M/s J.Ahmed Construction Pvt. Ltd., Uttar Dinajpur V. DCIT, Circle -2, Jalpaiguri, Jalpaiguri

ITA 831/KOL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0525 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2012
• Court: TRIBUNAL
• Department Lawyers: R P NAG
• Keywords: Retrospective amendment
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM ] I.T.A NO. 831 /KOL/201 2 ASSESSMENT YEAR : 200 8 - 0 9 M/S. J. AHMED CONSTRUCTION PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME - TAX , (PAN: AABCJ7608M) CIRCLE - 2, JALPAIGURI ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 17 .0 6 .2015 DATE OF PRONOUNCEMENT: 17 . 0 6 . 2015 FOR THE APPELLANT: SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT: SHRI R. P. NAG, JCIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT (A) , JALPAIGURI VIDE APPEAL NO. 4 2/JAL /CIT(A) /JAL/10 - 11 DATED 1 6 . 0 3 .201 2 . ASSESSMENT WAS FRAMED BY DCIT, CIRCLE - 2 , JALPAIGURI U/S. 1 43(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 8 - 0 9 VIDE HIS ORDER DATED 21 . 12 .20 1 0 . 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF PAYMENTS TO SUB - CONTRACTOR WITHOUT DEDUCTION OF TDS U/S. 194C OF THE ACT BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 1 AND 2: 1. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1,29,44,687/ - MAD E BY THE LD. AO IN RESPECT OF PAYMENTS MADE TO SUB - CONTRACTORS INVOKING THE PROVISION OF SEC.40(A)(IA). 2. FOR THAT THE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION U/S. 40(A)(IA) IN RESPECT OF PAYMENTS ALREADY MADE TO THE SUB - CONTRACTORS DURING THE FY 2 007 - 08. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO HAS SIMPLY MADE DISALLOWANCE OF SUB - CONTRACTOR PAYMENT FOR NON - DEDUCTION OF TDS U/S. 194C OF THE ACT BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO . NOW BEFORE US, LD. COUNSEL FOR THE ASSESSEE ONLY MADE ALTERNATIVE ARGUMENT THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT AS INSERTE D BY FINANCE ACT, 2012 WOULD APPLY IN THE CASE OF THE ASSESSEE . FOR THIS, HE RELIED ON THE DECISION OF COORDINATE BENCH IN THE CASE OF SANTOSH KUMAR KEDIA VS. ITO, IN ITA NO. 1905/KOL/2014 FOR AY 2007 - 08 DATED 04.03.2015, WHEREIN IT HAS BEEN HELD AS UNDER : 2 ITA NO. 8 3 1 /K/201 2 J. AHMED CONSTN. P. LTD. AY 200 8 - 0 9 9. IT WOULD THUS APPEAR THAT NO SUBMISSION WAS MADE BEFORE HON'BLE CALCUTTA HIGH COURT THAT THE SECOND PROVISO WAS CURATIVE OR RETROSPECTIVE IN OPERATION. ON THE OTHER HAND, SUBMISSION WAS THAT THE SECOND PROVISO EFFECTIVE FROM APRIL 1, 2013 WENT TO S HOW THAT THE LEGISLATURE WAS NOT IN FAVOUR OF CREATING UNDUE HARDSHIP FOR ASSESSEE AND THAT CLAUSE (IA) SHOULD NOT BE CONSTRUED AS CREATING SUCH HARDSHIP. THE SAID LIMITED SUBMISSION OF THE ASSESSEE WAS DEALT WITH BY THE HON'BLE HIGH COURT IN PARAGRAPH 21O F ITS JUDGMENT. THE QUESTION BEFORE HON'BLE CALCUTTA HIGH COURT WAS AS TO, WHETHER CLAUSE (IA) ONLY APPLIED TO AMOUNT OUTSTANDING AT THE END OF THE YEAR AND NOT IN RESPECT OF PAYMENTS ACTUALLY MADE DURING THE PREVIOUS YEAR OR NOT? HON'BLE CALCUTTA HIGH COU RT WAS PLEASED TO HOLD THAT CLAUSE (IA) WAS APPLICABLE NOT ONLY IN RESPECT TO OUTSTANDING AMOUNTS BUT ALSO AMOUNTS PAID. IN DECIDING THE SAID CONTROVERSY, THE HON'BLE CALCUTTA HIGH COURT WAS PLEASED TO REJECT THE SUBMISSION ON BEHALF OF THE ASSESSEE THAT T HE OBJECT BEHIND THE INSERTION OF THE SECOND PROVISO WITH EFFECT FROM APRIL 1, 2013 SHOULD ALSO GUIDE THE INTERPRETATION OF THE PARENT CLAUSE (IA). IT WAS ARGUED BY LD. COUNSEL FOR THE ASSESSEE THAT THE OBSERVATIONS OF THE HON'BLE HIGH COURT IN PARAGRAPH 2 1 OF ITS JUDGMENT DEALT WITH THE LIMITED ARGUMENT MADE ON BEHALF OF THE ASSESSEE RECORDED IN PARAGRAPHS 5 AND 6 OF THE JUDGMENT AND CANNOT BE READ AS DECIDING THE QUESTION AS TO WHETHER THE SECOND PROVISO IS CURATIVE AND CLARIFICATORY OF THE LAW FROM ITS I NCEPTION. THE QUESTION WHETHER THE SECOND PROVISO IS CURATIVE AND CLARIFICATORY DID NOT ARISE FOR CONSIDERATION IN CRESCENT S CASE, WAS NOT DEBATED BEFORE THE HON'BLE CALCUTTA HIGH COURT. HON'BLE SUPREME COURT IN THE CASE OF IN STATE OF HARYANA V. RANBIR , (2006) 5 SCC 167, HAS DISCUSSED THE CONCEPT OF THE OBITER DICTUM THUS: 'A DECISION, IT IS WELL SETTLED, IS AN AUTHORITY FOR WHAT IT DECIDES AND NOT WHAT CAN LOGICALLY BE DEDUCED THEREFROM. THE DISTINCTION BETWEEN A DICTA AND OBITER IS WELL KNOWN. OBITER DICTA IS MORE OR LESS PRESUMABLY UNNECESSARY TO THE DECISION. IT MAY BE AN EXPRESSION OF A VIEWPOINT OR SENTIMENTS WHICH HAS NO BINDING EFFECT. 10. SECONDLY, I AM OF THE VIEW THAT THE INSERTION OF SECOND PROVISO TO SEC. 40(A)(IA ) OF THE ACT IS CURATIVE AND IT HAS RETROSPECTIVE EFFECT W.E.F. 1 ST APRIL, 2005, BEING A DATE FROM WHICH SEC. 40(A)(IA) OF THE ACT WAS INSERTED BY THE FINANCE (NO. 2) ACT, 2004. IN VIEW OF THIS, I AM OF THE VIEW THAT MATTER NEEDS FRESH ADJUDICATION IN THE LIGHT OF THE FACT THAT THE AO WILL CARRY OUT NECESSARY VERIFICATION IN REGARD TO RELATED PAYMENTS HAVING BEEN TAKEN INTO ACCOUNT BY THE RECIPIENT IN COMPUTATION OF ITS INCOME AND VERIFICATION OF PAYMENT OF TAXES IN RESPECT OF SUCH INCOME AND ALSO FILING O F INCOME TAX RETURN BY THE RECIPIENT. IN TERM OF THE ABOVE, THE SECOND ASPECT ARGUED BY LD. COUNSEL IS RESTORED BACK TO THE FILE OF THE AO AND ASSESSEE WILL PROVIDE ALL THE DETAILS IN TERMS OF SECOND PROVISO TO SEC. 40(A)(IA) OF THE ACT. SINCE THE ISS UE IS IDENTICAL AND NO CONTRADICTOR MATERIAL HAS BEEN BROUGHT OUT BY LD. SR. DR, WE FOLLOWING THE DECISION CITED SUPRA, RESTORE THE ISSUE BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN TERMS OF THE ABOVE DIRECTIONS. APPEAL OF ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES 4 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 5 . ORDER IS PRONOUNCED IN THE OPEN COURT . S D / - S D / - ( P. K. BANSAL ) (MAHAVIR SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED : 17 TH JUNE , 201 5 JD.(SR.P.S.) 3 ITA NO. 8 3 1 /K/201 2 J. AHMED CONSTN. P. LTD. AY 200 8 - 0 9 COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT M/S. J. AHMED CONSTRUCTION PVT. LTD., KHANTA, RASAKHOWA, UTTAR DINAJPUR - 733212 . 2 RESPONDENT DCIT, CIRCLE - 2, JALPAIGURI 3 . THE CIT (A), JALPAIGURI 4. 5. CIT, JALPAIGURI DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .