Sri Alok Jana, Kolkata V. ITO,Ward-53(3), Kolkata, Kolkata

ITA 941/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83118 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2012
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU ACIT
• Keywords: Opportunity of being heard; Question of law
• Section: 143(3); 194C; 201(1)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO. 941/KOL/2012 #$ %&/ ASSESSMENT YEAR: 2008-09 SHRI ALOK JANA VS. INCOME-TAX OFFICER, WD-53(3 ), KOLKATA (PAN:AGOPJ4061C) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 29.08.2014 DATE OF PRONOUNCEMENT: 05.09.2014 FOR THE APPELLANT: SHRI SUNIL SURANA, FCA FOR THE RESPONDENT: SHRI DAVID Z. CHAWNGTHU, ACI T, SR. DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXIII, KOLKATA IN APPEAL NO. 205/CIT(A)-XXXIII/ITO/WD-53(3),KOL/10-11 DATED 13.03.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-53(3), KOLKATA U/S. 143(3) OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORD ER DATED 23.12.2010. 2. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE I S AGAINST THE ORDER OF CIT(A) CONFIRMING DISALLOWANCE MADE BY AO, OF TRANSPORTATION CHARGES CLAIMED BY ASSESSEE, FOR NON-DEDUCTION OF TDS U/S. 194C OF THE ACT BY INVOKING PROVISION OF S ECTION 40(A)(IA) OF THE ACT. THE FIRST ISSUE RAISED BY ASSESSEE IS THAT NO AMOUNT IS PAYABLE TO THE PARTIES AND ENTIRE AMOUNT IS PAID DURING THE YEAR AND HENCE, PROVISION OF SECTION 40(A)(IA) OF THE ACT WILL NOT APPLY. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS.2: 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF TRANSPORT CHARGES OF RS.22,60,086/- UNDER SEC. 40(A)(IA) OF THE I. T. AC T, 1961 WHEN NO AMOUNT WAS PAYABLE TO THE PARTIES, THE EXPENSES WERE PAID DURING THE YEAR AND HENCE NO DISALLOWANCE WAS CALLED FOR. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE STATED THAT THIS ISSUE IS NOW COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE IN ITAT NO. 20 OF 2013 IN GA 190 OF 2013 DATED 3 RD APRIL, 2013, WHEREIN DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF ME RILYN SHIPPING & TRANSPORT LTD. VS. ACIT, ITA NO. 477/VIZAG/2008, VISHAKHAPATNAM BENCH OF ITA T IS REVERSED. ON THIS, LD. COUNSEL 2 ITA NO.941/K/2012 ALOK JANA AY 2008-09 FOR THE ASSESSEE HAS NOTHING TO SAY. HENCE, THIS I SSUE IS DISMISSED BEING COVERED BY JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT. . 4. THE SECOND ISSUE ON THIS ASPECT IS RAISED WAS, T HAT, THERE IS NO CONTRACT FOR HIRING OF TRUCKS FOR THE REASON THAT TRUCKS WERE HIRED ON NEE D BASIS. FOR THIS, ASSESSEE RAISED FOLLOWING GROUND NO.3: 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE TRUCK HIRE CHARGES PAID TO OTHER TRUCK OWNERS BY APPLYING SECTION 40(A )(IA) WHEN THERE WAS NO CONTRACT ORALLY OR IN WRITING, THE TRUCKS WERE HIRED AS AND WHEN NE ED AROSE AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE WAS NOT LIAB LE TO DEDUCT ANY TAX ON THE PAYMENTS MADE TO THE TRUCK OWNERS. 