ACIT,Circle-16(3),, Hyderabad v. M/s Pragati Green Meadows and Resorts Private Limited,, Hyderabad

ITA 266/HYD/2013 | 2009-2010
Pronouncement Date: 13-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 26622514 RSA 2013
Assessee PAN AACCP5283H
Bench Hyderabad
Appeal Number ITA 266/HYD/2013
Duration Of Justice 8 year(s) 2 month(s) 13 day(s)
Appellant ACIT,Circle-16(3),, Hyderabad
Respondent M/s Pragati Green Meadows and Resorts Private Limited,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-05-2021
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB-B
Tribunal Order Date 13-05-2021
Date Of Final Hearing 01-04-2021
Next Hearing Date 01-04-2021
Last Hearing Date 14-12-2017
First Hearing Date 05-12-2017
Assessment Year 2009-2010
Appeal Filed On 01-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU ACCOUNTANT MEMBER I.T.A. NO. 266/HYD/2013 ASSESSMENT YEAR: 2009-10 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-16(3) HYDERABAD VS M/S.PRAGATI GREEN MEADOWS AND RESORTS PRIVATE LIMITED HYDERABAD [PAN: AACCP5283H] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI ROHIT MUJUMDAR DR FOR ASSESSEE : SHRI P.MURALI MOHANA RAO AR DATE OF HEARING : 07-04-2021 DATE OF PRONOUNCEMENT : 13-05-2021 O R D E R PER S.S.GODARA J.M. : THIS REVENUES APPEAL FOR AY.2009-10 ARISES FROM THE CIT(A)-V HYDERABADS ORDER DATED 27-11-2012 PASSED IN APPEAL NO.0375 / DC-16(3) / CIT(A)-V / 2011-12 IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT 1961 [I N SHORT THE ACT]. HEARD BOTH PARTIES. CASE FILE PERUSED. 2. THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: I. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH IN LAW AND IN FACTS OF THE CASE. ITA NO. 266/HYD/2013 :- 2 -: II. THE LEARNED CIT(A) ERRED IN DELETING DISALLOWAN CE OF DEPRECIATION OF RS. 2 08 73 301/- WITHOUT OFFERING THE ASSESSING OF FICER A REASONABLE OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCES/DOC UMENTS FILED BEFORE THE LEARNED CIT (A) IN ACCORDANCE WITH RULE 46A(3) OF IT RULES ON THE ISSUE OF DEPRECIATION DISALLOWANCE. III. THE LEARNED CIT(A) ERRED IN DELETING ADDITION MADE U/S 2(24)(X) R.W.S.36(1)(VA) OF THE ACT OF RS.10 06 303/- IN RES PECT OF DELAYED PAYMENT OF EMPLOYEE'S PROVIDENT FUND WITHOUT APPREC IATING THAT AS PER EXPLANATION TO CLAUSE (VA) OF SUBSECTION (1) OF SECTION 36 OF THE ACT THE DUE DATE IS DEFINED AS THE DATE BY WHICH THE AS SESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEE'S CONTRIBUTION TO THE EMPLOYEE'S ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT RULE O RDER OR NOTIFICATION ISSUED THERE UNDER OR UNDER ANY STANDING ORDER AWA RD CONTRACT OF SERVICE OR OTHERWISE. THEREFORE THE DUE DATE FOR FI LING OF RETURN DOES NOT HAVE ANY RELEVANCE FOR DISALLOWANCE U/S 36(1)(V A) OF IT ACT. IV. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE MADE U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS.10 88 067/- I N RESPECT OF DELAYED PAYMENT OF TDS ON INTEREST WITHOUT APPRECIATING THA T THE INTENTION OF LEGISLATURE IN USING THE WORD 'PAYABLE' IS THAT TDS HAS TO BE DEDUCTED ON ALL PAYMENTS WHICH FALL UNDER CHAPTER XVII OF TH E ACT AND AS SUCH IN RESPECT OF PAYMENTS MADE WITHIN THE FINANCIAL YE AR WITHOUT DEDUCTION OF TAX ARE NOT EXCLUDED FROM PROVISIONS O F SECTION 40(A)(IA) OF THE ACT. V. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF DONATIONS OF RS. 6 60 916/- WITHOUT OFFERING THE ASSESSING OF FICER A REASONABLE OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCES/DOC UMENTS FILED BEFORE THE LEARNED CIT (A) IN ACCORDANCE WITH RULE 46A(3) OF IT RULES ON THE ISSUE OF DONATIONS DISALLOWANCE. VI. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. LEARNED DEPARTMENTAL REPRESENTATIVES CASE QUA THE FIRST ISSUE OF ASSESSEES DEPRECIATION CLAIM TO THE TUNE OF RS.2 08 73 301/- IS THAT THE CIT(A) HAS ERRED IN LAW A ND ON FACTS IN DELETING THE SAME AFTER ADMITTING ADDITIONAL EV IDENCE IN VIOLATION OF RULE 46A OF INCOME TAX RULES 1962. HE INVITED OUR ATTENTION TO THE CIT(A)S DETAILED DISCUSSION TO THIS E FFECT AS FOLLOWS: 5. THE FIRST ISSUE RELATES TO THE DISALLOWANCE OF DEPRECIATION RS.2 08 73 301/-. THE ASSESSING OFFICER HAS DISALL OWED THE DEPRECIATION GIVING THE FOLLOWING REASONS: ITA NO. 266/HYD/2013 :- 3 -: 3.1. IT IS NOTICED FROM THE DETAILS OF DEPRECIATIO N AND FIXED ASSETS THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE PURCHASED THE FOLLOWING ASSETS AND CLAIMED DEPRECIA TION AS UNDER: ITA NO. 266/HYD/2013 :- 4 -: 5.4. ON PERUSAL OF ABOVE BILLS AND INVOICES IT IS HELD THAT THE DISALLOWANCE OF DEPRECIATION IS NOT CALLED FOR WHEN THE APPELLANT HAD SUBSTANTIATED THE CLAIM WITH SUFFICIENT PROOF. I THEREFORE DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE OF DEP RECIATION OF RS.2 08 73 301/-. ITA NO. 266/HYD/2013 :- 5 -: THE ASSESSEE HAS PLACED STRONG RELIANCE ON THE CIT(A )S ACTION DELETING THE IMPUGNED DEPRECIATION DISALLOWANCE . 3.1. WE HAVE HEARD RIVAL SUBMISSIONS. COMING TO THE REVENUES SOLE SUBSTANTIVE ARGUMENT THAT THE CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 4 6A OF THE INCOME TAX RULES WE DO NOT FIND ANY SUCH ADMISSION OF ADDITIONAL EVIDENCE UNDER THE SUB-RULE (1) TO (3). WE FURTHER OBSERVE THAT EVEN IF IT IS TAKEN AS AN INSTANCE OF ASSES SEE HAVING FILED ITS DETAILED DOCUMENTS PERTAINING TO THE CORRESPONDING ASSETS FORMING SUBJECT MATTER OF THE DEPRECIATION CLAIM THE SAME APPEARS TO BE UNDER THE CL AUSE-4 OF RULE 46A ONLY WHEREIN THE CIT(A) IS ENTITLED TO ACT ON ITS OWN AS WELL WHERE IT CAN DIRECT THE ASSESSEE FOR PRODU CTION OF ANY SUCH DOCUMENT. WE MAKE IT CLEAR IN ADDITION TO ALL THIS THAT THE ASSESSEES CLINCHING FACT SUPPORTING THE ACQUIS ITION OF THE CORRESPONDING FIXED ASSETS QUA ITS DEPRECIATION CLAIM HAS NOWHERE BEEN CHALLENGED ON MERITS. WE THUS AFFIRM TH E CIT(A)S FINDINGS ON THIS FIRST ISSUE. 4. NEXT COMES THE REVENUES SECOND SUBSTANTIVE GRIEVANC E THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G SECTION 2(24)(X) R.W.S.36(1)(VA) R.W.S.43B DISALLOW ANCE OF EMPLOYEES PROVIDENT FUNDS DELAYED PAYMENT ON THE GROU ND THAT THE NECESSARY COMPLIANCE HAD BEEN MADE BEFORE THE DUE DATE OF FILING OF THE RETURN. 4.1. LEARNED DEPARTMENTAL REPRESENTATIVES CASE IS THAT IT IS NOT SECTION 43B BUT SECTION 36(1)(VA) WHICH GOVERNS THE IMPUGNED ISSUE AND THE ASSESSEE OUGHT TO HAVE DEPOSITED THE SAID EMPLOYEES PROVIDENT FUND BEFORE THE DUE DATE PRES CRIBED ITA NO. 266/HYD/2013 :- 6 -: IN THE CORRESPONDING STATUTE THAN THE DUE DATE OF FILI NG RETURN U/S.139(1) OF THE ACT. HE QUOTES CIT VS. GUJARAT STATE ROAD TRANSPORT CORP. (2014) [366 ITR 170] (GUJ) AND CIT V S. BHARAT HOTELS LTD. (2019) [410 ITR 417) (DELHI) DECIDING THIS ISSUE IN REVENUES FAVOUR. 4.2. WE FIND NO MERIT IN THE REVENUES INSTANT ARGUMENT S AS WELL SINCE THE EXPLANATORY MEMORANDUM TO FINANCE BILL 2021 HAS CLARIFIED TO THE EFFECT THAT THE EMPLOYEES PROVIDEN T FUNDS PAYMENT ISSUE COMES U/S.36(1)(VA) OF THE ACT ONLY BUT TH E SAME IS APPLICABLE FROM 01-04-2021 THAN HAVING ANY RETROSPECTIVE EFFECT. WE HOLD IN VIEW OF ALL THESE FACTS THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED EMPLOYEES PROVIDENT FUND DISALLOWANCE OF RS.10 06 303/- MADE BY THE ASSESSING OFFICER. 5. THE REVENUES THIRD SUBSTANTIVE GROUND SEEKS TO REV IVE THE ASSESSING OFFICERS ACTION INVOKING SECTION 40(A) (IA) DISALLOWANCE OF RS.10 88 067/- ON ACCOUNT OF ASSESSE ES FAILURE TO DEDUCT TDS. SUFFICE TO SAY IT IS AN ADMITTED FACT THAT NO TDS HAD BEEN DEDUCTED AT THE ASSESSEES BEHEST. THE CIT(A)S DETAILED DISCUSSION IN PG.6 TO 7 RELIES ON TH IS TRIBUNALS SPECIAL BENCH DECISION IN THE CASE OF MER ILYN SHIPPING AND TRANSPORT LTD. VS. ACIT (2012) 136 ITD 23 (SB) (VISAKHA.)(TRIB.) HOLDING THAT THE IMPUGNED DISALLOWAN CE APPLIES ONLY IN CASE OF EXPENSES REMAINING PAYABLE AS ON 31 ST MARCH OF THE RELEVANT PREVIOUS YEAR THAN THOSE ALREADY PAID. THIS REASONING NO MORE HOLDS THE GROUND IN VIEW OF TH E PALAM GAS SERVICE VS. CIT [394 ITR 300] (SC) SETTLING THE L AW THAT THE IMPUGNED STATUTORY PROVISION APPLIES BOTH IN CASE O F PAID ITA NO. 266/HYD/2013 :- 7 -: AS WELL AS PAYABLE EXPENSES. WE THUS REVERSE THE CIT( A)S CONCLUSION DELETING THE IMPUGNED DISALLOWANCE ON LEG ALITY ASPECT. 5.1. THE FACT ALSO REMAINS THAT THE LEGISLATURE HAS ITSE LF INCORPORATED SECTION 40(A)(IA) SECOND PROVISO IN THE ACT INSERTED VIDE FINANCE ACT 2012 W.E.F.01-04-2013 THAT TH E MAIN PROVISION ITSELF DOES NOT APPLY IN CASE THE ASSE SSEE IS NOT AN ASSESSEE IN DEFAULT U/S.201(1) 1 ST PROVISO OF THIS ACT. HON'BLE DELHI HIGH COURTS DECISION IN CIT VS. ANSAL LANDMARK TOWNSHIPS PVT. LTD. (2015) [377 ITR 635] (DEL) HOLDS THAT THE SAME IS A CURATIVE PROVISO HAVING RETROSPECTIVE EFFEC T. THERE IS HARDLY ANY DISPUTE THAT THE SAID AMENDED PROVISO; TO BE READ IN LIGHT OF SECTION 201(1) FIRST PROVISO STIPULATES THAT THE IMPUGNED STATUTORY PROVISION DOES NO T APPLY IN CASE THE ASSESSEE CONCERNED IS NOT THE ASSES SEE IN DEFAULT FOR HAVING NOT DEDUCTED TDS QUA THE CORRESPONDING EXPENDITURE PAYMENTS. WE THUS RESTORE THE INSTANT ISSU E BACK TO THE ASSESSING OFFICER TO BE EXAMINED AFRESH IN LIGHT OF SECTION 40(A)(IA) SECOND PROVISO R.W.S.201(1) FIRST PROVISO IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO FIL E ALL THE NECESSARY DETAILS TO BE FOLLOWED BY THREE EFFECTIVE O PPORTUNITIES OF HEARING. 6. LASTLY COMES REVENUES FOURTH SUBSTANTIVE GROUND SEEKING TO REVIVE SECTION 80G DONATION DISALLOWANCE OF RS.6 60 916/- ALLEGING THAT THE SAME VIOLATES RULE 46A (3) OF THE INCOME TAX RULES ON ACCOUNT OF ADMISSION OF ADDITI ONAL EVIDENCE IN LOWER APPELLATE PROCEEDINGS. ITA NO. 266/HYD/2013 :- 8 -: 6.1. WE FIND THAT OUR REASONING QUA THE REVENUES FIRST AND FOREMOST SUBSTANTIVE GROUNDS IN PRECEDING PARAGRAPHS ALSO APPLIES MUTATIS MUTANDIS HEREIN AS WELL SINCE THERE IS NO INDICATION THAT CIT(A) HAVING ADMITTED ADDITIONAL EVIDEN CE UNDER RULE 46A(1-3) OF THE INCOME TAX RULES. THIS FO URTH SUBSTANTIVE GROUND IS ALSO REJECTED THEREFORE. 7. THIS REVENUES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MAY 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD DATED: 13-05-2021 TNMM ITA NO. 266/HYD/2013 :- 9 -: COPY TO : 1.THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE- 16(3) HYDERABAD. 2.M/S.PRAGATI GREEN MEADOWS AND RESORTS PRIVATE LIM ITED 271/A ROAD NO.10 BANJARA HILLS HYDERABAD. 3.CIT(APPEALS)-V HYDERABAD. 4.CIT-IV HYDERABAD. 5.D.R. ITAT HYDERABAD. 6.GUARD FILE.