Harbhajan Singh, Prop:- Hindustan Tyres, Durgapur V. DCIT, Circle-2, Durgapur, Durgapur

MA 24/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9705 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 44AB

Judgement Text

1 M A NO . 24 / KOL /20 20 HARBHAJAN SINGH , AY - 20 1 3 - 1 4 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( . . , . . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM ] MA NO. 24 /KOL/20 20 IN I.T.A. NO. 1 1 06 /KOL/20 1 7 ASSESSMENT YEAR: 20 1 3 - 1 4 HARBHAJAN SINGH (PAN: AJWPS2289Q) VS. DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 2, DURGAPUR . APPLICANT RESPONDENT DATE OF HEARING 0 3 .0 7 .20 20 DATE OF PRONOUNCEMENT 07 .0 7 .20 20 FOR THE APPLICANT N O N E FO R THE RESPONDENT SHRI JAYANTA KHANRA, JCIT ORDER PER SHRI A. T. VARKEY, JM: THIS MISC. APPLICATION FILED BY THE ASSESSEE AGAINST THE ORDER OF THIS TRIBUNAL DATED 31.10.2019 FOR AY 2013 - 14. IN THE IMPUGNED ORDER OF THE TRIBUNAL, IT WAS HELD AS UNDE R: 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.42,91,066/ - MADE BY THE AO ON THE GROUND THAT ASSESSEE HAS NOT DEDUCTED THE TDS ON THE PAYMENTS MADE TO HIS 8 (EIGHT) SUB - AGENTS. 3. A T THE OUTSET ITSELF, SHRI PREM NARAYAN KHANDELWAL, FCA, LD.AR FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE ASSESSEE MADE THE PAYMENTS IN QUESTION BY CHEQUE(S) TO ITS 8 (EIGHT) SUB - AGENTS. HE FURTHER DREW OUR ATTENTION TO PAGE - 83 OF THE PAPER BOOK TO SUB STANTIATE AND CORROBORATE THIS FACT. IT WAS ALSO BROUGHT TO OUR NOTICE THAT SUB - AGENTS TO WHOM THE PAYMENTS WERE MADE ARE ALL INCOME - TAX ASSESSEE AND THAT THEY ALL HAVE FILED THEIR RESPECTIVE I.T RETURNS REFLECTING THE AMOUNT(S) GIVEN BY THE ASSESSEE. IN S UCH SCENARIO, ACCORDING TO LD. AR THE ACTION OF AO TO DISALLOW THE EXPENDITURE BY INVOKING U/S. 40(A)(IA) OF THE INCOME - TAX ACT, 1961 ( HEREINAFTER IN SHORT, THE ACT) WAS NOT WARRANTED. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL INCLUDI NG THE PAPER BOOK. WE FIND FORCE IN THE SAID AFORESAID CONTENTIONS OF THE LD. AR. THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND REMAND THE MATER BACK TO THE FILE OF THE AO TO VERIFY THE FACTS AS TO WHETHER THE RECIPIENTS ( 8 SUB - AGENTS) OF THE PAYMENTS IN QUESTION HAVE BEEN PAID BY THE ASSESSEE BY WAY OF CHEQUE AND THAT ALL THE RECIPIENTS HAVE SHOWN THEIR RESPECTIVE RECEIPTS IN THEIR RESPECTIVE I.T RETURNS OF INCOME AND HAS PAID TAXES ON IT. IF THE ASSESSEE IS ABLE TO DISCHARGE THE PROOF OF THIS FACTS AS CONTEMPLATED BY LAW, THEN NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT NEED TO BE MADE OF RS. 42,91,066/ - . WITH THIS LIMITED OBSERVATION, WE REMAND THIS MATTER BACK TO THE FILE OF THE AO TO VERIFY THIS FACT AND DECIDE THE MATTER IN ACCORDANCE WITH LAW. 2 M A NO . 24 / KOL /20 20 HARBHAJAN SINGH , AY - 20 1 3 - 1 4 2. BY PREFERRING THIS MISC. APPLICATION , THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE FINDING OF THE AO THAT THERE WAS VIOLATION OF SECTION 194D OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IS ERRONEOUS AND IN THE FA CTS OF THE ASSESSEES CASE THE PAYMENTS MADE BY THE ASSESSEE MAY ATTRACT ONLY SECTION 194H OF THE ACT (I.E. THE PAYMENT OF COMMISSION). FURTHER, AC CORDING TO ASSESSEE , ONCE IT IS DETERMINED THAT IN THE CASE OF ASSESSEE SECTION 194H OF THE ACT IS ONLY ATTR ACTED , THEN THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS SINCE IT IS THE FIRST YEAR AND ONLY YEAR WHERE IN THE TAX AUDIT HAS BEEN CONDUCTED. ACCORDING TO THE ASSESSEE, TILL THE PREVIOUS ASSESSMENT YEAR , NO TAX AUDIT HAS BEEN DONE AND , THEREFORE, THE PROVI SO U/S 194H OF THE ACT COMES INTO PLAY AND THE ASSESSEE IS EXEMPT FROM DEDUCTING TAX AT SOURCE . THE PROVISO TO SECTION 194H OF THE ACT READS AS UNDER: PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH COMMISSION OR BROKERAGE IS CREDI TED OR PAID, SHALL BE LIABLE TO DEDUCT INCOME - TAX UNDER THIS SECTION. 3. FROM A PERUSAL OF THE IMPUGNED ORDER OF THE TRIBUNAL IS CONCERNED , IT IS NOTED THAT BEFORE US NO SUCH CONTENT ION WAS TAKEN BY THE LD. AR AS TO WHETHER THE AO ERRONEOUSLY FOUND THAT T HE ASSESSEE WHILE MAKING THE PAYMENT HAS VIOLATED SECTION 194D OF THE ACT AND, THE QUESTION OF DETERMINATION WHETHER IN THE CASE OF ASSESSEE, SECTION 194H WOULD BE ATTRACTED OR THE ACTION OF AO WAS CORRECT, WAS NOT ARGUED. T HEREFORE, THIS TRIBUNAL BASED ON THE SUBMISSIONS OF THE ASSESSEE HAD GONE AHEAD TO PASS THE IMPUGNED ORDER (SUPRA). THEREFORE, IN ORDER TO EXAMINE THIS ISSUE AS TO WHETHER THE DISALLOWANCE U/S. 194D OF THE ACT IS CORRECT OR NOT HAS TO BE ADJUDICATED ; AND WHETHER THE ASSESSEES CONTEN TION THAT IN THE FACTS OF HIS CASE , THE REQUIREMENT OF LAW IS ONLY SEC TION 194H OF THE ACT IS ATTRACTED AND THEN ASSESSEE WILL BE ABLE TO AVAIL THE BENEFIT OF PROVISO (SUPRA) NEED TO BE EXAMINED . FOR ADJUDICATING THIS QUESTION, WE RECALL THE ORDER PASSED BY THE TRIBUNAL ON 31.10.2019 AND DIRECT THE REGISTRY TO FIX THE APPEAL IN DUE COURSE . 4 . IN THE RESULT, MISC. APPLICATION OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 07 JULY, 2020 SD/ - SD/ - ( D R . A . L. SAINI) ( ABY. T. VA RKEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07 JULY, 2020 3 M A NO . 24 / KOL /20 20 HARBHAJAN SINGH , AY - 20 1 3 - 1 4 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI HARBHAJAN SINGH, PROP. M/S. HINDUSTAN TYRES, MAIN GATE. G. T. ROAD, WARIA, DURGAPUR - 713203, BURDWAN (WB_ 2 RESP ONDENT D CIT, CIRCLE - 2, DURGAPUR . 3. 4. CIT (A) - DURGAPUR (SENT THROUGH E - MAIL) CIT - DURGAPUR , KOLKATA. 5 . DR, ITAT, KOLKATA. (SENT THROUGH E - MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR