Md.Golam Mortuja, Nadia v. Pr.C.I.T.-14, Kolkata

ITA 699/KOL/2019 | 2014-2015
Pronouncement Date: 22-11-2019 | Result: Partly Allowed

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Appeal Details

RSA Number 69923514 RSA 2019
Assessee PAN AKQPM2802A
Bench Kolkata
Appeal Number ITA 699/KOL/2019
Duration Of Justice 7 month(s) 13 day(s)
Appellant Md.Golam Mortuja, Nadia
Respondent Pr.C.I.T.-14, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2019
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 22-11-2019
Date Of Final Hearing 03-09-2019
Next Hearing Date 03-09-2019
Last Hearing Date 13-08-2019
First Hearing Date 13-08-2019
Assessment Year 2014-2015
Appeal Filed On 08-04-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI S.S.GODARA JUDICIAL MEMBER AND DR. A.L. SAINI ACCOUNTANT MEMBER ITA NO. 699 / KOL / 2019 ASSESSMENT YEAR :2014-15 MD. GOLAM MORTUJA C/O PARTHA SARATHI GUPTA ADVOCATE 100 BANK LANE HATAR PARA P.O. KRISHNAGAR DIST. NADIA- PIN-742202 [ PAN NO.AKQPM 2802 A ] V/S . PRINCIPAL COMMISSIONER OF INCOME TAX-14 2 ND FLOOR 3 GOVT. PLACE (WEST) KOLKATA-700001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI K.M.ROY FCA & PARTHA SARATHI GUPTA ADVOCATE /BY RESPONDENT SHRI A.K. NAYAK DR /DATE OF HEARING 03-09-2019 /DATE OF PRONOUNCEMENT 22-11-2019 / O R D E R PER S.S.GODARA JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 ARISES AGAINST PRINCIPAL COMMISSIONER OF INCOME TAX-14 KOLKATAS ORDER DATED 11.02.2019 PASSED IN CASE M.NO.PCIT-14263/18-19/7528-30 INVOL VING PROCEEDINGS U/S 263 OF THE INCOME TAX ACT 1961; IN SHORT THE ACT . HEARD BOTH THE PARTIES. CASE FILE AND RECORDS PERU SED. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSEES PLEADINGS CHALLENGE CORRECTNESS OF THE PCITS ACTION REVISING THE REGUL AR ASSESSMENT IN QUESTION ITA NO.699/KOL/2019 A.Y. 2014-15 MD. GOLAM MORTUJA VS. PCIT-14 KOL. PAGE 2 FRAMED IN HIS CASE ON 04.11.2016 ASSESSING HIS TOTA L INCOME AT 31 47 440/- DECLARED IN THE RETURN DATED 29.03.2016. THE CIT IS OF THE VIEW THAT THE SAME IS ERRONEOUS CAUSING PREJUDICE TO INTEREST OF THE R EVENUE SINCE THE ASSESSEE HAD NOT COMPLIED WITH THE TDS DEDUCTION AS PRESCRIB ED IN CHAPTER-XVII-B OF THE ACT. THE IMPUGNED REVISION DIRECTION UNDER CHAL LENGE TO THIS EFFECT READ AS UNDER:- 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE ASSESSEE. AS PER THE PROVISIONS OF SECTION 40(A)(IA ) OF THE IT ACT 1961 ANY AMOUNT PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR B EING RESIDENT FOR CARRYING OUT ANY WORK ( INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WOR K ) SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT & GAINS OF BUSINESS AND PROFESSION ON WHICH TAX IS DEDUCT9IBLE 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 DATE SPECIFI ED IN SUB-SECTION (1) OF SECTION 139. 4.1 THE DUE DATE FOR FILING THE RETURN OF INCOME UN DER SECTION 139(1) IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2014- 15 WAS 30 TH NOVEMBER 2014 ( AS EXTENDED BY THE CBDT VIDE ITS ORDER UNDER SECTIO N 119 OF THE IT ACT 1961 DATED 26 TH SEPTEMBER 2014 ). IT IS THE POSITION OF THE ASSESSEE THAT ALTHOUGH THE TAX WAS DEDUCTED AT SOURCE ON THE PAYMENTS MADE TO THE SUB-CONTRACTORS SUCH TAX WAS NOT PAID ON OR BEFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139. THE LD. A/R OF THE ASSESSEE IN HIS WRITTEN SUBMISSION HAS SUBMITTED THAT THE ASSESSEE DEDUCTE D INCOME TAX AT SOURCE IN TERMS OF SECTION 194C OF THE IT ACT 1961 ON ACC OUNT OF LABOUR CONTRACT PAYMENTS TO M/S PARI CONSTRUCTION AND M/S REGAL CON STRUCTION FOR THE A.Y 2014-15 AND THEREAFTER DEPOSITED THE TDS AMOUNT O N 29/03/2016 THAT IS WITHIN THE PERMISSIBLE LAST DATE OF FILING THE RETU RN OF INCOME FOR THE ASST. YR. 2014-15 AND NOT BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S. 139(1). THE ASSESSEE THEREFORE HAS PAID THE TAX WITHIN TH E TIME ALLOWED UNDER SUB- SECTION(4) OF SECTION 139 OF THE IT ACT 1961 AND N OT WITHIN THE DUE DATE ALLOWED UNDER SECTION 139(1) OF THE IT ACT 1961 FOR FILLING THE RETURN OF INCOME. IN SUCH A SITUATION THE EXPENDITURE OF RS.1 26 35 405/- ON ACCOUNT OF THE LABOUR CONTRACTORS M/S PARI CONSTRUCTION ( RS.85 16 018/- ) AND ON ACCOUNT OF M/S REGAL CONSTRUCTIONS ( RS.41 19 387/- ) WAS REQUIRED TO BE DISALLOWED BY THE ASSESSING OFFICER U/S40(A)(IA) OF THE IT ACT 1 961 WHICH HE FAILED TO DO. IN THE GIVEN FACTS OF THE CASE THE ACTION OF THE ASSE SSING OFFICER CLEARLY RESULTED IN UNDER-ASSESSMENT OF INCOME OF RS.1 26 35 405/- A ND CONSEQUENT SHORT LEVY OF TAX. THE ORDER OF THE AO BEING AGAINST THE PROVISION OF THE ACT AND RESULTING IN UNDER-ASSESSMENT OF INCOME IS CLEARLY AN ERRONEOUS ORDER IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. 4.2 THE ASSESSEE HAS RELIED ON THE CASE OF CIT V. S .K. TEKRIWAL (2014) 361 ITR 432 (CAL) TO SUPPORT HIS CONTENTION THAT THE OR DER COULD NOT BE REVISED U/S. 263 OF THE IT ACT 1961 AND THAT NO DISALLOWANCE CO ULD BE MADE OF THE EXPENDITURE ON ACCOUNT OF LABOUR PAYMENT OF RS.1 26 35 405/- FOR FAILURE ON ITA NO.699/KOL/2019 A.Y. 2014-15 MD. GOLAM MORTUJA VS. PCIT-14 KOL. PAGE 3 HIS PART TO PAY THE TAX DEDUCTED AT SOURCE ON SUCH PAYMENTS WITHIN THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE IT ACT 1961. I HAVE PERUSED THE ABOVE CASE LAW AND FIND THAT THE SAME I S NOT APPLICABLE TO THE ACTS OF THE PRESENT CASE. THE FACTS IN THE ABOVE CA SE WERE THAT THE ASSESSEE PAID MACHINERY HIRE CHARGES ON WHICH IT DUCTED TDS AT 1% U/S 194C. THE AO CLAIMED THAT THE AMOUNT WAS IN THE NATURE OF RENT AND DTDS AT 10% OUGHT TO HAVE BEEN DEDUCTED U/S 194-I. A PROPORTIONATE DISAL LOWANCE U/S. 40(A)(IA) WAS MADE ON THE GROUND THAT THERE WAS A FAILURE TO DEDUCT TDS ON THE PAYMENT. THE TRIBUNAL ( 48 SOT 515 ) UPHELD THE ASSESSEES PLEA THAT S. 40(A)(IA) DISALLOWANCE COULD NOT BE MADE WHEN THERE WAS A SHORTFALL IN TDDS DEDUCTION. ON APPEAL BY THE DEPARTMENT THE HON'BL E HIGH COURT HELD DISMISSING THE APPEAL THAT SECTION 40(A)(IA) CAN B E INVOKED ONLY WHEN THE TWO CONDITIONS NAMELY THAT TAX IS DEDUCTIBLE AT S OURCE AND SUCH TAX HAS NOT BEEN DEDUCTED IS SATISFIED. WHERE TAX IS DEDUCTED B Y THE ASSESSEE UNDER A WRONG PROVISIONS OF TD AND THERE IS A SHORTFALL SE CTION 40(A)(IA) DISALLOWANCE CANNOT BE MADE. THIS CASE LAW CANNOT THEREFORE CO ME TO THE RESCUE OF THE ASSESSEE. 4.3. IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX DATED 10/02/2000 THE HON'BLE SUPREME COURT HAS HELD THAT AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SA ME CATEGORY FALL ORDER PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL J USTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UN DERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. THE HON'BLE SUPREME COURT HAS FURTHER HELD THE THE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF TH E ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS OR DER OF THE INCOME TAX OFFICER THE REVENUE IS LOSING TAX LAWFULLY PAY ABLE BY A PERSON IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF T HE REVENUE . 4.4 APPLYING THE ABOVE OBSERVATION OF THE HON'BLE S UPREME COURT AND THE PROVISIONS OF THE ACT TO THE PRESENT CASE IT IS CL EAR BEYOND ANY IOTA OF DOUBT THAT THE ORDER OF THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE SINCE THE AO HAS PASSED THE ORDER WH ICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AS A RESULT OF WHICH THERE IS AN UNDER- ASSESSMENT OF INCOME AND THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY THE ASSESSEE. THE ASSESSEES RELIANCE IN THE 1 ST PROVISO TO SECTION 201(1). THE 2 ND PROVISO TO SEC. 40(A)(IA) OF THE IT ACT 1961 WOUL D ALSO BE OF NO HELP TO THE ASSESSEE SINCE IT IS APPLICABLE ONLY TO A CASE WHER E THE ASSESSEE FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDAN CE WITH THE PROVISIONS OF CHAPTER XVII-B. IN THIS CASE HOWEVER THE ASSESSEE HAS CLAIMED TO HAVE DEDUCTED TAX AT SOURCE AND PAID THE SAME ON 29.03.2 016. 5. IN VIEW OF THE ABOVE THE ASSESSMENT ORDER U/S. 143(3) DATED 04/11/2016 FOR THE A.Y 2014-15 IS SET ASIDE TO THE FILE OF THE AO ON THE ISSUE OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE IT ACT 1961 AS DISCUSSED HEREINABOVE AND ALSO STATED IN THE SHOW CAUSE NOTIC E. THE AO SHALL PASS A FRESH ASSESSMENT ORDER ON THE ISSUE IN LIGHT OF THE FINDINGS AND OBSERVATION ITA NO.699/KOL/2019 A.Y. 2014-15 MD. GOLAM MORTUJA VS. PCIT-14 KOL. PAGE 4 MADE BY ME IN THE ORDER HEREINABOVE AND AFTER GIVIN G THE ASSESSEE OPPORTUNITY OF BEING HEARD AND IN ACCORDANCE WITH LAW. 3. MR.ROY VEHEMENTLY SUBMITTED DURING THE COURSE OF HEARING THAT THE PCIT HAS ERRED IN LAW AND ON FACTS IN INVOKING HIS REVISION DIRECTION SINCE THE REGULAR ASSESSMENT IN ISSUE IS NEITHER ERRONEOUS NO R PREJUDICED TO THE INTEREST OF THE REVENUE. HE FURTHER REITERATES THE ASSESSEE S EXPLANATION BEFORE THE PCIT CONTESTING HIS REVISION SHOW-CAUSE NOTICE WHIC H STANDS REJECTED AND CONTENDS THAT THE IMPUGNED ASSESSMENT DATED 04.11.2 016 DESERVES TO BE RESTORED. 4. THE REVENUE STRONGLY SUPPORTS THE PCITS ASSUMPT ION OF REVISION JURISDICTION AS PER THE FOREGOING DETAILED DISCUSSI ON. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. WE FIND THAT ALTHOUGH THE ASSESSEE HAS CONTESTED THE ISSUE OF TDS DEDUCTION ON ITS PAYMENTS IN THE NATURE OF LABOUR CHARGES TO LABOUR CONTRACTORS WITHOUT DEDUCTING TDS IN THE RELEVANT ASSESSMENT YEAR 2014- 15 IT HAS ITSELF BEEN FOUND TO HAVE DEDUCTED TDS AT SOURCE ON THE VERY PA YMENTS AND PAID THE SAME ON 29.03.2016 I.E. IN ASSESSMENT YEAR 2016-17. THERE IS ALSO NOT DENIAL OF THE FACT THAT IMPUGNED LABOUR CHARGES INDEED INV ITE TDS DEDUCTION U/S 194C OF THE ACT. WE THEREFORE FIND NO ILLEGAL OR IR REGULARITY IN PCITS ASSUMPTION OF REVISION JURISDICTION IN THE GIVEN FA CTS AND CIRCUMSTANCES OF THE CASE. 6. NEVERTHELESS WE ALSO FIND THAT ALTHOUGH THE PCI T HAS RESTORED THE ASSESSMENT FINDINGS TO THE ASSESSING OFFICER ON ONE HAND THERE IS NO CLARITY IN HIS DIRECTIONS UNDER CHALLENGE ON CLINCHING ASPE CT OF THE ASSESSEE TO HAVE DEDUCTED TDS AT SOURCE FOLLOWED BY ITS PAYMENT ON 2 9.03.2016. BOTH THE LEARNED REPRESENTATIVES ARE FAIR ENOUGH IN INVITING OUR ATTENTION TO SEC.40(A)(IA) ( FIRST PROVISO ) GRANTING LIBERTY TO AN ASSESSEE TO CLAIM SUCH EXPENDITURE DEDUCTION IN THE YEAR OF TDS DEDUCTION OF PAYMENT. WE THEREFORE ITA NO.699/KOL/2019 A.Y. 2014-15 MD. GOLAM MORTUJA VS. PCIT-14 KOL. PAGE 5 REVERSE THE PCITS REVISION DIRECTION TO THIS LIMIT ED EXTENT AND MAKE IT CLEAR THAT THE ASSESSING OFFICERS CONSEQUENTIAL ASSESSME NT SHALL TAKE NOTE OF ALL FACTUAL / LEGAL ASPECTS OF THE ISSUE AS PER LAW. 7. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT 22 /11/2019 SD/- SD/- ( &) (( &) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA *DKP )- 22 / 11 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-MD. GOLAM MORTUNA C/O PARTHA SARATHI GUP TA ADVOCATE 100 BANK LANE HATAR PARA P.O. KRISHNAGAR DIST. NADIA PIN-741101 2. /RESPONDENT-PR.CIT -14 2 ND FLOOR 3 GOVT. PLACE (WEST) KOLKATA-001 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4 4 / DR ITAT KOLKATA 6. = / GUARD FILE. BY ORDER/ /TRUE COPY/ 4