Asstt. Comm. Of Income Tax Circle 1, Margao V. Mr. Joaquim Alemao, Goa

ITA 79/PAN/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72029 (ITAT-PANAJI)
• Duration Of Justice: 22 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-1991
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANJUL BARTHAKUR
• Assessee Lawyers: R K PIKALE
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 79/PNJ/2013 : (ASST. YEAR : 2007 - 08) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, MARGAO (APPELLANT) VS. MR. JOAQUIM ALEMAO NAVANGULLY, VARCA, SALCETE, GOA (RESPONDENT) PAN : AFDPA1996D ITA NO. 80/PNJ/2013 : (ASST. YEAR : 2007 - 08) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1, MARGAO (APPELLANT) VS. MRS. DEBBIE JOAQUIM ALEMAO NAVANGULLY, VARCA, SALCETE, GOA (RESPONDENT) PAN : AFDPA1997C REVENUE BY : BANJUL BARTHAKUR , DR ASSESSEE BY : R.K. PIKALE , CA DATE OF HEARING : 23/07/2013 DATE OF PRONOUNCEMENT : 08 /08/2013 O R D E R PER P.K. BANSAL : 1. T HE ABOVE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DT. 21.2.2013 BY TAKING THE FOLLOWING EFFECTIVE COMMON GROUND SINCE THE ASSESSEES ARE HUSBAND AND WIFE AND GOVERNED BY THE PROVISIONS OF SEC. 5A OF THE INCOME TAX ACT : 2. THE LD. CIT(A) PANAJI, HAS ERRED IN DELETING THE ADDITION U/S 40(A)(IA) OF THE I.T. ACT MADE BY AO AMOUNTING TO RS.1,31,33,255/ - (50% OF RS.2,62,66,500/ - ), AS ASSES SEE HAS FAILED TO FULFIL THE CONDITION LAID DOWN IN SECOND PROVISO TO SECTION 194(C)(3)(I) OF I.T. ACT R.W. I T RULES 29D. 2 ITA NOS. 79 & 80/PNJ/2013 (ASST. YEAR : 2007 - 08) 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HIRING OF MINING MACHINERY. DURING THE YEAR, THE AO NOTED THAT THE ASSESSEE HAS NOT DEDUCTED TDS IN RESPECT OF TRUCK HIRING CHARGES AMOUNTING TO RS.2,62,66,509/ - . THE AO APPLIED THE PROVISIONS OF SEC. 40(A)(IA) AND DISALLOWED THE SAME. EVEN HE DID NOT ACCEPT THE CONTENTION OF THE A SSESSEE THAT TDS HAS NOT BEEN DEDUCTED AS THE ASSESSEE HAS OBTAINED FORM 15 I IN RESPECT OF EACH AND EVERY PAYMENT. 50% OF THE SAID DISALLOWANCE WAS ADDED IN THE HANDS OF THE ASSESSEE AND HIS SPOUSE. THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT TDS ON SUB - CONTRACTOR PAYMENT WAS NOT MADE ON RS.2,62,66,509/ - BECAUSE DECLARATION IN FORM 15 I WERE PRODUCED AT THE TIME OF PAYMENT. FOLLOWING THIS, THE ASSESSEE WAS ASKED TO PRODUCE SUBMISSION IN FORM 15J TO CIT(A), PANAJI. THE ISSUE PRODUCED COPIES OF FORM 15J BUT COULD NOT GET ACKNOWLEDGEMENT OF THE SUBMISSION BEFORE CIT(A) AS IT WAS NOT READILY AVAILABLE. IT WAS ALSO CONTENDED THAT THE SECOND PROVISO TO SEC. 194(C)(3)(I) OF THE INCOME TAX ACT R/W RULE 29D OF THE I.T RULES OBLIGED THE CONTRACTOR TO FILE REQUISITE DETAILS OF SUB - CONTRACTORS IN FORM 15J ON/BEFORE 30 TH JUNE FOLLOWING THE FINANCIAL YEAR. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE DISALLOWANCE RELYING ON THE ORDER OF CIT VS. V ALIBHAI KHANBHAI MANKAD, 6 TAXCORP (DT) 53274 (GUJARAT) 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. U/S 40(A)(IA), PAYMENT MADE TOWARDS INTEREST, COMMISSION OR BROKERAGE ETC. ARE TO BE DISALLOWED WHILE COMPUTING TOTAL INCOME OF THE ASSESSEE UNDER THE HEAD PROFIT & GAINS OF BUSINESS OR PROFESSION WHERE THE TAX REQUIRED TO BE DEDUCTED IS NOT DEDUCTED OR WHERE AFTER SUCH DEDUCTION, THE SAME HAS NOT BEEN PAID ON/BEFORE THE DUE DATE OF FILING OF THE INCOME TAX RETURN. THUS, THE ADDITION U/S 40(A)(IA) CAN BE MADE ONLY IF THERE IS A DEFAULT IN DEDUCTING TAX AT SOURCE U/S 194(C)(3) . THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX IF THE SUB - CONTRACTOR/CONTRACTOR PRODUCES NECESSARY DECLARATION IN PRESCRIBED FORM AND 3 ITA NOS. 79 & 80/PNJ/2013 (ASST. YEAR : 2007 - 08) SUCH SUB - CONTRACTOR DOES NOT OWN MORE THAN 2 GOODS CARRIAGES DURING THE PREVIOUS YEAR. THE MOMENT SUCH REQUIREMENT IS FULFILLED, THE LIABILITY OF THE ASSESSEE TO DEDUCT THE TAX ON THE PAYMENT MADE OR TO BE MADE TO SUCH SUB - CONTRACTOR WOULD CEASE. PROVISO TO SEC. 194C REQUIRES THAT THE SUB - CONTRACTOR HAS TO FURNISH SUCH PARTICULARS AS MAY BE PRESCRIBED. RULE 29D REQUIRES SUCH DECLARATION HAS TO BE MADE BY THE END OF JUNE OF THE NEXT ACCOUNTING YEAR. THEREFORE, ONCE THE CONDITION OF THE PROVISO TO SEC. 19 4C(3) ARE SATISFIED, THE LIABILITY OF THE PAYER TO DEDUCT THE TDS WOULD CEASE. THE REQUIREMENT OF SUCH PAYEE TO FURNISH THE DETAILS TO THE INCOME TAX AUTHORITIES IN THE PRESCRIBED WITHIN THE PRESCRIBED TIME WOULD ARISE LATER AND ANY INFRACTION OF SUCH REQ UIREMENT WOULD NOT MAKE THE REQUIREMENT OF DEDUCTION OF TAX APPLICABLE U/S 194C(2). THEREFORE, FULFILMENT OF SUCH REQUIREMENT CANNOT BE LINKED TO THE DEDUCTION OF TAX AT SOURCE AND IT CANNOT BE VISUALIZED TO HAVE ADVERSE CONSEQUENCE. IN THE CASE BEFORE U S , THE ASSESSEE HAS RECEIVED FORM 15 I AND HAS ALSO FILED THE REQUISITE DETAILS OF THE SUB - CONTRACTOR IN ACCORDANCE WITH RULE 29D IN FORM 15J , EVEN THOUGH BELATEDLY, BUT THAT CAN BE TECHNICAL LY VENIAL. IN VIEW OF THIS FACT, IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE. 4. IN THE RESULT, THE APPEALS FILED BY THE REVENUE STANDS DISMISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 08 /08/2013. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 08 /08/ 2013 *SSL* 4 ITA NOS. 79 & 80/PNJ/2013 (ASST. YEAR : 2007 - 08) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT, PANAJI (4) CIT(A), PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER SR. P RIVATE S ECRETARY ITAT, PANAJI, GOA