Chroma Print India Pvt . Ltd., Coimbatore V. JCIT, Coimbatore

MA 296/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5993 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: T N SEETHARAMAN

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , J UDICIAL MEMBER M.P. NO. 29 6 /MDS/2017 [IN I .T.A. NO. 2083 /MDS/2016 ] ASSESSMENT YEAR : 201 2 - 1 3 M/S. CHROMA PRINT INDIA PVT. LTD., P.B. NO. 5316, 53, GANESH NAGAR, G.N. MILLS POST, MTP ROAD, COIMBATORE. [PAN:AACCC6021A] VS. THE JOINT COMMISSIONER OF INC OME TAX, TDS RANGE, COIMBATORE. ( PETITIONER ) ( RESPONDENT ) PETITIONER BY : SHRI T.N. SEETHARAMAN , ADVOCATE RESPONDENT BY : SHRI B. SAGADEVAN , JCIT / DATE OF HEARING : 0 8 . 1 2 .201 7 / DATE OF P RONOUNCEMENT : 15 . 1 2 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS IS A MISCELLANEOUS PETITION U/S. 254(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT ) BY THE ASSESSEE, DIRECTED AGAINST THE ORDER BY THE TRIBUNAL DATED 13.10.2017 IN THE CAPTIONED APPEAL, DISPOSING THE REVENUE S APPEAL IN ITS CASE FOR ASSESSMENT YEAR 2012 - 13. 2. VIDE THE INSTANT PETITION THE ASSESSEE CLAIMS THE IMPUGNED ORDER TO BE VITIATED BY THE NON - CONSIDERATION OF IT S ARGUMENTS, WITH IN FACT ITS CASE BEING COVERED BY THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE M.P. NO. 29 6 / M/17 2 OF CIT VS. R. LAKSHMI NARAYANAN (IN TCA NO.1344 OF 2015) . THE T RIBUNAL, IT WAS SUBMITTED BY THE LD. AUTHORISED REPRESENTATIVE, THE ASSESSEE S COUNSEL, WHILE CORRECTLY APPRECIATING THAT COMMISSION PROFIT CREDITED ON 31.03.2012 TO THE ACCOUNT OF THE DIRECTORS ( . 64.30 LAKHS ) FORMS PART OF THEIR REMUNERATION, ASSESSABLE IN THEIR HANDS AS SALARY INCOM E, SO THAT PROVISION OF SECTION 192 OF THE ACT (INSTEAD OF SEC.194H ) SHALL APPLY (PARA 6.2) , YET, INCORRECTLY STATES (AT PARA 6.2 ), THAT IT IS NOT THE ASSESSEE S CASE THAT THE AMOUNT WAS APPROVED ONLY SUBSEQUENT TO THE CLOSE OF THE RELEVANT FINANCIAL YEAR ON 31.03.2012. THIS, IN FACT, IS PRECISELY THE ASSESSEE S CASE INASMUCH AS THE COMMISSION, BEING BASED ON PROFITS, STANDS TO BE DETERMINED ONLY ON THE CLOSURE OF THE ACCOUNTS FOR THE RELEVANT YEAR, MUCH LATER, WITH THE APPROVAL OF THE BOARD OF DIRECTORS ( BOD OR BOARD, FOR SHORT) BEING GRANTED ON 01.08.2012, TO WHICH REFERENCE WAS DRAWN DURING THE HEARING OF THE APPEAL (PB PG. 6A ). FURTHER, SECTION 192 OF THE ACT, MAKING A DEPARTURE FROM THE GENERAL RULE OF CREDIT OR PAYMENT, WHICHEVER IS EARLIER, FOR RECKO NING THE TIME OF DEDUCTION OF TAX AT SOURCE, OBLIGES THE PAYER TO DEDUCT TAX AT SOURCE ONLY ON PAYMENT, WHICH STANDS MADE IN THE INSTANT CASE ONLY AFTER THE APPROVAL OF THE COMMISSION (REMUNERATION) BY THE BOARD, ADVERTING TO FORM 26AS ACCOMPANYING THE RES PECTIVE RETURNS OF INCOME OF THE THREE PAYEES . THIS ASPECT, AGAIN, HAS NOT BEEN CONSIDERED BY THE T RIBUNAL. 3. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) WOULD OBJECT, STATING THAT THE T RIBUNAL HAVING CONSIDERED ALL THE ASPECTS OF THE MATTER, WHAT IS BEING M.P. NO. 29 6 / M/17 3 SOUGHT THUS IN THE PRESENT PETITION IS A REVIEW, IMPERMISSIBLE U NDER SECTION 254(2) OF THE ACT. TAX HAD IN FACT BEEN DEPOSITED ONLY AFTER DETECTION OF THE IRREGULARITY ON INSPECTION BY THE DEPARTMENT. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. 4.1 THE TRIBUNAL HAS, WITHOUT DOUBT, CONSIDERED THE ASSESSEE S FIRST ARGUMENT, SO THAT SAME COULD NOT BE REAGITATED IN THE PRESENT PROCEEDINGS. WE, HOWEVER, CONSIDER IT PROPER TO CLARIFY THAT THE ARGUMENT IS MISCONCEIVED. IF THE RIGHT TO RECEIVE, AS CONTENTED, ARISES TO THE DIRECTORS, ONLY ON DETERMINATION OF PROFITS AND APPROVAL OF THEIR COMMISSION BY BOARD OF DIRECTORS ON 01.08.2012 , HOW COULD ASSESSEE CLAIM A LIABILITY IN THIS RESPECT FOR THE YEAR ENDING 31.03.2012? AND ON WHICH BASIS DEDUCTION QUA THE REMUNERATION OF THE DIRECTORS STANDS , IN FACT, CLAIMED. THAT IS, HOW COULD ASSESSEE CLAIM A DEDUCTION IN RESPECT OF THE SAID REMUNERATION FOR THE CURRENT YEAR? WHY, THE PROFITS FOR THE YEAR WOULD, IN THAT CASE, ARISE ONLY THEREAT, I.E., A FTER THE CLOSE OF THE YEAR AND ON THE APPROVAL OF THE ACCOUNTS BY THE BOD. THE PROFIT FOR THE YEAR IS ONLY THE OPERATING STATEMENT FOR THE RELEVANT ACCOUNTING PERIOD. IT IS ONLY A SUMMATION OF THE TRANSACTIONS DURING THE YEAR, AND EVEN AS EXPLAINED IN CIT VS. ASHOKBHAI CHIMANBHAI [1965] 56 ITR 42 (SC) , ACCRUES ON THE LAST DATE OF THE ACCOUNTING YEAR. NO DOUBT, THE PROFIT , AS ACCRUED, STANDS TO BE QUANTIFIED LATER. IT IS ONLY FOR THE REASONS SUCH AS THIS THAT A PROVISION IS MADE IN THE ACCOUNTS, REPRESENTING THE BEST M.P. NO. 29 6 / M/17 4 ESTIMATE IN LIGHT OF THE INFORMATION AVAILABLE QUA THE STATE OF AFFAIRS AS AT THE CLOSE OF THE YEAR . THE SAME IS SUBJECT TO REVISION ON THE FINALIZATION OF THE ACCOUNTS, BOOKING THE DIFFERENCE, EITHER WAY, IN THE FOLLOWING YEAR. 4.2 THE ASSESSE E S SECOND ARGUMENT, I.E., QUA SEC. 192 OF THE ACT, HOWEVER, STANDS OMITTED TO BE CONSIDERED BY THE TRIBUNAL. THE SAME, PER SUB - SECTION (1) CLEARLY CASTS THE OBLIGATION FOR TAX DEDUCTION AT SOURCE ONLY ON PAYMENT. THERE IS, TO THAT EXTENT, CLEARLY A MISTA KE IN THE IMPUGNED ORDER. IF, AS CONTENTED, THE PAYMENT OF COMMISSION IS ON 30.09.2012, THE LIABILITY TO DEDUCT TAX THEREON ( 17,68,415/ - ) ARISES ON THAT DATE. THE DEPOSIT OF TAX ON 26.10.2012 WOULD THUS BE IN ORDER. WE OBSERVE, NOTWITHSTANDING THE REFLECTION OF THE TRANSACTION/S IN FORM 26AS AS ON 30.09.2012, NO FINDING QUA THE DATE OF PAYMENT OF COMMISSION IN TH E ORDERS OF THE REVENUE AUTHORITIES. THE IMPUGNED ORDER IS ACCORDINGLY MODIFIED. THE ASSESSING OFFICER SHALL DETERMINE THE DATE/S OF DEDUCTION OF TAX WITH REFERENCE TO THE DATE/S OF THE PAYMENT OF COMMISSION TO THE DIRECTOR/S AND DECIDE THE QUESTION OF LE VY OF PENALTY ON THE SAME AFRESH AFTER HEARING THE ASSESSEE. 4.3 NO ARGUMENT QUA THE BALANCE TDS OF . 1,60,585/ - WAS MADE EITHER DURING HEARING OF THE APPEAL OR IN THE PRESENT APPLICATION, SO THAT PENALTY THEREON OBTAINS. 4.4 WE DECIDE ACCORDINGLY. M.P. NO. 29 6 / M/17 5 5. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE STANDS ALLOWE D. ORDER PRONOUNCED ON THE 15 TH DECEMBER, 201 7 AT CHENNAI. SD/ - SD/ - ( SANJAY ARORA ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 15 . 12 .201 7 KV / COPY TO: 1. / APPELLANT , 2. / RES PONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.