TMI Blog2014 (3) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... y invoking the aid of the provisions - as stated in the affidavit, the reasons advanced by the assessee are not supported by any cogent evidence – thus, condonation of delay in filing the appeals of the assessee cannot be accepted on the ground that the assessee was not able to establish that it has prevented by a reasonable cause in filing these appeals belatedly – Decided against Assessee. Disallowance u/s 40(a)(ia) of the Act – Held that:- There was no merit in the appeal of the Revenue - the amount has been taxed in the hands of Kranthi Constructions only - There may be so many reasons for accounting this contract receipt in the hands of the assessee and it was pleaded before us that because of mistake in 26AS issued by the contractor, the entry was made in the books of account of the assessee - the amount was offered for taxation in the hands of Kranthi Constructions and it cannot be brought to tax in the hands of the assessee. Being so there is no question of deduction of TDS by the assessee on the payment received by the Kranthi Constructions. There is insertion of second proviso to section 40(a)(ia) by Finance Act, 2012 w.e.f. 1.4.2013 wherein stated that disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 49,70,460 made by the assessing officer under the provisions of section 40(a)(ia) of the Act, being the payment made by the appellant to Shri. CH. Venkat Reddy and Chalapati Co., under the facts and circumstance of the case. 4. The learned authorities failed to appreciate the fact that the provisions of section 40[a][ia] of the Act is not applicable to the facts of the instant case since the recipient/payee i.e. Sri. CH. Venkat Reddy and Chalapati Co., has already declared the payments made by the appellant in his respective returns hence no disallowance is warranted under the provisions of section 40[a][ia] of the Act under the facts and circumstances of the case. 5. The learned authorities below are not justified in law in not appreciating that the deduction of tax is only one mode of recovery of tax and once the tax is recovered by any other mode and the recovery of tax on the amount which has suffered tax in the hands of payee is not permissible since the same will amount to taxing the same income twice i.e. once disallowance of expenditure in the hands of the payer and once again the amounts being taxed in the hands of the payee under the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horized representative of the Respondent/ Cross Objector. Subsequently, the revenue being aggrieved by the order of the learned CIT [A] filed an appeal before this Hon'ble Income-Tax Appellate Tribunal, Bangalore Bench, Bangalore. The notice of appeal filed before this Hon'ble Tribunal by the revenue challenging the order of the learned CIT [A] dated 18.07.2013 was received by the Respondent/Cross Objector only on 25.10.2013 in ITA No. 1079/Hyd/2013 [Department Appeal]. 4. The entre files pertaining to the Assessment Year 2007-08 which were in appeal before the CIT [A] was with the authorized representative who represented the Respondent/Cross Objector before the learned CIT [A]. The said authorized representative who represented the matter before the learned CIT [A] did not guide the Respondent I Cross Objector as regard to the next course of action. The Respondent I Cross Objector ought to have filed the cross objection within 30 days from the receipt of the communication from the Hon'ble Tribunal i.e. on or before 24.11.2013. 5. Subsequent, to the order of the first appellate authority, the revenue preferred an appeal before this Hon'ble Income-Tax .A:ppell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence or supporting document to suggest that the earlier counsel has wrongly advised the assessee. There is no confirmation from the earlier counsel what he has advised the assessee. It is observed that nothing has been brought on record by the assessee with regard to the fact that which counsel has advised the assessee as stated in the affidavit and there is no affidavit or letter from the concerned counsel, who has wrongly advised the assessee. The law assists those who are vigilant, not those who sleep over their rights. The delay cannot be condoned simply because the assessee's case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence, whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient cause within the meaning of the limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his issue was already decided in favour of the assessee while deciding the order passed u/s. 263 by the Tribunal. 9. Coming to the next ground relating to disallowance of Rs. 1,52,09,336 u/s. 40(a)(ia) of the Act. The facts relating to this addition are that as per TDS certificate enclosed, the assessee is in receipt of gross amount of Rs. 18,49,40,581 vide 6 bills - 3rd bill to 8th bill from Executive Engineer, PJP Executive Division - 3, Pebbair, Mahaboobnagar District. The issue for consideration is that no TDS was made on the third bill netted at Rs. 1,52,09,336/- by the assessee. When the same questioned, it was replied by the assessee that this amount was directly paid to M/s Kranthi Constructions by the deductee and therefore no TDS was required to be made by them. The assessee also produced a copy of the MOU for execution of project of Water Resource Development, confirmation letter from M/s Kranthi Constructions that the work was executed by them and the amount of Rs. 1,52,09,336/- was received by them and offered to tax in their hands. However, as the Assessing Officer could not get any clarity, from the above submissions of the assessee, disallowed the amount of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds Package No. 108 work bills and the constituents of the JV have a clear understanding of the total works to be carried out between themselves, including Package No. 108, there is no point to disagree to the claim that some payments were directly paid to M/s. Kranthi Constructions by the assessee based on MOU. The other evidences filed by the assessee like bank statements of M/s. Kranthi Construction and confirmation from them also indicate the same. In view of the foregoing discussions, he was in agreement with the claim of the assessee that out of six work bills shown in the TDS certificate amount relating to 3rd bill representing Rs. 1,52,09,336/- was paid directly to M/s Kranthi Constructions and in such a situation deducting tax on a payment directly credited to the books of constituent of JV by another constituent of JV does not arise. Accordingly, no disallowance under section 40(a){ia) is attracted in respect of this transaction and he directed the Assessing Officer to delete the disallowance of 1,52,09,336/-. Against this, the Revenue is in appeal before us. 13. We have heard both the parties and perused the material on record. In this case it is admitted that payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance u/s. 40(a)(ia) of the Act need not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act. It was held by various judicial authorities that its retrospective in nature since it has been introduced to eliminate unintended consequences which may cause undue hardship to the tax payer. For this purpose we refer to the order of the Tribunal Cochin Bench in the case of Antony D. Mundackal vs. ACIT vide ITA No. 38/Cochin/2013 dated 29.11.2013 for A.Y. 2009- 10 wherein it was held as follows: 7. We have heard the rival contentions and carefully perused the record. According to the assessee, there is no written contract between him and the persons doing polishing works. Accordingly, the assessee has contended before us that the provisions of sec. 194C shall not apply to the polishing charges. However, we notice that the assessing officer has given a clear finding that essential ingredients of a contract are very much available in the polishing works entrusted by the assessee. Further we notice that the CBDT, vide circular No.433 dated 25-09-1985 (1986)(157 ITR St. 27) has clarified that the provisions of sec. 194C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of sec. 40(a)(ia) shall apply only to amount payable and not to the amount paid. However, the Hon'ble Gujarat High Court in the case of CIT Vs. Sikandar Khan N Tunvar (357 ITR 312) and the Hon'ble Calcutta High Court in the case of CIT Vs. Crescent Export Syndicate (ITAT 20 of 2013) have held that the decision rendered by the Special Bench in the case of Meryline Shipping Transports is not a good law. The Ld A.R, however, placed reliance on the decision of Hon'ble Allahabad High Court in the case of Vector Shipping Services (357 ITR 642). On a careful perusal of the decision given by Hon'ble Allahabad High Court, we notice that the High Court has decided the issue referred to it on a different footing and has made a passing comment about the decision rendered by the Special Bench. Thus, the ratio of the said decision is different from that rendered in the case of Meryline Shipping and Transports by the Special bench. Hence, we are inclined to reject the contentions of the assessee on this point also. 7.3 The assessee placed reliance on the decision of Hon'ble Supreme Court in the case of Hindustan Coco-Cola beverages Ltd (supra) in order to cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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