TMI Blog2019 (4) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to condone delay of 2119 days which translates into delay of almost six years and appeal of the assessee is dismissed on this short ground only. The assessee fails in this appeal. - I.T.A. No.6002 & 6001/Mum/2017 - - - Dated:- 27-3-2019 - Shri Pawan Singh, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri. Mehul Shah For the Revenue : Shri. D.G. Pansari (DR) ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: These two appeals, filed by assessee, being ITA No. 6002 6001/Mum/2017 are for assessment year 2008-09. The appeal in ITA No. 6002/Mum/2017 is directed against appellate order dated 23.09.2011 in appeal no. CIT(A)-24/ACIT13(1)/167/10-11, passed by learned Commissioner of Income Tax (Appeals)-24, Mumbai (hereinafter called the CIT(A) ), for assessment year 2008-09, the appellate proceedings had arisen before learned CIT(A) from the assessment order dated 01.12.2010 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2008-09 . 1.1. The second appeal in ITA No. 6001/Mum/2017 is directed against appellate order dated 20th Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law, the Assessing Officer erred in disallowing courier charges of ₹ 98,307 without appreciating that the total courier charges paid were ₹ 87,493 under different bills, and the balance amount of ₹ 10,814 was paid towards service tax which did not attract provisions of TDS. 4. On the facts, and in circumstances of the case, and in law, the Assessing Officer erred in disallowing transport charges of ₹ 129,740. 5. On the facts, and in circumstances of the case, and in law, the Assessing Officer erred in disallowing hamali charges of ₹ 85,131 without appreciating that the concerned person on whose name the amount was debited was only the main person who collected Hamali for various labourers and distributed it, and there was as such no contract with him; and thus individual payments were less than ₹ 20,000 which in turn did not attract TDS provisions. 6. On the facts, and in circumstances of the case, and in law, the Assessing Officer erred in not appreciating that at the best default of non deduction was to the tune of ₹ 3,384, and if concerned parties had paid their taxes on their income, there was no justification in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S u/s 194C and added to business income of the assessee. The assessee claimed that it had a bonafide belief that courier charges are akin to postage hence deduction of income-tax at source was not required and under the circumstances disallowance was not warranted The AO relied on CBDT circular number 715 dated 08.08.1995 to reject contention of the assessee 3.5. Disallowance of Transport and Hamali Charges charges of ₹ 2,61,540/- on account of non-deduction of TDS.The assessee claimed Transport Hamali charges of ₹ 1,29,740/- paid to M/s Sunil Transport Services and ₹ 85,131/ paid to Mr. Pratap Shinde for loading the goods on container and unloading into warehouse which were disallowed u/s 40(a)(ia) due to non-deduction of TDS u/s 194C and added to business income of the assessee. The assessee claimed that there is no contractual agreement with the transport service provider and each payment is less than ₹ 20,000/- , no disallowance is warranted under these circumstances . The assessee relied on CBDT circular no 715 dated 08.08.1995. The AO held that these payments exceeded threshold limits and TDS u/s 194C is applicable. 4. The assessee being aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al against quantum assessment as it has a good case more so amendment made by Finance Act, 2012 were held to be clarificatory in nature and are applicable retrospectively from 01.04.2005. The assessee has also filed an affidavit from its Chartered Accountant Mr. Jagdish J. Mathani who explained that he was not aware of legal points/legal cases relatable to additions made by the Revenue when he appeared before learned CIT(A) and he took spontaneous decision of withdrawing appeal of the assessee against quantum assessment. It is pertinent to mention that for giving relief for non deduction of income-tax at source, the assessee is required to demonstrate that payee had included such income in return of income filed with Revenue and paid due taxes to Revenue for which it has to file a certificate from the payee certified by its accountant in accordance with Rule 31ACB of Income-tax Rules, 1962 in form no. 26A, as provided by Section 201 of the 1961 Act. The assessee has not filed any such evidences evidencing that payee has included such income in return of income filed with the Revenue and paid due taxes on such income to Revenue nor prescribed accountant certificate in Form No. 26A a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tribunal on 25.09.2017 i.e. as late as two years from the date of this judgment pronounced by Hon ble Delhi High Court. Hon ble Supreme Court is pleased to grant SLP against this judgment vide orders dated 05.08.2016 reported in (2016) 242 Taxman 5 (SC) . The assessee has not filed any evidence of payee including payment made by the assessee in its return of income filed with the Revenue as their income and having made the payment of due taxes to Revenue on such income. No certificate from accountant of the payee in Form No. 26A as stipulated by Rule 31ACB of the 1962 Rules has been filed. The assessee also relied upon decision of Hon ble Supreme Court in the case of CIT v. Calcutta Export Company to contend that amendment made to Section 40(a)(ia) by Finance Act 2010 is clarificatory and retrospective in nature. We are afraid that this contention of the assessee cannot be accepted because Hon ble Supreme Court in Calcutta Export Company was seized of interpreting first proviso to Section 40(a)(ia) of the 1961 Act which was amended by Finance Act, 2010 and Hon ble Supreme Court never decided the issue so far as second proviso to Section 40(a)(ia) of the 1961 Act is concerned which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urce as is contemplated u/s 194C of the 1961 Act on all these payment for expenses. The learned CIT(A) dismissed the quantum appeal of the assessee as the assessee has itself prayed before the learned CIT(A) for dismissal of its quantum appeal challenging disallowance of expenses under four heads for non deduction of income-tax at source by invocation of Section 40(a)(ia) of the 1961 Act for non deduction of TDS u/s 194C of the 1961 Act. The assessee did not file any appeal before tribunal against learned CIT(A) appellate order in quantum and matter was set to rest and attained finality. The assessee with a delay of 2119 days beyond limitation period as prescribed u/s 253(3) of the 1961 Act filed an appeal against quantum assessment before tribunal on 25.09.2017 i.e. almost six years later, which appeal has now stood dismissed by tribunal vide this common order , in ITA no. 6002/Mum/2017 for AY 2008-09. 8. The AO imposed penalty of ₹ 3,71,334/- being 200% of the tax sought to be evaded with respect to disallowance of expenses under the aforesaid four heads, vide penalty order dated 30.03.2013 bearing number DCIT 13(1)/271(1)(c)/PCJ/12-13, by holding as under: 3. I ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse and levy 200% of the penalty. The same will send the right signal to the professionals and assesses that the Audit report needs to be given proper importance. 6. Penalty on the above sum, being 200% of the tax sought to be evaded of ₹ 3,71,334/- (Rupees Three lakhs Seventy One Thousand Three Hundred Thirty Four only) is therefore imposed on the assessee under sec.271(1)(c) of the Act. Demand notice issued accordingly. 9. Aggrieved by the penalty levied by the AO u/s 271(1)(c) of the 1961 Act vide penalty order dated 30.03.2013 , the assessee filed first appeal with Ld. CIT(A) which appeal stood dismissed by Ld. CIT(A) vide appellate order dated 20.06.2017 bearing number CIT(A)-28/IT337/ACIT-17(2)/2013-14 , by holding as under:- 5. There cannot be any general proposition of law that penalty cannot be imposed for failure to deduct tax at source and consequent disallowance. I am aware of numerous judgments holding that in case of 40(a)(ia) addition, the penalty was deleted. But these cases turn on their own facts. The primary and key issue is bonafide belief that no TDS was required to be deducted. In case of M/s.Syndicate Labels v/s. ACIT in ITA No.43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(ia) of the 1961 Act are held to be declaratory in nature and were held to be applicable retrospectively from 01.04.2005. The assessee relied upon decision of Hon ble Delhi High Court in the case of Ansal Landmark Township Private Limited(supra) The assessee also relied upon Hon ble Bombay High Court decision in the case of Pr. CIT v. Perfect Circle India Private Limited in ITA no. 707 of 2016 , vide judgment dated 07.01.2019. Thus, prayer was made to delete penalty as levied by the AO u/s 271(1)(c) of the 1961 which stood confirmed by learned CIT(A). The assessee has also filed an affidavit of its Chartered Accountant Jagdish J Mithani, CA explaining under what circumstances the said learned CA conceded before learned CIT(A) as he was not aware of the legal points/legal cases and took spontaneous decision of praying for dismissal of its appeal. 10.2 The Ld. DR objected to the deletion of penalty as levied by the AO u/s 271(1)(c) of the 1961 Act which stood confirmed by learned CIT(A) and relied upon the appellate order passed by learned CIT(A). 11. We have considered rival contentions and perused the material on record . The assessee is engaged in the business as exporter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar number 715 dated 08.08.1995 to reject contention of the assessee 11.2.4. Disallowance of Transport and Hamali Charges charges of ₹ 2,61,540/- on account of non-deduction of TDS.The assessee claimed Transport Hamali charges of ₹ 1,29,740/- paid to M/s Sunil Transport Services and ₹ 85,131/ paid to Mr. Pratap Shinde for loading the goods on container and unloading into warehouse which were disallowed u/s 40(a)(ia) due to non-deduction of TDS u/s 194C and added to business income of the assessee. The assessee claimed that there is no contractual agreement with the transport service provider and each payment is less than ₹ 20,000/- , no disallowance is warranted under these circumstances . The assessee relied on CBDT circular no 715 dated 08.08.1995. The AO held that these payments exceeded threshold limits and TDS u/s 194C is applicable. 11.3 The assessee being aggrieved by assessment framed by the AO filed first appeal with learned CIT(A) against quantum assessment and filed letter dated 12.09.2011 wherein it was stated by the assessee before Ld. CIT(A) that the assessee did not wish to pursue its appeal with respect to aforesaid four disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also it is to be seen whether the contentions of the assessee are true. It is also claimed that rigors of Section 40(a)(ia) has been liberalised by insertion of second proviso to Section 40(a)(ia) of the 1961 Act by Finance Act, 2012 which is held to be retrospective from 01.04.2005. Reliance is placed on the decision of Hon ble Delhi High Court in the case of Ansal Landmark Township Private Limited and decision of Hon ble Jurisdictional High Court decision in the case of Perfect Circle India Private Limited. We are of the considered view keeping in view factual matrix of the case before us that the assessee deserve one more opportunity to explain its case . We are inclined to set aside and restore issues in this appeal to the file of the AO for fresh adjudication on merits in accordance with law . The evidences/explanations submitted by the assessee in its defence shall be admitted by the AO who shall adjudicate the same on merits in accordance with law. Needless to say proper and adequate opportunity of being heard shall be provided by the AO to the assessee in denovo proceedings in accordance with principles of natural justice in accordance with law . The appeal of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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