5. THIS ISSUE HAS BEEN DECIDED BY THIS TRIBUNAL IN THE CASE OF DCIT VS. KAMAL MUKHERJEE & CO. (SHIPPING) (P) LTD. ITA NO. 199/KOL/2010, WHE REIN IT IS HELD AS UNDER: (FROM HEAD NOTES) .UNDOUBTEDLY, THESE DECISIONS DO INDICATE THAT T HERE IS A WORKMAN EMPLOYER RELATIONSHIP BETWEEN THE DOCK WORKERS AND THE STEVEDORES LIKE ASSESSEE WHEN THEY EMPLOY THOSE WORKERS, BUT BE THA T AS IT MAY, THE FACT REMAINS THAT THE ASSESSEE HAS MADE PAYMENTS TO THE CDLB FOR SUPPLY OF LABOUR, EVEN WHEN THIS LABOUR MAY BE TREATED AS EMPLOYED BY THE ASSESSEE FOR ALL PRACTICAL PURPOSES, THE PROVISIONS OF SECTION 194C ARE CLEARLY ATTRACTED. IN SUCH A SITUATION, I.E. WHEN LABOUR HIRED BY THE ASS ESSEE THROUGH CDLB IS CONSIDERED TO BE IN ASSESSEES EMPLOYMENT, THE PAYM ENTS MADE TO CDLB CANNOT BE TREATED AS PAYMENTS FOR ANY WORK, BUT NEVERTHELE SS THESE PAYMENTS COULD STILL BE COVERED BY THE PROVISIONS OF SECTION 194C BECAUSE THESE ARE PAYMENTS MADE FOR SUPPLY OF LABOUR WHICH ARE SPECIFICALLY CO VERED BY SECTION 194C(1). CDLB IS AN AGENT OF THE STEVEDORES LIKE THE ASSESSE E IN THE SENSE THAT THE LABOUR IS RECRUITED BY THE ASSESSEE THROUGH CDLB, B UT WHEN THIS FACT DOES NOT AFFECT THE NATURE OF PAYMENT BY THE ASSESSEE TO THE CDLB WHICH IS ADMITTEDLY IN THE NATURE OF PAYMENT FOR SUPPLY OF LABOUR. THE REA SONING ADOPTED BY THE COMMISSIONER (APPEALS), THOUGH SOMEWHAT IMPRESSIVE AT FIRST GLANCE, IS FALLACIOUS. THERE IS NO CAUSE AND EFFECT RELATIONSH IP BETWEEN WORKERS ASSIGNED BY THE CDLB HAVING EMPLOYER WORKMAN RELATIONSHIP WI TH THE ASSESSEE, AND THE PAYMENTS BEING MADE BY THE ASSESSEE TO CDLB BEING N OT IN THE NATURE OF PAYMENT FOR SUPPLY OF LABOUR. 4. SINCE THE FACTS AND CIRCUMSTANCES ARE EXACTLY ID ENTICAL, WHAT WAS BEFORE US IN KAMAL MUKHJERJEE & CO. (SHIPPING) (P.) LTD. ( SUPRA) AND ALSO THAT IN THE CASE OF SMT. J. RAMA OF HONBLE KARNATAKA HIGH COUR T (SUPRA), RESPECTFULLY FOLLOWING THE SAME, WE ARE OF THE VIEW THAT EVEN OR AL CONTRACT IS SUFFICIENT AND ADMITTEDLY THE ASSESSEE HAS TAKEN THE DUMPERS ON HI RE AND HE HAS PAID CHARGES FOR THE SAME. RESPECTFULLY FOLLOWING THE SAME, WE C ONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND REVERSE THE ORDER OF CIT(APPEALS). HOWEVER, AS REGARD TO ALTERNATIVE ARGUMENTS MADE BY LD. COUN SEL FOR THE ASSESSEE REGARDING APPLICABILITY OF THE DECISION OF ITAT, SP ECIAL BENCH, VISHAKHAPATNAM IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL. CIT (VISAKH APATNAM) (SB) REPORTED IN (2012) 136 ITD 23 (SB), WHEREIN IT IS HELD THAT THE DISALLOWANCE WILL BE RESTRICTED TO THE AMOUNT PAYABLE AT THE END OF YEAR AND NOT ON THE AMOUNT ALREADY PAID DURING THE RELEVANT YEAR. LD. C OUNSEL FOR THE ASSESSEE BEFORE US STATED THAT THIS PAYMENT WAS MADE WITHIN THE DUE DATE AND NOTHING REMAINS PAYABLE AND HE RELIED ON THE DECISION OF SPECIAL BE NCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS VS. ADDL. CIT (VISAKH APATNAM) (SB) REPORTED IN (2012) 136 ITD 23 (SB), WHEREIN IT IS HELD THAT THE TDS IS TO BE DEDUCTED ONLY IN RELATION TO PAYMENTS WHICH REMAINS PAYABLE AT THE END OF THE YE AR I.E. 31 ST MARCH OF THE RELEVANT 3 ITA NO.941/K/2012 ALOK JANA AY 2008-09 FINANCIAL YEAR. IT WAS POINTED OUT TO LD. COUNSEL THAT THE OPERATION OF THE ORDER OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPP ING & TRANSPORTS (SUPRA), IS STAYED BY HONBLE ANDHRA PRADESH HIGH COURT IN I.T.T.A.M.P. N O.908 OF 2012 IN I.T.T.A. NO.384 OF 2012 WHEREIN HONBLE HIGH COURT OBSERVED, INTERIM SUSPENSION. NOTICE. VIDE DATED 8 TH OCTOBER, 2012. 5. ON THIS, THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT EFFECT OF THE ORDER STAYING A PENDING APPEAL BEFORE ANY HIGH COURT DOES NOT AMOUN T TO ANY DECLARATION OF LAW BUT IS ONLY BINDING UPON THE PARTIES TO THAT PROCEEDINGS A ND SUCH INTERIM ORDER DOES NOT DESTROY THE BINDING EFFECT OF THE PRINCIPALS AS LAID DOWN I N THE ORDER AS A PRECEDENT BECAUSE THE INTERIM ORDER HAD NO OCCASION TO LAY DOWN ANY PROPO SITION OF LAW. FOR THIS PROPOSITION, HE RELIED ON THE CASE LAW OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF PIJUSH KANTI CHOWDHURY VS. STATE OF WEST BENGAL & ORS (2007) 2 C ALLT 577 DATED 14 TH MAY, 2007 WHEREIN, AT PARA 10 AND 13, IT HAS BEEN HELD AS UND ER: 10. AFTER HEARING THE LEARNED COUNSEL FOR THE PART IES AND AFTER GOING THROUGH THE AFORESAID PROVISION WE FIND THAT THE SUPREME CO URT BY THOSE INTERIM ORDERS HAS NO DOUBT STAYED THE OPERATION OF THE ORDER OF THE D IVISION BENCH OF THIS COURT BY DIRECTING THE PARTIES TO MAINTAIN STATUS QUO AND AT THE SAME TIME, EVEN RESTRAINED THE STATE FROM INDUCTING THIRD PARTIES ON THE LANDS WHICH WERE THE SUBJECT-MATTERS BEFORE THE APEX COURT. SUCH INTERIM ORDER IS BINDIN G UPON THE PARTIES TO THE PROCEEDINGS BUT THE LAW IS EQUALLY SETTLED THAT BY MERE PASSING OF AN INTERIM ORDER STAYING THE OPERATION OF A JUDGMENT WITH CERTAIN FU RTHER CONDITIONS, THE EXISTENCE OF THE SAID JUDGMENT IS NOT WIPED OUT AND AT THE SAME TIME, FOR SUCH INTERIM ORDERS INTER PARTIES, THE AUTHORITY OF A DECISION AS A PRE CEDENT IS NEVER UNDERMINED. UNLESS A DECISION IS SET ASIDE BY THE SUPERIOR COURT, THE SAID DECISION REMAINS BINDING AS A PRECEDENT THOUGH MAY NOT BE BINDING UPON THE PARTIE S TO THE PROCEEDINGS WHERE THE SUPERIOR COURT HAS GRANTED INTERIM ORDER. MOREOVER, ONCE A PROVISION HAS BEEN DECLARED ULTRA VIRES THE CONSTITUTION OF INDIA, THE STATE CANNOT INVOKE THE SAID ULTRA VIRES PROCEEDING AGAINST THE CITIZENS OF THE COUNTR Y SIMPLY BECAUSE AN INTERIM ORDER OF STAY OF OPERATION ORDER DECLARING THE PROVISION AS ULTRA VIRES HAS BEEN PASSED IN AN APPEAL AGAINST SUCH ORDER. THE OBJECT OF GRANTIN G INTERIM ORDER I TO SEE THAT THE RELIEF CLAIMED IN THE APPEAL MAY NOT BECOME INAPPRO PRIATE OR THE APPEAL DOES NOT BECOME INFRUCTUOUS FOR NOT GRANTING SUCH INTERIM OR DER; BUT BY MERE GRANT OF INTERIM STAY, THE EFFECT OF A BINDING PRECEDENT IS NOT DESTABILIZED. OVER AND ABOVE, THE INTERIM ORDERS OF THE STAY GRANTED BY THE SUPRE ME COURT CLEARLY INDICATE THAT THE SAID COURT NEVER INTENDED THAT NOTWITHSTANDING THE DECISION OF THE HIGH COURT DECLARING A PART OF THE PROVISIONS OF VESTING AS UL TRA VIRES THE STATE WOULD NEVERTHELESS BE FREE TO PROCEED WITH THE PROCESS OF VESTING DURING THE PENDENCY O THE PROCEEDINGS BEFORE THE SUPREME COURT AND THAT IS WH Y STATUS QUO AS REGARDS POSSESSION HAS BEEN MAINTAINED AND EVEN, THE STATE HAS BEEN RESTRAINED FROM CREATING ANY THIRD PARTY INTEREST IN THE LANDS IN Q UESTION. 13. THEREFORE, THE EFFECT OF THE ORDER OF STAY IN A PENDING APPEAL BEFORE THE APEX COURT DOES NOT AMOUNT TO ANY DECLARATION OF LA W BUT IS ONLY BINDING UPON THE PARTIES TO THE SAID PROCEEDINGS AND AT THE SAME TIM E, SUCH INTERIM ORDER DOES NOT DESTROY THE BINDING EFFECT OF THE JUDGMENT OF THE H IGH COURT AS A PRECEDENT BECAUSE WHILE GRANTING THE INTERIM ORDER, THE APEX COURT HA D NO OCCASION TO LAY DOWN ANY PROPOSITION OF LAW INCONSISTENT WITH THE ONE DECLAR ED BY THE HIGH COURT WHICH IS IMPUGNED. 6. EVEN, HONBLE SUPREME COURT IN THE CASE SHREE CH AMUND MOPEDS LTD. VS. CHURCH OF SOUTH INDIA TRUST ASSOCIATION, MADRAS, AIR 1992 SC 1439, 1444 HAS ANALYSED THE DIFFERENCE BETWEEN STAY OF OPERATION OF AN ORDER AND QUASHINGOF AN ORDER AND HELD THAT STAY OF ORDER OF AN APPELLATE AUTHORITY / COURT BY A HIGHER COU RT MEANS THAT THE ORDER PASSED BY THE APPELLATE AUTHORITY / LOWER COURT STI LL CONTINUES TO EXIST IN LAW INSPITE OF THE 4 ITA NO.941/K/2012 ALOK JANA AY 2008-09 STAY AND ITS EXISTENCE IS NOT DESTROYED. BUT WHERE THE ORDER OF THE APPELLATE / LOWER COURT IS QUASHED AND THE MATTER IS REMANDED BACK, IT MEAN S THAT THE APPEAL DISPOSED OF BY THE SAID ORDER OF THE APPELLATE AUTHORITY/LOWER COURT W OULD BE RESTORED AND IT CAN BE SAID TO BE PENDING BEFORE THE SAID AUTHORITY/LOWER COURT. 7. IN VIEW OF THE ABOVE, PARTICULARLY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PIJUSH KANTI CHOWDHURY (SUPRA) , AS ALSO IN OBEDIENCE TO DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SHREE CHAM UND MOPEDS LTD. (SUPRA), WE ARE OF THE VIEW THAT THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA) STILL HOLDS GROUND A ND ACCORDINGLY, TDS PROVISIONS WILL APPLY, FOR THE PURPOSE OF INVOCATION OF THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT, ONLY ON THE AMOUNTS REMAINED PAYABLE AT THE END OF FINAN CIAL YEAR AND NOT ON THE PAID AMOUNTS. HENCE, WE DIRECT THE AO TO RECOMPUTE THE DISALLOWANCE ACCORDINGLY. APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 6. AS THE ISSUE IS COVERED AGAINST THE ASSESSEE AND WHEN THIS WAS CONFRONTED, LD. COUNSEL FOR ASSESSEE COULD NOT ARGUE ON THIS POINT. HENCE, THIS IS ALSO DISMISSED. 7. ALTERNATIVE PLEA MADE BY ASSESSEE IS THAT ASSESS EE BEING AN INDIVIDUAL AND ASSESSMENT YEAR INVOLVED IS 2008-09. ACCORDING TO LD. COUNSEL FOR ASSESSEE, THE AMENDMENT WAS BROUGHT IN STATUTE BOOK, WHEREIN THE INDIVIDUAL WAS MADE LI ABLE TO DEDUCT TDS W.E.F. 01.06.2007 IN THE PROVISIONS OF SECTION 194C(1) OF THE ACT BY FINANCE ACT, 2007 W.E.F. 01.06.2007. THIS ISSUE HAS BEEN DECIDED BY THIS KOLKATA TRIBUNAL AND AFFIRMED BY HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT V SHRI RINKU MALLICK, ITAT NO. 96 OF 2012 IN G.A. NO. 1368 OF 2012 DATED 15.06.2012 WHEREIN FOLLOWING SUBSTANTIAL QUESTION OF LAW WAS D ECIDED BY HON'BLE COURT: 'II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THE ASSESSEE IS AN INDIVIDUAL DES PITE THE FACT THAT THE PROVISION OF SECTION 194C(1) IS APPLICABLE TO AN INDIVIDUAL WITH EFFECT FROM 1.6.2007 WHICH IS CONTRARY TO THE ASSESSMENT YEAR INVOLVED IN THE INS TANT CASE.' AND THE HON'BLE HIGH COURT DISMISSED THE REVENUE'S APPEAL BY OBSERVING AS UNDER: 'WE HAVE HEARD THE LD. COUNSEL SMT. SINHA (DAS DE), APPEARING FOR THE APPELLANT, AND WE HAVE GONE THROUGH THE IMPUGNED JUDGMENT AND ORDER. WE AR E OF THE VIEW THAT THIS APPEAL DOES NOT REQUIRE ADMISSION FOR HEARING AS THE APPLICABILITY OF LAW INVOLVED HEREIN IS ADMITTEDLY SETTLED. IT IS ADMITTED POSITION THAT THE MATTER RELATES TO THE AS SESSMENT YEAR 2006-07, WHEREAS SECTION 194C(1) HAS BEEN MADE APPLICABLE TO THE INDIVIDUAL ASSESSEE WITH EFFECT FROM 1.6.2007. THERE IS NO DISPUTE THAT THE RESPONDENT IS AN INDIVIDUAL ASSESSEE. CONSIDERING THE POSITION OF THE LAW, THE LEARNED TR IBUNAL HAS CONSISTENTLY HELD THAT SECTION 194C(1) CANNOT BE MADE APPLICABLE FOR THE ASSESSMEN T YEAR 2006-07.' 8. IN VIEW OF THE ABOVE PROPOSITION OF LAW LAID DOW N BY HONBLE CALCUTTA HIGH COURT, WE FIND THAT ASSESSEE CREDITED AMOUNTS ON OR BEFORE 01 .06.2007 TO THE EXTENT OF RS.9,79,799/- OUT OF THE REMAINING DISALLOWANCE OF RS.22,60,086/-. L D. COUNSEL FOR THE ASSESSEE FILED COPIES OF LEDGER ACCOUNTS AND DETAILS OF AMOUNT CREDITED BEFO RE 01.06.2007. THIS ISSUE IS RAISED FOR THE 5 ITA NO.941/K/2012 ALOK JANA AY 2008-09 FIRST TIME BEFORE US, HENCE, WE ARE ADMITTING THE S AME AND SET ASIDE THE ISSUE FOR VERIFICATION TO THE FILE OF AO. IN CASE PAYMENTS ARE MADE BEFORE 0 1.06.2007, AO WILL DELETE THE SAME. HENCE, THIS ISSUE IS PARTLY SET ASIDE TO THE FILE OF THE A O FOR FRESH ADJUDICATION AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 9. ANOTHER ALTERNATIVE ARGUMENT RAISED BY THE ASSES SEE FOR THE BALANCE ADDITION IS THAT THE ISSUE IS DECIDED BY HONBLE SUPREME COURT IN THE CA SE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. VS. CIT (2007) 293 ITR 226 (SC), WHEREIN IT IS HELD AS UNDER: THE TRIBUNAL UPON REHEARING THE APPEAL HELD THAT TH OUGH THE APPELLANT/ASSESSEE WAS RIGHTLY HELD TO BE AN ASSESSEE IN DEFAULT, THERE COULD BE NO RECOVERY OF THE TAX ALLEGED TO BE IN DEFAULT ONCE AGAIN FROM THE APPELLANT CON SIDERING THAT PRADEEP OIL CORPORATION HAD ALREADY PAID TAXES ON THE AMOUNT RECEIVED FROM THE APPELLANT. IT IS REQUIRED TO NOTE THAT THE DEPARTMENT CONCEDED BEFORE THE TRIBUNAL TH AT THE RECOVERY COULD NOT ONCE AGAIN BE MADE FROM THE TAX DEDUCTOR WHERE THE PAYEE INCLU DED THE INCOME ON WHICH TAX WAS ALLEGED TO HAVE BEEN SHORT DEDUCTED IN ITS TAXABLE INCOME AND PAID TAXES THEREON. THERE IS NO DISPUTE WHATSOEVER THAT PRADEEP OIL CORPORATI ON HAD ALREADY PAID THE TAXES DUE ON ITS INCOME RECEIVED FROM THE APPELLANT AND HAD RECE IVED REFUND FROM THE TAX DEPARTMENT. THE TRIBUNAL CAME TO THE RIGHT CONCLUSION THAT THE TAX ONCE AGAIN COULD NOT BE RECOVERED FROM THE APPELLANT (DEDUCTOR-ASSESSEE) SINCE THE TA X HAS ALREADY BEEN PAID BY THE RECIPIENT OF INCOME. THE HIGH COURT INTERFERED WITH THE ORDER PASSED BY THE TRIBUNAL ON THE GROUND THAT THE ORDER DATED JULY 12, 2002, OF THE INCOME-TAX APPELL ATE TRIBUNAL HAS ATTAINED ITS FINALITY SINCE THE APPEAL FILED AGAINST THE SAME BY THE APPE LLANT WAS DISMISSED BY THE HIGH COURT ON MAY 21, 2004; THE POINT BASED ON GROUND NO. 7 WA S NOT TAKEN UP IN THE APPEAL PREFERRED BY THE APPELLANT IN THE HIGH COURT. THE H IGH COURT FURTHER HELD THAT THE INCOME TAX APPELLATE TRIBUNALS ORDER DATED JULY 12 , 2002, GOT ITSELF MERGED INTO THE ORDER PASSED BY IT ON MAY 21, 2004, DISMISSING THE APPEAL OF THE APPELLANT HEREIN. THE HIGH COURT CAME TO THE CONCLUSION THAT THE TRIBUNAL COULD NOT HAVE REOPENED THE MATTER FOR ANY FURTHER HEARING. WE HAVE ALREADY NOTICED THAT THE ORDER PASSED BY TH E TRIBUNAL TO REOPEN THE MATTER FOR FURTHER HEARING AS REGARDS GROUND NO. 7 HAS ATTAINE D ITS FINALITY. IN THE CIRCUMSTANCES, THE HIGH COURT COULD NOT HAVE INTERFERED WITH THE F INAL ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL. BE THAT AS IT MAY, CIRCULAR NO. 275/201/95-IT(B) DA TED JANUARY 29, 1997, ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IN OUR CONSIDERED OP INION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES NO DEMAND VISUA LIZED UNDER SECTION 201(1) OF THE INCOME- TAX ACT SHOULD BE ENFORCED AFTER THE TAX DE DUCTOR HAS SATISFIED THE OFFICER-IN- CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE-ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARGE INTEREST UND ER SECTION 201(1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE-ASSESSEE OR THE LIABILITY FOR PENALTY UNDER SECTION 271C OF THE INCOME-TAX ACT. 10. LD. COUNSEL FOR THE ASSESSEE STATED THAT FOR TH E BALANCE OF THE PAYMENTS OF TRANSPORTATION CHARGES ARE ALREADY INCLUDED BY THE RESPECTIVE RECI PIENT IN THEIR RETURNS OF INCOME AND HENCE, IN TERMS OF THE DECISION OF HONBLE SUPREME COURT IN T HE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD., SUPRA AND CIRCULAR OF CBDT NO. 275/201/95- IT(B) DATED JANUARY 29, 1997, NO DEMAND 6 ITA NO.941/K/2012 ALOK JANA AY 2008-09 VISUALISED U/S. 201(1) OF THE ACT CANNOT BE ENFORCE D AFTER THE TAX DEDUCTOR SATISFIES THE REVENUE THAT TAXES DUE HAVE BEEN PAID BY THE RECIPIENTS OF INCOME IN THEIR RESPECTIVE RETURNS OF INCOME. WE FIND THE PLEA OF THE ASSESSEE AS REASONABLE BUT THE FACTS ARE NOT AVAILABLE BEFORE US AND THIS REQUIRES VERIFICATION AT THE LEVEL OF THE AO, WHETH ER THE RECIPIENTS OF INCOME QUA THE TRANSPORT EXPENSES CLAIMED BY THE ASSESSEE HAVE BEEN DECLARED AND TAXES HAVE BEEN PAID. IF THE ASSESSEE IS ABLE TO SATISFY THE AO, THEN, THE AO WILL DELETE THE DISALLOWANCE ACCEPTING THE CLAIM OF THE ASSESSEE. NOW, EVEN THE LEGISLATURE HAS AMENDED TH E PROVISIONS OF SECTION 40(A)(IA) OF THE ACT BY BRINGING 2ND PROVISO IN THIS PROVISION INSERTING BY THE FINANCE ACT, 2012 W.E.F. 1.4.2013 EXPLAINING THE PROVISION, WHICH READS AS UNDER: PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO D EDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO T O SUB-SECTION (1) OF SECTION 201, THEN, FOR THE PURPOSE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISHING OF RE TURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. IN SUCH SITUATION, IF THE ASSESSEE CANNOT BE TREATE D AS ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT, IN TERM OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD., SUPRA, TAKING SAME ANALOGY, WE DI RECT THE AO TO FIND OUT, WHETHER THE RECIPIENTS OR THE PAYEES HAVE INCLUDED THE INCOME I N THEIR RESPECTIVE RETURNS OF INCOME OR NOT. AND IN THE EVENTUALITY OF INCLUDING THE INCOME BY T HE PAYEES IN THEIR RESPECTIVE RETURNS OF INCOME, THE AO WILL DELETE THE DISALLOWANCE MADE IN THE HANDS OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE AS SESSEE HAS TO PRODUCE COMPLETE EVIDENCE IN RESPECT TO THE RECIPIENTS OF INCOME QUA THE EXPENSE S CLAIMED BY THE ASSESSEE, WHICH WERE DISALLOWED BY AO BY INVOKING THE PROVISIONS OF SECT ION 40(A)(IA) OF THE ACT. IN TERM OF THE ABOVE, THIS ISSUE IS SET ASIDE TO THE FILE OF AO FO R FRESH ADJUDICATION AFTER ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALL OWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 12. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05.09. 2014. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5 TH SEPTEMBER, 2014 ,- #./ 0 JD.(SR.P.S.) 7 ITA NO.941/K/2012 ALOK JANA AY 2008-09 1 *2 3 2%4- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT SHRI ALOK JANA, LP-224/5, NAWA PALLY, M ANARAMA PARK, 71, SANGHA CLUB, THAKURPUKUR, KOLKATA-700 104 2 *+() / RESPONDENT ITO, WARD-53(3), KOLKATA 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 2:; *# / DR, KOLKATA BENCHES, KOLKATA +2 */ TRUE COPY, #