Dr. Prasad Narayan Honap, Pune v. ITO, 5(2), Pune, Pune

ITA 78/PUN/2010 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 7824514 RSA 2010
Assessee PAN AAEPH9835L
Bench Pune
Appeal Number ITA 78/PUN/2010
Duration Of Justice 1 year(s) 6 month(s) 3 day(s)
Appellant Dr. Prasad Narayan Honap, Pune
Respondent ITO, 5(2), Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 22-07-2011
Date Of Final Hearing 28-04-2011
Next Hearing Date 28-04-2011
Assessment Year 2004-2005
Appeal Filed On 18-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I C SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 78/PN/10 (ASSTT. YEAR: 2004-05) DR PRASAAD NARAYAN HONAP .. APPELLANT 38/1 AMOD ANKUR KOTHRUD PUNE PAN AAEPH9835L VS. INCOM-TAX OFFICER .. RESPONDENT WD. 5(2) PUNE APPELLANT BY: SHRI NIKHIL PATHAK RESPONDENT BY: SMT NEERA MALHOTRA ORDER PER G.S. PANNU AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III PUNE DATED 7.10.2009 WHICH IN TURN HAS ARISEN FROM AN ORDER DATED 31.3.2009 PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 O F THE INCOME- TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO T HE ASSESSMENT YEAR 2004-05. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS T HAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED I N UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN REDUCING THE ASSESSEES CLAIM FO R THE CREDIT OF TAX DEDUCTED AT SOURCE (TDS) BY PASSING AN ORDER UNDER SECTIO N 154 OF THE ACT. 3. THE ASSESSEE IS A PRACTICING DOCTOR DERIVING INCOME MAIN LY FROM EXAMINATION/CONSULTATION FEES RECEIVED FROM IN-PATIENTS IN SURYA HOSPITAL P. LTD. 2 DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE RECEIVED TOTAL PROFESSIONAL INCOME OF RS 10 41 451/- AND THE TDS ON PAYMENTS MADE BY VARIOUS HOSPITAL WAS RS 85 823/-. ALTHOUGH OTHER HOSPITALS DEDUCTED TAX A T SOURCE FROM ACTUAL PAYMENTS MADE TO THE ASSESSEE SURYA HOSPITAL P. LTD. DE DUCTED TAX AT SOURCE ON THE AMOUNT DUE IRRESPECTIVE OF ACTUAL PAYMENT MADE TO THE ASSESSEE. THE GROSS RECEIPTS INCLUDED THE AMOUNT OF TDS MADE I.E. ACTU AL RECEIPTS IN BANK ACCOUNT PLUS TOTAL TDS MADE I.E. 100% OF TDS MADE ON A MOUNT DUE TO THE ASSESSEE. THUS THE EXCESS TDS BEING DIFFERENCE IN TDS ON A MOUNT DUE AND TDS ON ACTUAL RECEIPTS WAS ALSO SHOWN AS PROFESSIONAL RECEI PTS IN THE CASE OF SURYA HOSPITAL P. LTD. WHILE FILING THE RETURN OF IN COME THE ASSESSEE HAD CLAIMED CREDIT FOR THE TOTAL AMOUNT OF TDS MADE ALTHO UGH HE HAD NOT OFFERED THE CORRESPONDING INCOME FOR TAX DURING THE YEAR. ON THESE FACTS THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 154 INTENDING TO R ECTIFY THE EXCESS CREDIT OF TDS ALLOWED WHILE ASSESSING THE INCOME AS COMPARED TO ACT UAL RECEIPTS DISCLOSED BY THE ASSESSEE IN HIS RETURN. ACCORDINGLY THE ASS ESSING OFFICER PASSED THE IMPUGNED ORDER UNDER SECTION 154 OF THE ACT. 4. BEING AGGRIEVED THE ASSESSEE TOOK UP THE MATTER IN A PPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) AND RAISED VARIOUS O BJECTIONS. IT WAS SUBMITTED THAT THE ORDER UNDER SECTION 154 WAS PASSED WIT HOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO EXPLAIN HIS CASE; THAT THE MATTER UNDER CONSIDERATION IS SUCH THAT IT IS NOT COVERED UNDER MISTAKE APPARENT FROM RECORD. IT WAS ALSO CONTENDED THAT THE ASSESSEE SHOULD BE GIVEN CRE DIT OF EXCESS TDS MADE BECAUSE OF THE CASH SYSTEM OF ACCOUNTING FOLLOWED BY HIM AND FURTHER THAT THE EXCESS TDS MADE HAS BEEN DISCLOSED AS INCOME IN THE RET URN FILED. 5. THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT CONVI NCED WITH THE ABOVE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED THAT BEFORE PASSING ORDER UNDER SECTION 154 AN OPPORTUNITY OF BEING HEARD WAS A LLOWED BY THE ASSESSING OFFICER TO THE ASSESSEE WHO DID NOT AVAIL THE OPPORTU NITY AND SIMPLY SOUGHT FOR ADJOURNMENT. AS PER THE COMMISSIONER OF INCOME-TAX (APP EALS) THERE WAS NO 3 INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER IN REDU CING THE ASSESSEES CLAIM OF TDS AND RAISING A DEMAND OF RS 48 094/- BY NOT ALLOWI NG TDS FOR THE INCOME WHICH HAS NOT BEEN OFFERED TO TAX DURING THE YEAR UND ER CONSIDERATION. THE COMMISSIONER OF INCOME-TAX (APPEALS) HELD THAT WHETHER THE TDS IS ALLOWABLE OR NOT IN THE YEAR IN WHICH THE INCOME IS OFFERED TO TAX IS NOT A DEBATABLE ISSUE AND THEREFORE THE ISSUE INVOLVED IN THE CASE WAS OF THE CHAR ACTER OF A MISTAKE APPARENT FROM RECORD. IN THIS VIEW OF THE MATTER TH E COMMISSIONER OF INCOME-TAX (APPEALS) AFFIRMED THE ACTION OF THE ASSESSING OFFICER A GAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE POINTE D OUT THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED N PASSING THE IMPUGNED ORDER BECAUSE THE MISTAKE SOUGHT TO BE RECTIFIED WAS NOT AN APPARENT MISTAK E BUT ON WHICH TWO VIEWS ARE POSSIBLE AND DEBATABLE. IN THIS CONNECTION IT WAS POINTED OUT THAT THE ASSESSEE HAD CLAIMED CREDIT FOR THE TDS ACTUALLY DEDUCTED A T SOURCE DURING THE YEAR WHEREAS THE ASSESSING OFFICER HAD ALLOWED THE CREDI T FOR THE TDS ON A PROPORTIONATE BASIS CORRESPONDING TO THE INCOME OFFERED FOR ASSESSMENT. IN THIS REGARD REFERENCE WAS MADE TO THE DECISION OF THE COCH IN BENCH IN THE CASE OF SMT PUSHPA VIJOY V ACIT TO POINT OUT THAT THE TDS MA DE IN A PARTICULAR ASSESSMENT YEAR OUGHT TO BE GIVEN CREDIT IN THE RESPECTIV E ASSESSMENT YEAR ITSELF AND THERE IS NO PROVISION IN THE ACT TO DIVIDE THE TDS INTO DIFFERENT PROPORTIONATE PIECES AND TO GIVE CREDIT ON THE BASIS WHETHER THE ENTIR E INCOME HAS BEEN OFFERED FOR ASSESSMENT OR NOT. THUS THE VIEW TAKEN BY T HE COCHIN BENCH SUPPORTED THE ASSESSEE AND THUS IT IS CONTENDED THAT WHE RE TWO VIEWS ARE POSSIBLE SUCH ISSUE CANNOT BE REGARDED AS AN APPARENT MIST AKE SO AS TO BE RECTIFIED UNDER SECTION 154 OF THE ACT. 7. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE DEFENDED THE ORDER OF THE ASSESSING OFFICER BY POINTING OUT THA T THERE WAS A MISTAKE APPARENT FROM RECORD INASMUCH AS THE ASSESSEE HAD CLAIMED A ND WAS ALLOWED CREDIT FOR TDS WHERE THE CORRESPONDING INCOME WAS NOT OFFERED FOR ASSESSMENT. 4 THE LEARNED DEPARTMENTAL REPRESENTATIVE DEFENDED TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) WHEREIN SUCH A MISTA KE HAS BEEN TREATED AS AN APPARENT MISTAKE AND NOT A DEBATABLE ISSUE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN THIS CASE THE ASSESSEE FILED A RETURN OF INCOME DECLARING NIL INCOME WHI CH INTER ALIA INCLUDED INCOME FROM MEDICAL PROFESSION. IN THE RETURN OF INCOME ASSESSEE CLAIMED CREDIT FOR TDS AMOUNTING TO RS 85 823/- WHICH RELATED TO TH E PROFESSIONAL FEES. IN THE PORTION OF RECEIPTS FROM SURYA HOSPITALS P LTD. TDS W AS DEDUCTED ON THE AMOUNT ACTUALLY ACCRUING TO THE ASSESSEE DURING THE YEAR AND IN THE RETURN OF INCOME ASSESSEE DECLARED PROFESSIONAL RECEIPTS ON CASH SYSTEM OF ACCOUNTING AND THEREFORE TOTAL PROFESSIONAL RECEIPTS OF RS 10 41 451/- WERE DECLARED. HOWEVER IN RELATION TO THE TDS MADE ON FEES ACCRUED BUT NOT PAID SUCH AMOUNT OF TDS WAS INCLUDED IN THE TOTAL OF TDS CREDIT CLAIMED BY THE ASSESSEE AT RS 85 823/- AND SUCH AMOUNT OF TDS FORMED PART OF THE PROFESSIONAL RECEIPTS DECLARED. THE RETURN SO FILED WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AS SUCH. SUBSEQUENTLY THE ASSESSING OFFICER RECTIFIED THE OR DER PASSED UNDER SECTION 143(1) WITHDRAWING THE CREDIT FOR THE TDS TO T HE EXTENT OF RS 33 750/-. ACCORDING TO THE ASSESSING OFFICER THIS EXCESS TDS WAS IN REL ATION TO THE PROFESSIONAL RECEIPTS NOT ACTUALLY RECEIVED BY THE ASSE SSEE FROM SURYA HOSPITAL BUT WAS DEDUCTED BY THE HOSPITAL ONLY ON ACCRUAL BASIS. SI NCE THE ASSESSEE HAD NOT DISCLOSED THE CORRESPONDING INCOME IN THE RETURN TH E CORRESPONDING TDS WAS DENIED CREDIT IN THE ORDER PASSED UNDER SECTION 154 OF THE ACT AS AN APPARENT MISTAKE. 9. THE FIRST AND FOREMOST PLEA OF THE ASSESSEE IS THAT TH E EXCESS CREDIT FOR TDS ALLOWED IN THE INTIMATION PASSED UNDER SECTION 143 (1) IS NOT A MISTAKE APPARENT FROM RECORD SO AS TO BE RECTIFIED UNDER SECTION 154 OF THE ACT. IN SUPPORT REFERENCE HAS BEEN MADE TO THE DECISION OF THE COCHIN BENCH IN THE CASE OF SMT PUSHPA VIJOY (SUPRA). WE HAVE PERUSED THE SA ID DECISION AND FIND THAT THE PROPOSITION APPROVED THEREIN SUPPORTS THE CAS E OF THE ASSESSEE. WITHOUT 5 GOING INTO THE MERITS OF THE CLAIM IT IS CLEAR THAT TH E PROPOSITION ADVANCED BY THE ASSESSEE IS A POSSIBLE VIEW SUPPORTED BY THE COCHIN BENCH OF T HE TRIBUNAL IN THE CASE OF SMT PUSHPA VIJOY (SUPRA) AND IN THIS VIEW OF T HE MATTER WE FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT THE SAID MISTAKE IS NOT AMENABLE FOR RECTIFICATION UNDER SECTION 154 AS IT IS NOT AN APPARENT MISTAKE. EVEN OTHERWISE WE FIND THAT IN THIS CASE SECTION 154 OF THE ACT HAS BEEN INVOKED BY THE ASSESSING OFFICER TO CARRY OUT RECTIFICATION OF AN INTIMAT ION PASSED UNDER SECTION 143(1) OF THE ACT. QUITE CLEARLY THE MISTAKES RECTIFIABLE UNDER SECTION 154 IN THIS CASE CANNOT GO BEYOND THE ADJUSTMENTS WHICH ARE PERMISSIBLE IN TERMS OF SECTION 143(1) ONLY. IN TERMS OF SECTION 143(1)(A) THE TOTAL INCOME OR LOSS SHOWN IN THE RETURN IS TO BE COMPUTED AFTER MAKING ADJUSTMENTS ON ACC OUNT OF (I) ANY ARITHMETICAL ERROR IN THE RETURN; OR (II) AN INCORRE CT CLAIM IF SUCH INCORRECT CLAIM IS APPARENT FROM ANY INFORMATION IN THE RETURN. IN THE PRESENT CASE THE IMPUGNED ADJUSTMENT CAN AT BEST BE ON ACCOUNT OF AN INCORRECT CLAIM AS PER SUB-CLAUSE (II) OF SECTION 143(1)(A) OF THE ACT. IT IS PERTINENT TO NOT E THAT THE INCORRECT CLAIM REFERRED TO IN SECTION 143(1)(A)(II) HAS BEEN DEFINED IN THE EXPLANATION BELOW 143(1) TO MEAN A CLAIM ON THE BASIS OF AN ENTRY IN THE RETURN OF AN ITEM WHICH IS INCONSISTENT WITH ANOTHER ENTRY OF THE SAME OR SOME OTHE R ITEM IN THE RETURN OR IN RESPECT OF WHICH THE INFORMATION REQUIRED TO BE FURNIS HED HAS NOT BEEN SO FURNISHED IN THE RETURN OR IN RESPECT OF A DEDUCTION WH ERE SUCH DEDUCTION EXCEEDS SPECIFIED STATUTORY LIMIT. IN OUR CONSIDERED OPINI ON THE IMPUGNED ADJUSTMENT SOUGHT TO BE MADE OUT BY THE ASSESSING OFFICER DOES NOT FALL IN ANY OF THE CATEGORIES OF INCORRECT CLAIM AS UNDERSTOOD FOR THE PURPOSES OF SEC. 143(1)(A)(II) OF THE ACT. AS A CONSEQUENCE THEREOF SU CH AN ADJUSTMENT WOULD CERTAINLY BE OUTSIDE PURVIEW OF SECTION 154 ALSO. THERE FORE IN VIEW OF OUR AFORESAID DISCUSSION WITHOUT GOING INTO THE MERITS OF TH E ADJUSTMENT WE HOLD THAT THE SAME IS IMPERMISSIBLE IN TERMS OF THE LIMITED POWE RS AVAILABLE UNDER SECTION 154 OF THE ACT. IN THE RESULT THE ORDER OF THE COMMI SSIONER OF INCOME-TAX 6 (APPEALS) IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW CREDIT OF TDS OF RS 35 455/-. 11. AS A RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JULY 2011. SD/- S/- (I C SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 22 ND JULY 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ITO WD 5(2) PUNE 3. THE CIT(A)-III PUNE 4. THE CITIII PUNE/ 5. THE D.R B BENCH PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE