ITO, Ward-1(1), Bhubaneswar V. Swastik Urban Resources Pvt. Ltd., Bhubaneswar

MA 38/CTK/2021

AI Insights

The case revolves around a miscellaneous application filed by the revenue against the order of the Income Tax Appellate Tribunal, Cuttack Bench, which had previously decided on ITA No.487/CTK/2017. The revenue contended that the Tribunal erred in applying a 30% disallowance instead of 100% as mandated by the Supreme Court's decision in Shree Choudhury Transport Company, which interpreted the amendment to Section 40(a)(ia) of the Income Tax Act, 1961, as prospective. However, the Tribunal, referencing the Supreme Court's decision in Vatika Township (P.) Ltd., argued that the amendment was retrospective as it aimed to alleviate the hardships faced by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127022 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 26-07-2021
• Other Referred Cases: Shree Choudhury Transport Company vs. 426 ITR 289 (SC), Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40(a)(ia)

Judgement Text

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER Miscellaneous Applicastion No.38/CT K/ 2021 ( Ar i s i n g o u t o f I T A N o . 4 8 7 / C T K / 2 0 1 7 ) (ननधाारण वषा / Asses s m ent Year :2013-2014) Swastik Urban Resources Pvt Ltd. 2 nd floor, B/23/1, Chandaka Industrial Estate, Patia, Bhubaneswar Vs ITO, Ward-1(2), Bhubaneswar PAN No. :AAQCS 5831 E (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri C.Parida, Advocate राजस्व की ओर से /Revenue by : Shri S.C.Mohanty, Sr.DR स ु नवाई की तारीख / Date of Hearing : 20/01/2023 घोषणा की तारीख/Date of Pronouncement : 20/01/2023 आदेश / O R D E R Per Bench : This miscellaneous application is filed by the revenue against the order of the coordinate bench of the Tribunal in ITA No.487/CTK/2017, dated 18.01.2021. 2. It was submitted by the ld. Sr. DR that in view of the decision of the Hon’ble Supreme Court in the case of Shree Choudhury Transport Company, 426 ITR 289 (SC), wherein it has been held that the amendment to the provisions of Section 40(a)(ia) of the Act was prospective in nature and not retrospective. It was the submission that consequently the disallowance as restricted to 30% is liable to be taken at M.A No.38/CTK/2021 2 100%. It was the submission that this is a mistake apparent from the order of the Tribunal which requires that the order of the Tribunal to be recalled. 3. In reply, ld. AR submitted that in para 19.6, the Hon’ble Supreme Court in the case of Shree Choudhury Transport Company(supra), has only held that the claim of the assessee therein is preposterous. The Hon’ble Supreme Court has not held that the amendment brought into the Finance Act, 2014 was not retrospective. It was the submission that there is no mistake apparent from the record of the Tribunal, which calls for any rectification. 4. We have considered the rival submissions. As rightly pointed out by the ld. AR that the Hon’ble Supreme Court in the case of Shree Choudhury Transport Company (supra), has not held the amendment brought by Finance (No.2) Act, 2014 to Section 40(a)(ia) of the Act, as not retrospective. In fact, as per the decision of the Hon’ble Supreme Court in the case of Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249 (SC), the issue has to be considered and as the amendment by the Finance (No.2) Act, 2014 made to the provisions of Section 40(a)(ia) of the Act has to remove the hardship caused to the assessee. When a provision is amended to remove the hardship to the assessee, it has to be read to be retrospective in nature. Consequently, as no error has been pointed out in the order of the Tribunal, the miscellaneous application filed by the revenue stands dismissed. M.A No.38/CTK/2021 3 5. In the result, miscellaneous application of the revenue stands dismissed. Order dictated and pronounced in the open court on 20/01/2023. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 20/01/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पवभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//