M/s. Farmsons Fibers, Surat V. The Income tax Officer,Ward-9(1), Surat

MA 90/AHD/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9201 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTAN T MEMBER M.A. NO.90/AHD/2011 (ARISING OUT OF ITA NO.1759/AHD/2009 & C.O. NO.124/ AHD./2009 A.Y.2006-07 THE I.T.O., WARD-9(1), SURAT APPELLANT VS. M/S FARMSONS FIBERS U-4, BOMBAY MARKET (CORPORATION BUILDING) UMARWADA, SURAT RESPONDENT DEPARTMENT BY : SHRI Y.P. VERMA, SR. D.R. ASSESSEE BY : SHRI RAJESH UPADHYAY, A.R. DATE OF HEARING : 02.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THROUGH THIS MISCELLANEOUS APPLICATION THE ASSESSEE WANTS US TO RECTIFY OUR ORDER DATED 09.10.2009. 2. ASSESSEES CONTENTION IN THIS MISCELLANEOUS APPL ICATION IS THAT ASSESSEE HAS PAID JOB WORK PAYMENT OF RS.3,77,874/- TO M/S V ARUN INDUSTRIES IN RESPECT OF MANUFACTURING OF GREY CLOTH DURING THE M ONTH OF JANUARY-FEBRUARY 2006. ON THESE PAYMENTS TDS WAS DEDUCTED AND ALSO PAID ON 30.05.2006 AS AGAINST DUE DATE FOR SUCH PAYMENT I.E. 07.02.2006 A ND 07.03.2006. HONBLE I.T.A.T. VIDE PARA 15 OF ITS ORDER HAS DISMISSED TH E GROUNDS OF ASSESSEES CROSS-OBJECTION BY OBSERVING AS UNDER:- IN VIEW OF THE ABOVE, WE FIND IN THE PRESENT CASE ALSO THERE IS DELAY IN PAYMENT OF TDS ON JOB-WORK EXPENSES RELATING TO JANUARY & M.A. NO.90/AHD/2011 (ARISING OUT OF ITA NO.1759/AHD/2009 A.Y.2006-07 2 FEBRUARY-2006, THE DUE DATE FOR PAYMENT WAS 07/02/2 006 AND 07/03/2006, WHEREAS THE ACTUAL PAYMENT OF THE ENTIR E TDS AMOUNTING TO RS.3,77,874/- WAS MADE ONLY ON 30/05/2 006. IN VIEW OF THESE FACTS, THE ASSESSEE IS NOT ELIGIBLE FOR DE DUCTION IN THE RELEVANT ASSESSMENT YEAR. ACCORDINGLY, THIS ISSUE OF THE ASSESSEES CROSS OBJECTION IS DISMISSED. IN VIEW OF THE AMENDMENT MADE U/S 40(A)(IA) FROM 0 1.04.2010 THAT TAX DEDUCTED IF NOT PAID DURING STATUTORY DUE DATE BUT IF PAID BEFORE FILING RETURN OF INCOME U/S 139(1) NO SUCH DISALLOWANCE CAN BE MA DE. FOR MAKING THIS SUBMISSION ASSESSEE RELIED ON THE LATEST DECISION O F HONBLE JURISDICTIONAL HIGH COURT DATED 18.07.2011 IN TAX APPEAL NO.706 OF 2010 IN THE CASE OF CIT VS. J.K. CONSTRUCTION CO. LTD. IT WAS FURTHER ARGUED TH AT IT IS A SETTLED POSITION OF LAW THAT SUBSEQUENT DECISION OF APEX COURT OR JURIS DICTIONAL HIGH COURT IS BINDING ON THE TRIBUNAL AND THEREFORE, CONSTITUTE A N ERROR OR APPARENT MISTAKE WHICH WAS TO BE RECTIFIED TO HAVE CONSISTENCY WITH HIGHER AUTHORITYS SUBSEQUENT DECISION. THEREFORE, THE ORDER DATED 09 .10.2009 MAY KINDLY BE ACCORDINGLY RECTIFIED BY ALLOWING THE GROUND TAKEN BY THE ASSESSEE IN ITS C.O. AS TAX DEDUCTED WAS ADMITTEDLY PAID BEFORE THE DUE DATE OF FILING OF RETURN. LD. D.R., HOWEVER, SUBMITTED THAT THERE IS NO MISTA KE APPARENT ON RECORD AND THEREFORE, THERE IS NO NEED TO RECTIFY THE ORDER DA TED 09.10.2009 AND THE M.A. FILED BY THE ASSESSEE MAY KINDLY BE DISMISSED. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT TDS ON JOB WORK EXPENSES RELATING TO JANUARY-FEBRUARY, 2006 AMOUNTING TO RS.3,77,874/- W AS PAID ON 30.05.2006 I.E. BEFORE DUE DATE OF FILING OF RETURN. ON SIMIL AR FACT HONBLE JURISDICTIONAL HIGH COURT IN THE DECISION DATED 18.07.2011 IN TAX APPEAL NO.706 OF 2010 IN THE CASE OF CIT VS. J.K. CONSTRUCTION CO. LTD. HAS HELD AS UNDER:- M.A. NO.90/AHD/2011 (ARISING OUT OF ITA NO.1759/AHD/2009 A.Y.2006-07 3 FROM THE RECORD, IT EMERGES THAT FOR PAYMENT TO CO NTRACTOR, THE ASSESSEE HAD MADE DEDUCTION AS REQUIRED UNDER LAW F ROM TIME TO TIME AND IN PARTICULAR LATEST BY 31.3.2005. ALL SU CH AMOUNTS WERE DEPOSITED WITH THE GOVERNMENT ON OR AROUND 28.5.200 5. IN BACKGROUND OF ABOVE UNDISPUTED FACTS, TRIBUNAL WAS OF THE OPINION THAT BY VIRTUE OF AMENDED PROVISIONS OF SECTION 40( A)(IA) OF THE INCOME TAX ACT, 1961, ASSESSEE HAS NOT BREACHED THE REQUIREMENT OF DEDUCTION AND DEPOSITING OF TDS. SECTION 40(A)(IA) OF THE ACT AS AMENDED WITH EFFECT FROM 1.4.2005 READ AS UNDER:- (IA) ANY INTEREST, COMMISSION, OR BROKERAGE, (RENT, ROYALTY) FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB -CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDIN G SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTI BLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDU CTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID ON OR BEFORE THE DUE D ATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139. PLAINLY SPEAKING, ASSESSEE HAD TO MAKE DEDUCTION BE FORE 31 ST MARCH OF THE YEAR IN QUESTION AND AS LONG AS SUCH AMOUNTS WERE DEPOSITED BEFORE LAST DATE OF FILING OF THE RETURN, REQUIREME NTS OF LAW WOULD BE FULFILLED. IT WAS ON THIS BASIS THAT TRIBUNAL WAS OF THE OPINION THAT THE ASSESSEE COMMITTED NO WRONG AND WAS THEREFORE, ENTITLED TO SEEK DEDUCTION OF CONTRACTORS AND HAD ALSO DEPOSITE D WITH REVENUE BEFORE THE LAST DATE OF FILING OF THE RETURN. WE D O NOT FIND ANY ILLEGALITY IN ORDER OF TRIBUNAL. TAX APPEAL IS THE REFORE, DISMISSED. 4. SINCE NOW LAW IS SETTLED THAT SUBSEQUENT DECISIO N OF THE APEX COURT OR OF JURISDICTIONAL HIGH COURT IS BINDING ON THE TRIB UNAL AND THEREFORE CONSTITUTE A MISTAKE APPARENT ON RECORD AND SINCE IN THIS CASE SAME MISTAKE FROM RECORD HAS CREPT IN, IN OUR ORDER DATED 09.10.2009, IN VIE W OF ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, WE ARE INCLINED TO ACCEPT THE CONTENTION OF LD. COUNSEL OF THE ASSESSEE AND MODIFY PARA 15 OF O UR ORDER DATED 09.10.2009 BY HOLDING THAT SINCE TAX DEDUCTED AT SOURCE AMOUNT ING TO RS.3,77,874/- HAS BEEN PAID BY THE ASSESSEE BEFORE DUE DATE OF FILING OF RETURN, NO DISALLOWANCE CAN BE MADE IN ASSESSEES CASE BY INVOKING THE PROV ISIONS OF SECTION M.A. NO.90/AHD/2011 (ARISING OUT OF ITA NO.1759/AHD/2009 A.Y.2006-07 4 40(A)(IA) OF THE ACT. ACCORDINGLY, THIS ISSUE OF T HE ASSESSEE IN CROSS- OBJECTION IS ALLOWED AND PARAGRAPH 16 OF THAT ORDER DATED 09.10.2009 NOW BE READ AS UNDER:- IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED WHILE THE CROSS- OBJECTION OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THIS MISCELLANEOUS APPEAL IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 23.11.2012 SD/- SD/- (A.MOHAN ALANKAMONY) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD