MAHINDRA & MAHINDRA LTD, MUMBAI V. DCIT RG 2(2), MUMBAI

MA 485/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5710 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 27-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H P MAHAJANI
• Assessee Lawyers: SUTYA PINISHETTY
• Keywords: Opportunity of being heard; Set aside
• Section: 40(a)(ia); 201

Judgement Text

P A G E | 1 M.A. NO. 485/MUM/2019 AY. 2007 - 08 (ARISING OUT OF ITA NO.382/MUM/2017) MAHINDRA & MAHINDRA LTD. VS. DCIT, RANGE - 2(2) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER A ND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A. NO. 485/MUM/2019 (ARISING OUT OF ITA NO.382 /MUM/2017 ) (ASSESSMENT YEARS: 2007 - 08 ) MAHINDRA & MAHINDRA LTD. MAHINDRA TOWERS, WORLI, MUMBAI 400018 VS. DCIT, RANGE - 2(2) AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400020 MAHARASHTRA PAN AAACM3025E (APPLICANT) (RESPONDENT) APPLICANT BY: SHRI SUTYA PINISHETTY , A.R RESPONDENT BY: SHRI H.P. MAHAJANI , D.R DATE OF HEARING: 22.11 .2019 DATE OF PRONOUNCEMENT: 3 1 .01.2020 O R D E R PER RAVISH SOOD, JM: THE PRESENT MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ON 25.08.2019 ARISES FROM THE ORDER PASSED BY THE TRIBUNAL IN MAHINDRA & MAHINDRA LTD, MUMBAI VS. DCIT, RANGE - 2(2), MUMBAI IN ITA NO.382/MUM/2017, DATED 14.05.2019. 2. IN THE COURSE OF THE HEARING OF THE APPLICATION THE LD. AUTHORIZED REPRESENTATIVE (FOR S HORT A.R) FOR THE ASSESSEE TOOK US THROUGH THE FACTS NARRATED IN THE APPLICATION FILED BY THE ASSESSEE , AND SUBMITTED , THAT THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE IN ITA NO. 382/MUM/ 2017 FOR A.Y. 2007 - 08 SUFFERED FROM TWO MISTAKES, VIZ. (I) THE CLAIM OF THE ASSESSEE THAT AS THE TIME LIMIT FOR PASSING AN ORDER UNDER SEC.201 HAD ALREADY EXPIRED, THEREFORE, NO DISALLOWANCE WAS WARRANTED UNDER SEC.40(A)(IA) OF THE ACT HAD REMAINE D UN - ADJUDICATED; AND (II) THE ALTERNATI VE CLAIM OF THE ASSESSEE THAT IN CASE IF THE DISALLOWANCE UNDER SEC.40(A)(IA) WAS TO BE SUSTAINED, THE SAME WAS LIABLE TO BE RESTRICTED TO THE EXTENT OF P A G E | 2 M.A. NO. 485/MUM/2019 AY. 2007 - 08 (ARISING OUT OF ITA NO.382/MUM/2017) MAHINDRA & MAHINDRA LTD. VS. DCIT, RANGE - 2(2) 30% OF THE TOTAL AMOUNT OF THE SERVICE COUPONS HAD NOT BEEN ANSWERED. IT WAS SUBMITTED BY THE LD. A.R, THAT THOUGH THE AFORESAID ISSUE S WERE RAISED IN THE COURSE OF THE HEARING OF THE APPEAL AND HAD BEEN REF ER RED TO BY THE TRIBUNAL AT PAGE 6 PARA 6 OF ITS ORDER, HOWEVER, INADVERTENTLY THE SAME HAD THEREAFTER NOT BE EN ADJUDICATED UPON. IN SUM AND SUBSTANCE, IT WAS THE CLAIM OF THE LD. A.R THAT THOUGH THE VALIDITY OF THE DISALLOWANCE UNDER SEC. 40(A)(IA) WAS INTER ALIA ASSAILED IN THE COURSE OF THE HEARING OF THE APPEA L ON THE AFORESAID TWO COUNTS , H OWEVER, THE SAME HAD NOT BEEN ADJUDICATED UPON BY THE TRIBUNAL. ON THE BASIS OF HIS AFORESAID CONTENTIONS, IT WAS SUBMITTED BY THE LD. A.R THAT THE FAILURE ON THE PART OF THE TRIBUNAL TO ADJUDICATE THE AFORESAID SPECIFIC CLAIMS WHICH WERE ADMITTEDLY RAI SED IN THE COURSE OF THE HEARING OF THE APPEAL HAD RENDERED THE ORDER PASSED BY IT WHILE DISPOSING OFF THE APPEAL AS SUFFERING FROM A MISTAKE WHICH BEING PATENT, APPARENT, OBVIOUS AND GLARING FROM RECORD, THUS MADE IT AMENABLE FOR RECTIFICATION UNDER SEC.2 54(2) OF THE ACT. 3. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) OBJECTED TO THE AFORESAID CONTENTIONS ADVANCED BY THE COUNSEL FOR THE ASSESSEE. IT WAS SUBMITTED BY THE LD. D.R THAT AS NO MISTAKE WAS DISCERNIBLE FROM THE ORDER OF THE TRIBUNAL, THEREFORE, THE APPLICATION FILED BY THE ASSESSEE DID NOT MERIT ACCEPTANCE AND WAS LIABLE TO BE DISMISSED. 4. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES AND PERUSED THE RECORDS BEFORE US. ADMITTEDLY, THE ASSESSEE HAD INTER ALIA ASSAILED THE VALIDITY OF THE DISALLOWANCE UNDER SEC.40(A)(IA) ALSO ON THE AFORESAID TWO GROUNDS, VIZ. (I) THAT, AS THE TIME LIMIT FOR PASSING AN ORDER UNDER SEC.201 HAD ALREADY EXPIRED, THEREFORE, NO DISALLOWANCE WAS WARRANTED UNDER SEC.40(A)(IA) OF THE ACT ; AND (II) THAT, IN CASE IF THE DISALLOWANCE UNDER SEC.40(A)(IA) WAS TO BE SUSTAINED, THE SAME WAS LIABLE TO BE RESTRICTED TO THE EXTENT OF 30% OF THE TOTAL AMOUNT OF THE SERVICE COUPONS. WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOS ING OFF THE AFORESAID APPEAL IN ITA NO.382/MUM/2017, VIDE ITS ORDER DATED 14.05.2019. AS CAN BE GATHERED FROM A PERUSAL OF THE PAGE 6 PARA 6 OF THE AFORESAID ORDER, WE FIND, THAT THE ASSESSEE HAD SPECIFICALLY ASSAILED THE DISALLOWANCE UNDER SEC.40(A)(IA) ON BOTH OF THE AFORESAID ISSUE S . WE FIND THAT THE ASSESSEE HAD ALSO ASSAILED THE VALIDITY OF THE DISALLOWANCE UNDER SEC. 40(A)(IA) ON THE GROUND THAT NOW WHEN THE PAYEES HAD FILED THEIR RETURNS OF INCOME AND PAID THE TAX DUE FOR THE RELEVANT ASSESSMENT YE AR, THEREFORE, IN THE ABSENCE OF ANY SUBSISTING TAX LIABILITY OF THE PAYEES THE ASSESSEE WOULD DULY BE ENTITLED TO P A G E | 3 M.A. NO. 485/MUM/2019 AY. 2007 - 08 (ARISING OUT OF ITA NO.382/MUM/2017) MAHINDRA & MAHINDRA LTD. VS. DCIT, RANGE - 2(2) CLAIM DEDUCTION OF THE AMOUNTS PAID TO THEM. AS THE TRIBUNAL HAD PRINCIPALLY FOUND FAVOUR WITH THE AFORESAID CLAIM OF THE ASSESSEE, THEREFORE , IT HAD RESTORED THE MATTER TO THE FILE OF THE A.O, WITH A DIRECTION THAT IN CASE THE ASSESSEE SATISFIED THE CONDITIONS IN SUB - SECTION (1) OF SEC.201, THEN IT IS NOT TO BE TREATED AS AN ASSESSEE IN DEFAULT, AND RESULTANTLY AS PER THE SECOND PROVISO OF SEC .40(A)(IA) NO DISALLOWANCE UNDER THE SAID STATUTORY PROVISION WOULD BE CALLED FOR IN ITS HANDS. ADMITTEDLY, THE AFORESAID TWO ASPECTS ON THE BASIS OF WHICH THE VALIDITY OF THE DISALLOWANCE UNDER SEC.40(A)(IA) WAS INTER ALIA ASS AILED BEFORE US BY THE ASSESS EE HAD ADVERTENTLY REMAINED OMITTED TO BE ADJUDICATED UPON WHILE DISPOSING OFF THE APPEAL. AS WE HAVE ALREADY RESTORED THE MATTER TO THE FILE OF THE A.O, THEREFORE, IN ALL FAIRNESS WE DIRECT HIM TO ALSO CONSIDER THE AFORESAID CLAIM S OF THE ASSESSEE IN THE COURSE OF THE SET ASIDE PROCEEDINGS. VIZ. (I) THAT, NO DISALLOWANCE UNDER SEC.40(A)(IA) COULD BE MADE AFTER THE EXPIRY OF THE TIME FOR PASSING OF ORDER UNDER SEC. 201 OF THE ACT; AND (II) THAT, IN CASE THE DISALLOWANCE IS SUSTAINED, THE SAME IS L IABLE TO BE RESTRICTED TO THE EXTENT OF 30% OF THE TOTAL AMOUNT OF SERVICE COUPONS. NEEDLESS TO SAY, THE A.O SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE COURSE OF THE SET ASIDE PROCEEDIN GS, WHEREIN THE LATTERS SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE ITS CLAIM ON THE BASIS OF FRESH DOCUMENTARY EVIDENCE. ON THE BASIS OF THE AFORESAID OBSERVATIONS OUR ORDER PASSED WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE I.E MAHINDRA & MAHINDRA LTD. VS. DCIT, RANGE 2(2), MUMBAI IN ITA 382/MUM/2017, DATED 14.05.2019 IS MODIFIED TO THE SAID EXTENT. 5. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE S IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER P RONOUNCED IN THE OPEN COURT ON 3 1 . 01 .2020 S D / - S D / - (SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 3 1 /01/2020 ROHIT, P.S. P A G E | 4 M.A. NO. 485/MUM/2019 AY. 2007 - 08 (ARISING OUT OF ITA NO.382/MUM/2017) MAHINDRA & MAHINDRA LTD. VS. DCIT, RANGE - 2(2) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI