Sk Saifuddin, Howrah V. DCIT, CIR-48, KOLKATA, Kolkata

MA 74/KOL/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3788 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2015
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM) M. A. NO. 74/KOL/2015 IN I.T.A NO. 1648/KOL/2010 ASSESSMENT YEAR: 2006-07 SK. SAIFIUDDIN VS. DEPUTY COMMISSIONER OF INCOM E-TAX, (PAN: AMVPS6787R) CIRCLE-48, KOLKATA. ( APPLICANT ) ( RESPONDENT ) DATE OF HEARING : 20.11.2015 DATE OF PRONOUNCEMENT: 16.12.2015 FOR THE APPLICANT: SHRI I. BANERJEE, ACA FOR THE RESPONDENT: SHRI NILOY BARAN SOM, JCIT, SR. DR ORDER PER MAHAVIR SINGH, JM: BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS SOUGHT FOR RECALLING OF THE TRIBUNALS ORDER DATED 29.04.2015 QUA GROUND NO.1 O F REVENUES APPEAL I.E. THE DISALLOWANCE OF LABOUR CHARGES PAYMENT FOR NON-DEDU CTION OF TDS U/S. 194C OF THE ACT THEREBY INVOKING THE PROVISIONS OF SECTION 40(A)(IA ) OF THE ACT BY AO BUT DELETED BY CIT(A). 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF JAHANGIR BIRI FACTORY (P) LTD. VS. DCIT (2009) 126 TTJ 567 (KOL) AND STATED THAT THE SIMILAR ISSUE REGARDING PAYMENT OF BIRI BINDING CHA RGES MADE THROUGH MUNSHIES ARE PART OF LABOURERS CANNOT BE SAID TO BE PAYMENT FALLING U NDER THE PROVISIONS OF SECTION 194C READ WITH SECTION 40(A)(IA) OF THE ACT. SIMILARLY, THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. MRINALINI BIRI MANUFAC TURING COMPANY (P) LTD. 105 CTR 327 (CAL), WHEREIN HONBLE COURT FOUND THAT IT IS D IFFICULT TO CONTROL LARGE NUMBER OF WORKERS ENGAGED AND ACCORDINGLY, SOMEONE TO SUPERVI SE (I.E. SARDAR/MUNSHIS) THE WORK OF SUCH WORKERS AND THE PAYMENTS TO SUCH SARDARS/MUNSH IS ARE BEING MADE SEPARATELY AND THE STATUS OF SUCH SARDARS/MUNSHIS IS NOT COVERED U NDER THE PROVISIONS OF SEC. 194C OF THE ACT. LD. COUNSEL FOR THE ASSESSEE STATED THAT THES E TWO DECISIONS OF HONBLE CALCUTTA HIGH COURT AND KOLKATA ITAT WERE NOT CONSIDERED BY THE BENCH DESPITE THE FACT THAT THE SAME WERE PLACED BEFORE THE BENCH DURING THE COURSE OF HEARING AND THE SAME ARE PART OF 2 MA NO 74/K/2015, SK. SAIFUDDIN A. Y 2006-07 ASSESSEES PAPER BOOK. ANOTHER ASPECT ARGUED BY ASS ESSEE BUT NOT CONSIDERED BY TRIBUNAL IS THAT THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT AS AMENDED BY FINANCE ACT, 2012 IS RETROSPECTIVE AND ISSUE CAN BE REMITTED BAC K TO THE FILE OF AO TO EXAMINE WHETHER THE RECIPIENTS HAVE INCLUDED THE RECEIPTS IN THEIR RESPECTIVE RETURNS OF INCOME AND PAID TAXES ON THE SAME, IN TERM OF THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANSAL LAND MARK TOWNSHIP (P) LTD., ITA NOS. 160 & 161/2015 DATED 26.08.2015, WHEREIN IT HAS BEEN HELD AS UNDER: NO S. 40(A)(IA) DISALLOWANCE FOR FAILURE TO DEDUCT TDS ON PAYMENT IF PAYEE HAS OFFERED AMOUNT TO TAX. SECOND PROVISO TO S. 40(A)(I A) INSERTED BY FINANCE ACT 2013 W.E.F. 1.4.2013 SHOULD BE TREATED AS CURATIVE AND T O HAVE RETROSPECTIVE EFFECT FROM 1.4.2005. ITAT PRAISED FOR 'THOROUGH ANALYSIS' OF T HE PROVISION IN VIEW OF THE ABOVE, LD. COUNSEL FOR THE ASSESSEE STATED THAT NON-CONSIDERATION OF JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF M RINALINI BIRI MANUFACTURING COMPANY (P) LTD., SUPRA AND JURISDICTIONAL TRIBUNALS DECIS ION IN THE CASE OF JAHANGIR BIRI FACTORY (P) LTD., SUPRA CONSTITUTE MISTAKE APPARENT FROM RE CORD AND THE SAME SHOULD BE RECTIFIED. 3. ON THE OTHER HAND, LD. SR. DR SUPPORTED THE ORDE R OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES. WE HAVE GONE THRO UGH THE ORDER OF THE TRIBUNAL DATED 29.04.2015 AND NOTICED THAT THE JUDGMENT OF H ONBLE CALCUTTA HIGH COURT IN THE CASE OF MRINALINI BIRI MANUFACTURING COMPANY (P) LT D., SUPRA WAS NOT AT ALL CONSIDERED. FURTHER, THE TRIBUNALS DECISION IN THE CASE OF JAH ANGIR BIRI FACTORY (P) LTD. SUPRA WAS ALSO NEVER CONSIDERED. WE FIND THAT THE CIT(A) HAS CONSIDERED THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF MRINALINI BIRI MANUFA CTURING COMPANY (P) LTD., SUPRA AND ALSO THE COORDINATE BENCH DECISION IN THE CASE OF JAHANGIR BIRI FACTORY (P) LTD., SUPRA WHILE DECIDING THE ISSUE BY NOTING DOWN THE ISSUE O F PAYMENT TO SARDARS/MUNSHIS BUT WE FIND FROM THE ORDER OF AO THAT THESE ISSUES WERE NE VER TAKEN UP BEFORE AO ALTHOUGH THERE IS A PASSING REFERENCE THAT THE PAYMENT TO THE INDI VIDUAL WORKERS ARE MADE THROUGH SUPERVISOR, BUT THE AO HAS NOT ADJUDICATED ON THE S AME. SINCE THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF MRINALINI BIRI MANUFA CTURING COMPANY (P) LTD., SUPRA AND COORDINATE BENCH DECISION IN THE CASE OF JAHANGIR B IRI FACTORY (P) LTD., SUPRA WERE NOT CONSIDERED BY THE TRIBUNAL, WE FEEL THAT THERE IS A MISTAKE APPARENT FROM RECORD IN THE ORDER OF TRIBUNAL. HENCE, WE RECALL OUR ORDER DATED 29.04.2015 AND SET ASIDE THE ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION FOR THE REASO N THAT EVEN IF WE KEEP THIS MATTER AT 3 MA NO 74/K/2015, SK. SAIFUDDIN A. Y 2006-07 TRIBUNAL, IT WILL SERVE NO PURPOSE AS FACTS ARE REQ UIRED TO BE DISCUSSED. THE SECOND ASPECT REGARDING APPLICABILITY OF SECOND PROVISO TO SECTIO N 40(A)(IA) OF THE ACT AS AMENDED BY THE FINANCE ACT, 2012, WHICH IS HELD TO BE CURATIVE AND RETROSPECTIVE BY HONBLE DELHI HIGH COURT IN THE CASE OF ANSAL LAND MARK TOWNSHIP (P) LTD., SUPRA. IN TERMS OF THE ABOVE, WE RESTORE THE ISSUE BACK TO THE FILE OF AO FOR VERIFICATION OF PAYMENT OF TAX IN RESPECT OF SUCH INCOME, WHETHER THE SAME IS INCLUDE D BY THE RECIPIENTS OR NOT. IF PAYMENT IS INCLUDED IN THE INCOME AND TAXES ARE PAID BY RES PECTIVE RECIPIENTS THEN ADDITION SHOULD BE DELETED IN TERM OF THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE WILL LEAD THE EVIDENCE IN THIS RESPECT BEFORE THE AO. W E DIRECT THE AO ACCORDINGLY. MISC. APPLICATION OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, MISC. APPLICATION OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.12.2015 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16TH DECEMBER, 2015 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPLICANT : SK. SAIFUDDIN, NATIBPUR, P.O. KOLOBAR, DOMJUR, HOWRAH- 711411. 2 RESPONDENT DCIT, CIR-48, KOLKATA. 3. THE CIT(A) , KOLKATA 4. ACIT, KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR .