M/s. Amirtham Transport, CHENNAI V. DCIT, CHENNAI

MA 93/CHNY/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4860 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K R MEENA
• Assessee Lawyers: K RAMAGOPAL
• Keywords: Non-deduction of tax
• Section: 43B; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B BEFORE SHRI PRADEEP PARIKH, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER M.A.NO.93/MDS/2010 (IN I.T.A. NO.1699/MDS/2009) ASSESSMENT YEAR : 2006-07 M/S.AMIRTHAM TRANSPORT OLD NO.18, NEW NO.28 ANDIAPPA GRAMANI STREET ROYAPURAM CHENNAI 600 013. PAN AAFFA 8550 L VS. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE X CHENNAI. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI K.RAMAGOPAL RESPONDENT BY : SHRI K.R.MEENA, CIT-DR O R D E R PER PRADEEP PARIKH, V.P. BY THIS APPLICATION THE ASSESSEE SEEKS RECTIFICATI ON OF THE ORDER OF THE TRIBUNAL DATED 16.4.2010. 2. THE GRIEVANCE OF THE ASSESSEE IN THE APPEAL WAS AGAINST THE DISALLOWANCE OF ` 15,98,454/- MADE UNDER SEC.40(A)(IA) OF THE INCOME-TAX ACT, 1961 (THE ACT) ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE UNDER SEC .194C OF THE ACT. THE BRIEF FACTS ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND THAT IT HAD P AID A SUM OF ` 15,98,454/- AS HIRE CHARGES TO SMT. AMIRTHAMMAL, W IFE OF ONE OF THE PARTNERS OF THE FIRM. THE CONTENTIONS OF THE ASSESSEE WERE THAT THE PAYEE HAS FILED THE RETURN A ND PAID TAX THEREON, THAT THERE WAS NOTHING LIKE A CONTRACT WHICH WOULD ATTRACT SEC.194C OF THE ACT, THAT SINCE THE P AYEE HAD FURNISHED HER PERMANENT ACCOUNT NUMBER (PAN) AND HE NCE 2 MA 93/10 NO TAX WAS DEDUCTIBLE AT SOURCE. THE TRIBUNAL HELD THAT THERE WAS A CONTRACT IN SO FAR AS THAT SMT. AMIRTHAMMAL H AD CARRIED OUT THE WORK AS A SUB-CONTRACTOR. IT WAS AL SO HELD THAT PAYMENT OF TAX BY THE PAYEE BARRED ONLY RAISIN G THE DEMAND AGAINST THE PAYER UNDER SEC.201(1) OF THE AC T AND THAT IT HAD NOTHING TO DO WITH THE DISALLOWANCE UND ER SEC.40(A)(IA). IT WAS FURTHER HELD THAT THE PROVISI ON RELATING TO FURNISHING OF PAN WAS EFFECTIVE FROM 1.10.2009 A ND THAT IT WAS NOT RETROSPECTIVE IN OPERATION. ACCORDINGLY, TH E APPEAL OF THE ASSESSEE WAS DISMISSED. 3. IN THE PRESENT PROCEEDINGS, THE CONTENTION OF TH E LD. COUNSEL WAS THAT THE DECISION OF THE TRIBUNAL WAS O PPOSED TO THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CI T VS. ALOM EXTRUSIONS LTD. IN 227 CTR 417. IT WAS ALSO TH E CONTENTION THAT THE PROVISION RELATING TO FURNISHIN G OF PAN WAS RETROSPECTIVE IN OPERATION AND THAT SINCE THE D EPARTMENT HAS COLLECTED THE TAX, NO FURTHER DEMAND CAN BE RAI SED. 4. THE CONTENTION OF THE LD. D.R. WAS THAT THE APPL ICATION OF THE ASSESSEE IS FOR A REVIEW OF THE DECISION WHI CH IS NOT PERMITTED UNDER SEC.254(2) OF THE ACT. IT WAS SUBMI TTED THAT THE TRIBUNAL HAS GIVEN A REASONED ORDER WHICH DOES NOT CALL FOR ANY RECTIFICATION. ACCORDINGLY, HE OPPOSED THE APPLICATION. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D THE MATERIAL ON RECORD. SO FAR AS THE JUDGMENT OF THE SUPREME COURT CITED SUPRA IS CONCERNED, IN OUR HUMBLE OPINI ON, THE SAME IS NOT APPLICABLE AS IN THAT CASE THERE WAS AN AMENDMENT IN THE EXISTING SEC. 43B ITSELF. IN THE C ASE BEFORE US AS HAS BEEN HELD BY THE TRIBUNAL IN PARAGRAPH 7 OF THE ORDER THAT THE ENTIRE SEC. 194C HAS BEEN SUBSTITUTE D BY A NEW SEC. 194C WITH EFFECT FROM 1.10.2009 AND HENCE, TO 3 MA 93/10 TREAT A SMALL PART OF IT AS RETROSPECTIVE IN OPERAT ION IS NOT JUSTIFIABLE. THIS DECISION MAY BE OPEN TO DEBATE AN D HENCE IF WE ACCEPT THE CONTENTION OF THE LD. COUNSEL, IT WOU LD AMOUNT TO REVIEW OF THE DECISION AND NOT RECTIFICATION. FU RTHER, WITH REGARD TO THE PROVISION RELATING TO FURNISHING OF P AN, THE TRIBUNAL HAS CATEGORICALLY HELD THAT IT IS PROSPECT IVE IN OPERATION. HENCE, IF THIS DECISION IS ALSO CHANGED, IT WOULD AMOUNT TO A REVIEW. MOREOVER, THE MEMORANDUM EXPLAI NING THE PROVISION IN FINANCE (NO.2) BILL, 2009 WHICH BR OUGHT ABOUT THE SUBSTITUTION OF SEC.194C, CATEGORICALLY S TATES THAT THE AMENDMENTS WILL TAKE EFFECT FROM THE FIRST DAY OF OCTOBER, 2009 AND WILL ACCORDINGLY APPLY TO TRANSAC TION ON OR AFTER SUCH DATE. THIS EXPLANATION CLEARLY INDICATES THE INTENTION OF THE LEGISLATURE AND HENCE, IN OUR OPIN ION, THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE T RIBUNAL. 6. IN THE RESULT, THE APPLICATION OF THE ASSESSEE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 09.09.2010 . SD/- SD/- (HARI OM MARATHA) JUDICIAL MEMBER (PRADEEP PARIKH) VICE-PRESIDENT CHENNAI, DATED THE 09 TH SEPT., 2010 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR