SMT. CHANDANA CHOPRA, Ujjain V. THE ITO Ward 1(2), Ujjain

ITA 90/IND/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99236 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Retrospective amendment
• Section: 201(1); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 90/IND/2015 A.Y. : 2008-09 SMT.CHANDANA CHOPRA, ITO, 1(2), REPRESENTATIVE OF LATE SHRI ABHAY KUMAR CHOPRA, MAHIDPUR VS. UJJAIN APPELLANT RESPONDENT PAN NO.ACZPC8310Q A PPELLANT S BY : SHRI S.S.DESHPANDE, CA R ESPONDENT BY : SHRI R. A. VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 07.11.2014 FOR THE ASSESSM ENT YEAR 2008-09 . DATE OF HEARING : 16.11 .2015 . DATE OF PRONOUNCEMENT : 21 . 1 2 .2015 SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 2 2 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF REOPENING U/S 148. ALL NECESSARY DETAILS AND INFORMATION WERE SUBMITTED DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS. THE REOPENING IS BAD IN LAW AND THE ASSESSMENT DESERVES TO BE QUASHED. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 4,50,000/- ON ACCOUNT OF DISALLOWANCE OF INTEREST PAYMENT U/S 40(A)(IA) FOR NOT DEDUCTING TH E TDS. 2.1 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE RECIPIENT IS AN INCOME TAX ASSESSEE AND HAS DISCLOSED THE INTEREST RECEIPTS AND HAS PAID THE TA X. THUS, THE SECOND PROVISO TO SECTION 40(A)(IA) WOULD BE APPLICABLE WHICH HAS A RETROSPECTIVE EFFECT. 2.2 THE ADDITION OF RS. 4,50,000/- MAY PLEASE BE DELETED. SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 3 3 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND DERIVES INCOME FROM TRADING IN GRAIN S AND OIL SEEDS. THE ASSESSEE IS CARRYING ON THE BUSINESS IN THE NAME STYLE OF M/S. SHREE TRADING CO., MAHIDPUR. THE AO M ADE THE ADDITION OF RS. 4,50,000/- ON ACCOUNT OF INTEREST P AID. THEREFORE, THE ASSESSEE HAS FILED THE APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) HAS CONFIRMED THE SAME. 4. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE CONTENDED BEFORE ME THAT THIS IS A YEAR 2008-09. THIS HON'BLE TRIBUNAL IN THE CASE OF M/S.PRATIBHA EXIMS PRIVATE LIMITED IN I.T.A.NO. 90/ IND/2013, HAS DEALT WITH THIS ISSUE IN PARAGRAPH 8, AND RESPE CTFULLY FOLLOWING THE SAME, THE MATTER MAY BE RESTORED TO T HE AO TO VERIFY WHETHER THE PAYEE HAD ALREADY ACCOUNTED THIS INCOME IN HIS RETURN OF INCOME AND PAID TAX ON IT. 5. LD. DR OBJECTED TO IT. THE LD. DR HAS DRAWN OUR ATTENTION TO THE RETURN FILED BY SHRI ASHISH KUMAR CHOPRA, WHICH IS AT PAGES 33-34 OF THE PAPER BOOK. THE LD. DR CONTENDED THAT THE ASSESSEE HAS SHOWN THE INTEREST INCOME OF RS. 4,50,000/- BUT HE HAS ALSO CLAIMED EXPENSES OF RS. 4.50 SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 4 4 LACS. THEREFORE, THERE WAS NIL INCOME. THEREFORE, T HE PAYEE HAS NOT PAID TAXES ON THE INTEREST INCOME RECEIVED FROM THE ASSESSEE SHREE TRADING COMPANY. THEREFORE, THE MATT ER MAY BE RESTORED TO THE AO TO VERIFY THE SAME. 6. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF I.T.A.T. IN I.T.A.NO. 90/IND/2013, WHEREIN HE ISSUE HAS BEEN DEALT IN DETAIL IN PARAGRAPH 8 AT PAGE 10 OF THE I.T.A.TS O RDER, WHICH READS AS UNDER :- 8. WITH REGARD TO THE PROVISIONS OF SECTION 40(A)(I A) AND 201(1) AMENDMENT WAS BROUGHT IN BY FINANCE ACT, 2012, THE SAME ARE CLARIFICATORY IN NATURE IN SO FAR AS PROVISO SO INSERTED ARE ONLY REMEDIES TO MAKE THE PROVISIONS WORKABLE. HON'BLE APEX COURT IN THE CASE OF ALLIED MOTORS PRIVATE LIMITED (SUPRA) AND VINAY CEMENT (SUPRA) HAVE ALSO TREATED SIMILAR PROVISIONS AS CURATIVE IN NATURE, THEREFORE, APPLICABLE RETROSPECTIVELY. HON'BLE KOLKATA HIGH COURT ALSO IN THE CASE OF SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 5 5 VIRGIN CREATORS HAVE TAKEN THE SAME VIEW. COORDINATE BENCH OF I.T.A.T., INDORE IN THE CASE OF ACIT VS. R.M. CHEMICALS, I.T.A.NO. 461/IND/2012, HAD ALSO TAKEN THE SAME VIEW. PROVISO 1 AND 2 TO SECTION 40(A)(IA) HAVE BEEN DULY AMENDED BY THE FINANCE ACT, 2010, AND 2012, WHICH READS AS UNDER :- ANY INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVIC ES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, [HAS NOT BEEN PAID ON OR BEFORE THE DUE DATE SPECIFIED IN THE SUB-SECTION (1) OF SECTION 139: PROVIDED THAT WHEREIN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR, OR SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 6 6 HAS BEEN DEDUCTED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB SECTION (1) OF SECTION 139, SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII-B ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB- SECTION (1) OF SECTION 201, THEN, FOR THE PURPOSE O F THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING THE RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. SECTION 201(1), PROVISO STATES AS UNDER : PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF THE COMPANY WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 7 7 THE PROVISIONS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT - I. HAS FURNISHED HIS RETURN OF INCOME U/S 13 9 II. HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME ON SUCH RETURN OF INCOME, AND - III. HAS PAID THE TAX DUE ON THE INCOME DECLARE D BY HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNISHES CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED . COORDINATE BENCH IN THE CASE OF SHRI JAWAHAR LAL, I.T.A.NO. 204 & 205/IND/2011, ORDER DATED 31ST AUGUST, 2012, HELD THAT AMENDMENT BROUGHT IN SECTION 40A(IA) BY FINANCE ACT, 2010, WAS RETROSPECTIVE FROM 1.4.2005. PRECISE OBSERVATION WA S AS UNDER :- 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BEL OW SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 8 8 AND ALSO DELIBERATED ON THE DECISIONS RELIED ON BY THE CIT DR IN THE CASE OF BHARTI SHIPYARD, AS WELL AS T HE DECISION OF HON'BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS. WE FOUND THAT VARIOUS BENCHES OF THE TRIBUNAL HAVE DEALT WITH THE ISSUE OF ALLOWABIL ITY OF CLAIM OF DEDUCTION U/S 40A(IA) DURING THE ASSESSMENT YEAR 2005-06 AND SUBSEQUENTLY, WHEREIN IT WAS HELD THAT IN VIEW OF THE DECISION OF HON'BLE KOLKATA HIGH COURT IN THE CASE OF VIRGIN CREATIONS AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2010, WERE RETROSPECTIVE FROM 1.4.2005. IN THE CASE OF PIYUSH C.MEHTA, I.T.A.T., MUMBAI BENCH IN I.T.A.NO. 1231/MUM/2009 VIDE ORDER DATED 11TH APRIL, 2012, HELD AS UNDER :- 17. IT CAN BE SEEN FROM THE ABOVE DECISION OF THE HON'BLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SEC.40A(IA) OF THE ACT, BY THE FINANCE ACT, 2010 AS AFORESAID WAS HELD TO BE RETROSPECTIVE FROM 1.4.2005. IF THE AMENDMENT IS CONSIDERED AS RETROSPECTIVE SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 9 9 FROM 1.4.2005, THE EFFECT WILL BE THAT PAYMENTS OF TDS TO THE CREDIT OF THE GOVERNMENT ON OR BEFORE THE LAST DATE FOR FILING RETURN OF INCOME U/S. 139(1) OF THE ACT FOR THE RELEVANT AY HAVE TO BE ALLOWED & DEDUCTION. ADMITTEDLY, IN THE CASE OF THE ASSESSEE PAYMENTS WERE SO MADE BEFORE THE SAID DUE DATE AND IN TERMS OF THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT NO DISALLOWANCE COULD BE MADE BY THE AO U/S. 40(A)(IA) OF THE ACT. 18. THE QUESTION NOW IS AS TO WHETHER TO FOLLOW THE DECISION OF THE HON'BLE SPECIAL BENCH WHICH HAS TAKEN THE VIEW THAT AMENDMENT BY THE FINANCE ACT, 2010 TO THE PROVISIONS OF SEC.40(A)(IA) OF THE ACT IS PROSPECTIVE AND NOT RETROSPECTIVE FROM 1.4.2005 OR THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT TAKING A CONTRARY VIEW. ON THE ABOVE QUESTION, THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE ITAT DELHI IN THE CASE SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 10 10 OF TEJ INTERNATIONAL (P) LTD. V. DY. CIT (2000) 69 TTJ (DEL) 650, WHEREIN IT WAS HELD THAT IN THE HIERARCHICAL JUDICIAL SYSTEM THAT WE HAVE IN INDIA, THE WISDOM OF THE COURT BELOW HAS TO YIELD TO THE HIGHER WISDOM OF THE COURT ABOVE, AND THEREFORE, ONCE AN AUTHORITY HIGHER THAN THIS TRIBUNAL HAS EXPRESSED ITS ESTEEMED VIEWS ON AN ISSUE, NORMALLY, THE DECISION OF THE HIGHER JUDICIAL AUTHORITY IS TO BE FOLLOWED. THE BENCH HAS FURTHER HELD THAT THE FACT THAT THE JUDGMENT OF THE HIGHER JUDICIAL FORUM IS FROM A NON-JURISDICTIONAL HIGH COURT DOES NOT REALLY ALTER THIS POSITION, AS LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GODAVARIDEVI SARAF, 113 ITR 589(BOM). 19. IN VIEW OF THE ABOVE, WE HOLD FOLLOWING THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT THAT AMENDMENT TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, BY THE FINANCE ACT, 2010 IS RETROSPECTIVE FROM 1.4.2005. CONSEQUENTLY, ANY SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 11 11 PAYMENT OF TAX DEDUCTED AT SOURCE DURING PREVIOUS YEARS RELEVANT TO AND FROM AY 05-06 CAN BE MADE TO THE GOVERNMENT ON OR BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S.139(1) OF THE ACT. IF PAYMENTS ARE MADE AS AFORESAID, THEN NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT CAN BE MADE. ADMITTEDLY IN THE PRESENT CASE THE ASSESSEE HAD DEPOSITED THE TAX DEDUCTED AT SOURCE BEFORE THE DUE DATE FOR FILING RETURN OF INCOME U/S. 139(1) OF THE ACT AND THEREFORE THE IMPUGNED DISALLOWANCE DESERVES TO BE DELETED. WE ORDER ACCORDINGLY AND ALLOW THE APPEAL BY THE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE OF THE I.T.A.T. INDORE TRIBUNAL, I DIRECT THE AO TO DECIDE THE MATTER AS PER LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. SMT.CHANDNA CHOPRA, UJJAIN VS. ITO, 1(2), UJJAIN I.T.A.NO. 90/IND/2015 A.Y. 2008-09 12 12 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 21 ST DECEMBER, 2015. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 21 ST DECEMBER, 2015. CPU*