT LY, WHEN THE ASSESSEE MADE PAYMENT OF TAX DEDUCTED AT SOURCE TO THE GOVERNMENT TREASURY BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1), IT CANNOT BE DISALLOWED IN TERMS OF PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. ONE HAS T O SEE THE LEGAL POSITION PREVAILING AT THAT POINT OF TIME WHEN REVISION ORDER IS PASSED BY CIT AND IN THE INSTANT CASE IT WAS ON 9/10/12. AT THAT TIME, THERE WERE DECISIONS AVAILAB LE IN FAVOUR OF THE ASSESSEE ON THIS ISSUE AND THE AO HAS TAKEN ONE POSSIBLE VIEW AND IN THAT CIT CANNOT FIND FAULT WITH. IN OUR CONSIDERED OPINION, THE LD. CIT IS NOT JUSTIFIE D IN EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT. ACCORDINGLY, WE ARE INCLINE D TO ANNUL THE ORDER PASSED BY CIT UNDER SECTION 263 OF THE INCOME TAX ACT. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/ 2015 !' # $%& 25/02/2015 ! ' SD/- SD/- ( . . / I.P. BANSAL) ( / CHANDRA POOJARI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; $% DATED 25/02/2015 . % . ./JV, SR. PS 5 ITA NO.7565/M /12 ()* ()* ()* ()* +*') +*') +*') +*') / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0' ()% , , / DR, ITAT, MUMBAI 6. '1 2 / GUARD FILE. % % % % / BY ORDER, .*) () //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI