ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE -2(1), NAGPUR vs. SHRI MAHESH GUPTA , NAGPUR

These cases were heard together. Since facts common, issues are similar, these cases are being disposed of vide this consolidated order. In all these cases, the Revenue has not pressed the Tax Effect Issue. Therefore, all these cases are heard and adjudicated on merits.

The brief facts in this case are that the assessee is engaged in the business of manufacturing cement pipes and also undertakes works allotted by PWD and other government department on contract basis. Return of income was filed on 30.09.2009 declaring net taxable income at Rs.29,75,293/-. The assessment u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was completed on 30.12.2011 determining total income of Rs.42,04,455/-. The addition of Rs.12,29,162/- on account of disallowance u/s.40(a)(ia) of the Act was made in the assessment with a finding that assessee has paid total of Rs.12,29,162/- for site development expenses to various parties where assessee should have made TDS u/s.194C of the Act but had failed to do.

Thereafter, the assessee preferred appeal against the assessment order before the Ld. CIT(Appeals), Nagpur. The said appeal was withdrawn later. The Ld. CIT(Appeals) therefore passed order on 06.08.2015 dismissing the appeal. The assessee further preferred appeal against such order of the Ld.

Meanwhile, notice u/s.263(1) of the Act was issued by the Ld. CIT-IV, Nagpur on 19.02.2014 stating the order passed by the ACIT, Circle-1, Nagpur u/s.143(3) of the Act was prima facie erroneous and prejudicial to the interest of the revenue. The Ld. CIT-IV, Nagpur passed order u/s.263 on 10.03.2014 stating that since the Assessing Officer has not disallowed the said expenses i.e. bay way of payments to sub-contracts and since TDS was not deducted u/s.40(a)(ia) of the Act, assessment was held to be erroneous and prejudicial to the interest of the revenue. That consequence to this, order passed u/s.263 of the Act, the Assessing Officer passed assessment order u/s.143(3) r.w.s.263 on 12.03.2015 and made disallowance for the said sum of Rs.66,64,466/- by rejecting the contention of the assessee.

That when the matter travelled before the Ld. CIT(Appeals), as per reasoning given in his order which is on record, the Ld. CIT(Appeals) restricted the disallowance @ 30% of the total sub-contracts expenses of Rs.66,64,466/- i.e. at Rs.19,99,339/- whereby the assessee got partial relief.

At the time of hearing before us through e-Court, the Ld. AR of the assessee invited our attention to the order of Tribunal in ITA No.187/Nag/2017 in assessee’s own case for assessment year 2009-10

The Ld. DR fairly conceded to these statements of facts.

We have perused the case records and heard the rival contentions. We find that in the assessment order which was framed u/s.143(3) r.w.s.263 of the Act, addition of Rs.66,64,466/- was made by the Assessing Officer and the Ld. CIT(Appeals) restricted the disallowance @ 30% of the said amount i.e. Rs.19,99,339/-. Now, we also find the Tribunal in ITA No.187/NAG/2017 (supra.) has quashed the 263 order itself and therefore, the assessment framed on the basis of 263 order of the Ld. Commissioner looses its very basis and therefore cannot sustain legally. Meaning thereby, any addition consequent thereof in such assessment also gets deleted. We order accordingly.

In the result, appeal of the Revenue in ITA No.96/NAG/2018 is dismissed.

In all these appeals filed by the Revenue are against the deletion of penalty imposed u/s.271F of the Act. Section 271F spells out that “ if a person who is required to furnish a return of his income, as required under sub section (1) of Section 139 or by the proviso to that sub section, fails to furnish

The Revenue is therefore aggrieved and has preferred these appeals before us.

We have perused the case records and heard the rival contentions. We have also given considerable thought to the findings arrived at by the Ld. CIT(Appeals) in all these cases. That facts clearly demonstrates the delay in filing return was absolutely unintentional and due to circumstantial factors. The assessee has all throughout acted bona-fide. The reasonable cause has been well examined by the First Appellate Authority in the order passed under Section 271F r.w.s 273B of the Act. Accordingly, we do not find any infirmity with the findings given in the respective orders of the Ld. CIT(Appeals) and relief provided therein to the assessee is hereby sustained.

In the result, appeals of the Revenue in ITA Nos.224 to 226/NAG/2018 are dismissed.

In the combined result, all the appeals of the Revenue are dismissed.