The Acit B K Circle Palanpur v. Shri Bipinchandra Amichand Patel Patan

Ch Chch Ch In The Income Tax Appellate Tribunal B Bench Ahmedabad Before Shri Mahavir Prasad Judicial Member And Shri Manish Borad Accountant Member I T A No 2053 Ahd 2015 Assessment Year 2008 09 Acit B K Circle Palanpur 385 001 Vs Shri Bipinchandra Amichand Patel Prop Of Saraswati Construction Company At Radhanpur Dist Patan 385 340 Pan Gir No Acvpp 6976 F Appellant Respondent Appellant By Shri Mudit Nagpal Sr D R Respondent By Shri Mehul K Patel A R Date Of Hearing 22 12 2017 Date Of Pronouncement 26 12 2017 O R D E R Per Manish Borad Accountant Member Revenue Is In Appeal Against The Order Of Learned Commissioner Of Income Tax Appeals 4 Ahmedabad Dated 27 05 20 15 Arising Out Of Order U S 147 R W S 143 3 Of The Income Tax Act Hereinafter Referred To As Act Dated 28 03 2014 Framed By Acit Bk Circ Le Palanpur Relating To A Y 2008 09 Ita No 2053 Ahd 2015 Acit Vs Bipinchandra A Patel Asst Year 2008 09 2 2 Sole Grievance Of The Revenue Is Against The Ord Er Of Ld Cit A Deleting The Addition Made By The Assessing Officer U S 40 A Ia Of The Act Of Rs 63 07 900 3 Briefly Stated Facts As Culled Out From The Reco Rds Are That The Assessee Is An Individual Engaged In Civil Construc Tion Business Under Sale Property Concern M S Saraswati Construction C Ompany Original Assessment U S 143 3 Was Completed On 12 05 2010 D Etermining Total Income Of Rs 25 61 580 Thereafter Re Assessment Proceeding Were Initiated Notice U S 148 Alongwith Reasons Was Is Sued To The Assessee During The Course Of Re Assessment Proceedings It W As Observed That Tax Deducted At Source On The Contract Payments Of Rs 6 3 07 900 Were Paid To The Government Treasury In April 2008 Ao Was O F The View That The Assessee Was Statutorily Required To Deposit The Ta X In The Month Of February March 2008 Respectively And Therefore Ma De A Default In Complying To The Provision Of Section 40 A Ia Of The Act And Accordingly Made Disallowance Of Rs 63 07 900 An D Assessed The Income Of Rs 88 69 480 4 Aggrieved Assessee Before Appeal Before Ld Cit A And Succeeded On This Issue Of The Disallowance U S 40 A Ia As Ld Cit A Deleted The Impugned Disallowance Following The Judgment Of Hon Ble Delhi High Court In The Case Of H S Mohindra Traders Vs Ito 2010 132 Ttj 701 And Judgment Of Honble Gujarat High Court In The C Ase Of Cit Vs Ita No 2053 Ahd 2015 Acit Vs Bipinchandra A Patel Asst Year 2008 09 3 Royal Builders Tax Appeal No 520 Of 2012 Dated 11 02 2013 Thereby Holding That No Disallowance Was Called For U S 40 A Ia Of The Act As The Assessee Has Deposited The Amount Before The Due Da Te Of Filing The Return Of Income Specified In Section 139 1 Of The Act 5 Aggrieved Revenue Is Now Before The Tribunal Ld Departmental Representative Supported The Order Of The Assessing Officer And Ld Counsel For The Assessee Supporting The Order Of Ld Cit A Submitted That The Issue Stands Squarely Covered In Favour Of The Assessee By The Judgment Of Jurisdictional High Court In The Case O F Royal Builders Supra 6 We Have Heard The Rival Contentions And Perused The Records Placed Before Us Grievance Of Revenue Is Against T He Deleting Of Addition Of Rs 63 07 900 U S 40 A Ia From Perusal Of Re Cord We Find That Assessee Made Payments To Various Parties Towards C Ontract Charges During The Month Of January And February Totaling T O Rs 63 07 900 And The Tax Deducted At Source On This Payment At Rs 68 883 Was Required To Be Deposited In Subsequent Month I E February And March 2008 Respectively However There Was Delay In Deposit A Nd Tax Deducted On The Contract Payment Was Finally Deposited In The G Overnment Account In April 2008 This Fact Is Not Disputed That The Tax Deducted Was Paid In April 2008 Which Is Much Before The Due Date Of F Iling Return Of Income Provided In Section 139 1 Of The Act Ita No 2053 Ahd 2015 Acit Vs Bipinchandra A Patel Asst Year 2008 09 4 7 We Further Observe From Going Through The Judgme Nt Of Honble Delhi High Court In The Case Of H S Mohindra Trad Ers Supra And Judgment Of Jurisdictional High Court In The Case O F Royal Builders Supra Where It Has Been Consistently Held That N O Disallowance U S 40 A Ia Of The Act Is To Be Made If The Tax D Educted At Source Relating To The Financial Year Is Deposited Before The Due D Ate Of Filing Return Of Income Specified In Section 139 1 Of The Act 8 Respectfully Following The Judgment Of Honble H Igh Courts We Find No Reason To Interfere In The Findings Of Ld Cit A Deleting The Impugned Disallowance Of Rs 63 07 900 Observing A S Follows 5 2 I Have Considered The Submission Filed By The Appellant And The Observations Of The Ao In The Assessment Order Hon Ourable Delhi High Court In The Case Of H S Mohindra Traders V Ito 2010 132 Ttj 701 Having Similar Facts Has Held As Below The Assessee Had Deducted The Tax At Source In The Month Of March 2007 For The Expenditure Incurred In Februar Y 2007 But The Same Was Deposited With The Income Tax Departme Nt In April 2007 I E Much Before The Due Date Specified In Su B Section 1 Of Section 139 Of The Income Tax Act For Filing The Return In These Circumstances We Are Of The Opinion That The Income Tax Appellate Tribunal Hereinafter Referred To As The Tribunal Has Rightly Interpreted The Provision Of Section 40 A Ia And Particularly Sub Clause A Thereof Which Clearly Gives The Time To The Assessee To Deposit The Tds O N Or Before The Due Date Specified In Sub Section 1 Of Section 13 9 Of The Act The Entire Case Sought To Be Made In This Appeal Is That The Tribunal Wrongly Relied Upon The Amendment Which Ca Me Into Effect From 1 04 2010 This Is Clearly Erroneous In As Much As Ita No 2053 Ahd 2015 Acit Vs Bipinchandra A Patel Asst Year 2008 09 5 Section 40 A Ia Was Amended By The Finance Act 2 008 With Effect From 01 05 2005 Whereby The Words On Or Bef Ore The Due Date Specified In Sub Section I Of Section 139 W As Substituted By The Words Has Not Been Paid During The Previou S Year Or In The Subsequent Year Before The Expiry Of The Time P Rescribed Under Sub Section 1 Of Section 200 Of The Act W E Thus Find No Merit In This Appeal This Appeal Is Accordingly Dismissed 5 2 1 On Similar Facts Honble Itat Ahmedabad In The Case Of M S Shah Rasiklal Babulal In Ita No 1717 Ahd 2011 In Order Dated 19 06 2013 Has Also Given A Favourable Judgement Af Ter Considering Above Stated Judgement Of Honourable Delhi High Cou Rt And Other Judicial Pronouncements The Findings Are As Below 4 The Ld Counsel Of The Assessee Further Produced A Copy Of Judgment Of Honble Gujarat High Court In Tax Appea L No 520 Of 2012 In The Case Of C 1 T V Royal Builders Deli Vered On 11 02 2013 Wherein The Honble Gujarat High Court Has Approved The View Taken By The Honble Delhi High C Ourt In The Case Of H S Mohindra Traders V Gujarat High Court The Disallowance Of Rs 4 25 708 00 Made By The Assessin G Officer U S 40 A Ia Of The Income Tax Act Be Deleted As T Ds On Commission U S 194 H Of Rs 22 477 Has Been Paid On 30 04 2005 5 Shri Nimesh Yadav Ld Sr Dr Appeared On Behalf Of Revenue Could Not Controvert The Aforesaid Submissions Made By The Id Counsel For The Assessee 6 Having Heard Both The Sides I Have Carefully Go Ne Through The Orders Of The Authorities Below Admittedly The As Sessee Has Paid The Tds On Commission U S 194 H Of Rs 22 477 On 30 04 2005 Therefore Following The Judgment Of Honble Gujara T High Court In The Case Of Cit V Royal Builders Supra The Disallowance Of Rs 4 25 708 00 U S 40 A Ia Of The Income Tax Act Is Deleted Ita No 2053 Ahd 2015 Acit Vs Bipinchandra A Patel Asst Year 2008 09 6 5 2 2 In View Of The Above Stated Judicial Pronounc Ements It Is Clear That Ao Was Not Justified In Making The Disallowanc E Under The Provisions Of Section 40 A Ia Of The Act As Appel Lant Has Deducted And Paid The Tax Before Filing Of Return Under Section 139 1 Of The Act Accordingly The Disallowance Of Rs 63 07 900 Mad E By The Ao Is Hereby Deleted Ground Nos 4 5 6 Are Allowed 9 In The Result Appeal Filed By The Revenue Is Di Smissed This Order Pronounced In Open Court On 26 12 201 7 Sd Sd Mahavir Prasad Manish Borad Judicial Member Accountant Member Ahmedabad Dated 26 12 2017 Priti Yadav Sr Ps Copy Of The Order Forwarded To 1 The Appellant 2 The Respondent 3 Concerned Cit 4 The Cit A 3 Rajkot 5 12 Dr Itat Ahmedabad 6 34 5 Guard File By Order True Copy Dy Asstt Registrar Itat Ahmedabad