Chhotubhai Ramubhai Patel, Surat vs Department Of Income Tax

Income-tax Officer, Ward -6(1), Surat....... Appellant Vs. M/s Chhotubhai Ramubhai Patel, Patel Street, At & Post Bhatalal, Tal. Choryasi, Surat....... Respondent

PAN :ABRPP 3188N

Appellant by : Shri Narendra Singh, Sr. DR Respondent by : Shri M. K. Patel, AR

Date of hearing :30/6/2015 Date of pronouncement : 30/06/2015

ORDER

PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER.

This is an appeal filed by the Revenue against the order of

CIT(A) dated 21.9.2011 on the following grounds :- ITA No.106/Ahd/2012 2

Asst. Years. 2007-08

1. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in deleting an addition of Rs.1,79,05,259/- made by the Assessing Officer as per the provisions of section 40(a)(ia) of the Income-tax Act.

2. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in holding that "the liability to deduct tax ceases on receipt of form No.151 from the sub contractors'' is not correct as and when the assessee has failed to file the Form No.15J before the prescribed authority and within the prescribed time limit.

3. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in admitting the additional evidences as per the provisions of Rule 46A of the Income-

tax Rule.

4. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in deleting an addition made by the Assessing Officer on account of difference in amount of income, without verification of the contention of the assessee that the excess TDS is pertains to the income of earlier years.

5. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat ought to have upheld the order of the Assessing Officer.

6. It is therefore, prayed that the order of the CIT(A) -IV, Surat may be set aside and that of the Assessing Officer restored.

2. The only issue before us with regard to deletion of addition

of Rs.1,79,05,259/- made under section 40(a)(ia) r.w.s. section ITA No.106/Ahd/2012 3 Asst. Years. 2007-08

194C. The assessee has filed his return of income for AY 2007-08

declaring total income at Rs.475,921/- on 22.10.2007. The return

of income was duly processed u/s 143(1) of the Act. The case was

selected for scrutiny, accordingly, notice u/s 143(2) of the Income-

tax Act was issued on 22.09.2008. During the course of

assessment proceedings the Assessing Officer had observed that

the assessee had claimed hire expenses of Rs.1,79,05,259/- but no

deduction of tax at source was made as required u/s 194C. In

response to the show cause notice it was submitted on behalf of the

assessee that no deduction had been made as declarations had been

received from sub-contractor in form No.15I. It was submitted that

form No.15J for non-deduction of TDS had been filed on 6.5.2008.

The similar set of form No.15J was also submitted on 30.11.2009

i.e. after 2 ½ years. The date of issue of show cause was only an

afterthought to cover up for lapse of non-deduction at source. He

held that the assessee was liable to deduct tax at source and since

no deduction had been made or deposited within the prescribed

time in the government account, the payment of Rs.1,79,05,259/- ITA No.106/Ahd/2012 4 Asst. Years. 2007-08

was hit by Section 40(a)(ia). Therefore, he held that the hire

charges claimed were inadmissible.

3. The matter was carried in appeal before the first appellate

authority. The CIT(A) considering the submissions made on behalf

of the assessee granted relief to the assessee. Same has been

opposed by the Revenue before us. It is pleaded by the Revenue

that CIT(A) has erred in deleting the disallowance of

Rs.1,79,05,259/-. So the order of CIT(A) be set aside and that of

the Assessing Officer be restored. On the other hand, the ld. AR

supported the order of CIT(A).

4. After going through the material on record, we find that

provisions of section 40(a)(ia) come into play if the relevant TDS

provisions in this case section 194C has been violated. The

assessee is a contractor and as per section the assessee was

required to deduct tax at source from sub-contractors unless the

sub-contractor falls within any of the exceptions provided in the ITA No.106/Ahd/2012 5 Asst. Years. 2007-08

Act. As per the assessee he had received declaration in form

No.15I from the sub-contractors due to which it had not deducted

tax at source. Undisputedly form No.15J was filed late- once on

6.5.2008 and again on 30.11.2009. The Assessing Officer

considered only form No.15J which was filed on 30.11.2009 and

since the date of filing was after issue of show cause notice, in this

case it was held that this was an afterthought. The Assessing

Officer ignored the claim of the assessee both before him and the

ITO TDS that form No.15J had been filed on 6.5.2008 also. In

appeal, it was found by CIT(A) that the first date of filing form

No.15J was before the date of issue of show cause notice. Hence

the theory of afterthought was not entertained by the CIT(A). He

observed that the assessee was not liable for deduction of tax at

source and in violation of provisions of section 194C. There is no

condition prescribed in the Act or otherwise that filing of form

No.15J is a pre-condition for non-deduction of tax at source. The

liability to deduct tax ceases on receipt of form No.15I from the

sub-contractor. Therefore, the assessee cannot be held to be in ITA No.106/Ahd/2012 6 Asst. Years. 2007-08

violation of provisions of section 194C in case of delay in filing of

form No.15J and therefore the provisions of section 40(a)(ia) was

not attracted in this case. This view is fortified by the decision in

the case of Vipin P. Mehta vs.ITO in ITA No.3317/Mum/2010 and

by the decision of Ahmedabad Tribunal 'Á' Bench in the case of

Valibhai Khanbhai Mankad ITA NO.2228/Ahd/2009 dated

29.4.2011. There is no infirmity in this finding of CIT(A). The

same is upheld.

5. In the result, the appeal filed by the Revenue is dismissed.

Pronounced in the open Court on this the day 30th of June, 2015 Sd/- Sd/-

(Anil Chaturvedi) (Shailendra Kumar Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated :30/6/2015

Mahata/- Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. The CIT concerned ITA No.106/Ahd/2012 7 Asst. Years. 2007-08

4. The CIT(A) concerned 5. The DR, ITAT, Ahmedabad 6. Guard File BY ORDER

Dy.Registrar,ITAT, Ahmedabad

1. Date of dictation: 30/6/2015

2. Date on which the typed draft is placed before the Dictating Member: 30/6/2015 other Member:

3. Date on which approved draft comes to the Sr. P. S./P.S.:

4. Date on which the fair order is placed before the Dictating Member for pronouncement: __________

5. Date on which the fair order comes back to the Sr. P.S./P.S.:

6. Date on which the file goes to the Bench Clerk: 1/7/2015

7. Date on which the file goes to the Head Clerk:

8. The date on which the file goes to the Assistant Registrar for signature on the order:

9. Date of Despatch of the Order: