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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & MS. KAVITHA RAJAGOPAL, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI
BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 1311/Mum/2023 (Assessment Year: 2011-12) Shantilal Juharmalji Jain ITO-Ward 19(3)(1) 171-B Panjrapole Lane, Mumbai Vs. Opp. Sarvodaya Nagar, Mumbai-400 004 PAN/GIR No. AAAPJ 9199 D (Appellant) : (Respondent)
Assessee by : Shri Rashmi Vyas : Ms. Indira Adakil Revenue by
: 06.07.2023 Date of Hearing Date of Pronouncement : 28.08.2023
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned
Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal
Centre (‘NFAC’ for short) u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to
the Assessment Year (‘A.Y.’ for short) 2011-12.
The assessee has challenged the ground that the assessee was not given adequate
opportunity before the first appellate authority, thereby violating the principles of natural
justice and had also challenged the disallowance of transport charges of Rs.2,70,048/- for
non deduction of TDS u/s. 194C of the Act.
The brief facts are that the assessee is engaged in the business of stainless steel
utensils, household products and appliances to buyers within and outside India as a
2 ITA No. 1311/Mum/2023 (A.Y.2011-12) Shantilal Juharmalji Jain vs. ITO proprietary concern by the name and style M/s. Surya Impex. The assessee had filed his
return of income dated 22.09.2010, declaring total income at Rs.11,24,290/- and the same
was processed u/s. 143(1) of the Act. The assessee’s case was selected for scrutiny and
the assessment order dated 28.03.2014 was passed u/s. 143(3) of the Act where the
Assessing Officer ('A.O.' for short) made various additions and determined the total
income at Rs.16,86,596/-.
The assessee was in appeal before the ld. CIT(A) who partly allowed the appeal
filed by the assessee and confirmed the addition/disallowance of transport charges of
Rs.2,70,048/- for non deduction of tax at source u/s. 194C of the Act.
The assessee is in appeal before us challenging the impugned order.
The learned Authorised Representative ('ld. AR' for short) for the assessee
contended that the assessee was given sufficient opportunity before the A.O. and further
the ld. AR stated that the assessee subsequently paid the TDS for the said amount. The ld.
AR further stated that as the assessee has already paid the TDS amount due, the same
should be allowed as deduction as claimed by the assessee. The ld. DR, on the other
hand, controverted the said facts and stated that the assessee has not satisfactorily
explained before the lower authorities as to why the TDS was not deducted and paid. The
ld. DR further stated that the assessee’s contention that the TDS is not deductible for
payments made where the deductee has furnished the PAN, is not acceptable contention.
The ld. DR relied on the orders of the lower authorities.
3 ITA No. 1311/Mum/2023 (A.Y.2011-12) Shantilal Juharmalji Jain vs. ITO 7. We have heard the rival submissions and perused the materials available on
record. It is observed that the assessee has debited Rs.2,70,048/- to the profit and loss
account towards transport charges to M/s. Sharma Transport Service and M/s. Delux
Roadlines Pvt. Ltd. for transportation of goods during the year under consideration. The
A.O. observed that the assessee has not deducted any TDS on the payments made to the
said companies and the assessee contended that as the PAN of the transport company has
been furnished, the assessee was on the belief that TDS was not to be deducted for the
payments and relied on the provision of section 194C(6) of the Act. The A.O. disregarded
the submission of the assessee for the reason that para 49.3 of the explanatory Circular
for Finance (No.2) Act, 2009 has amended to exempt payment to transport operators
from deducting TDS but subject to the condition that the deductors will be required to
furnish the PAN details of the operators to the department in the prescribed format as per
the conditions laid down u/s. 194C(7) of the Act. The A.O. further held that the assessee
has failed to furnish the relevant details in the prescribed form to the concerned authority,
thereby failing to comply with the provisions of section 194C(7) of the Act. The A.O.
further held that non compliance of the provisions of sections 194(6) and 194(7) of the
Act would attract the provision of section 194C(1). The A.O. invoked the provision of
section 40(a)(ia) of the Act and disallowed the impugned amount made to the transport
agencies. The ld. CIT(A) upheld the addition made by the A.O. It is observed that the
aggregate amount of Rs.2,70,048/- paid as transportation charges to three parties namely
M/s. Sharma Transport Service (Rs.2,42,164), Gawad Transport (Rs.6,000/-) and Delux
Roadline Pvt. Ltd. (Rs.21,884/-) for which the assessee claims that since payment to two
parties is less than Rs.30,000/-, the assessee is not entitled to deduct TDS as per the
4 ITA No. 1311/Mum/2023 (A.Y.2011-12) Shantilal Juharmalji Jain vs. ITO provision of section 194C of the Act and with regard to Rs.2,42,164/- to M/s. Sharma
Transport Service, the assessee contended that it had furnished details of PAN to the
Income Tax Department by filing revised TDS return in Form 26Q along with the PAN
copy of M/s. Sharma Transport Service. The assessee contends that the delay was due to
a bonafide reason as the assessee was not aware of the new requirement of the said
provision. The assessee further contended that by oversight, the amended provision was
not looked into.
From the above observation, we are of the considered view that the assessee has
already deducted and paid the said TDS amount and the revised return filed by the
assessee was not considered by the lower authorities. We, therefore, direct the A.O. to
allow the claim of the assessee after due verification of the facts of the payment made by
the assessee. Ground No. 2 raised by the assessee is allowed. As we have decided the
issue on the merits of the case, Ground no. 1 raised by the assessee requires no further
adjudication and ground no. 3 is general in nature.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 28.08.2023
Sd/- Sd/-
(Om Prakash Kant) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 28.08.2023 Roshani, Sr. PS
5 ITA No. 1311/Mum/2023 (A.Y.2011-12) Shantilal Juharmalji Jain vs. ITO
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai