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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI G. MANJUNATHA
आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-Puducherry in ITA No.21/CIT(A)-PDY/2015-16 dated 28.08.2018. The assessment was framed by the DCIT, Villupuram Circle, Villupuram for the assessment year 2009-10 u/s.143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 20.03.2015.
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The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of lorry hire charges amounting to Rs.1,72,40,735/-, paid without deduction of tax in violation of provisions of section 40(a)(ia) of the Act, made by the assessee. The Revenue has also raised the issue of violation of Rule46A of the Income Tax Rules, 1962 (hereinafter the ‘Rules).
Brief facts are that the AO during the course of assessment proceedings noticed from income and expenditure account of the transport division that the assessee has debited a sum of Rs.1,90,25,860/- towards lorry hire charges. He noted that the above payments were in the nature of contract and made without deduction of TDS u/s.194C of the Act, thereby violated the provisions of section 40(a)(ia) of the Act. The assessee replied to the AO vide letter dated 20.03.2015 that he has obtained Form No.15I from the transport contractors and the same are filed with the CIT, Puducherry. The AO asked the assessee to produce Form No.15I & 15J in support of his claim but according to AO, the assessee did not file the party-wise details as well as the above stated forms. Accordingly, he disallowed the above expenditure amounting to Rs.1,90,25,860/-. Aggrieved assessee preferred appeal before CIT(A). The CIT(A) restricted the disallowance at
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Rs.17,85,125/- and deleted the balance disallowance of Rs.1,72,40,735/-. Aggrieved, Revenue came in appeal before the Tribunal.
We have heard rival contentions and gone through facts and circumstances of the case. We have noted that the assessee has received total transportation receipts i.e., gross receipts at Rs.2,13,35,998/- during the year under consideration. There is no dispute that the registers and receipt books in respect of transactions are available, all payments were made by Ramco Cements Ltd., by cheque. The assessee has claimed that it has used 602 vehicles and the same is confirmed by the company Ramco Cements Ltd., for transportation of cement. Strangely, the AO noted that only 3 lorries were used in the entire year. The assessee submitted Form No.15J from 75 parties and it was also claimed that the same was submitted before CIT during revision proceedings carried out by him u/s.263 of the Act. The CIT(A) has examined the entire list of lorries viz-a-viz the list submitted by Ramco Cements Ltd., Ramco Cements Singapuram Unit and Ramco Cements Alathiur Unit. From the documents and records, it is noticed that the assessee has submitted copies of Form No.15J before the AO, before CIT(A) and even before CIT during revision proceedings in
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respect of 75 vehicles. This fact is noted by CIT(A) in para No.5.6.4 to 5.6.6. Therefore, the allegation of Revenue regarding violation of Rule 46A of the Rules does not stand and hence, rejected. The relevant para No.5.6.4 to 5.6.6 of CIT(A) order reads as under:-
5.6.4 As seen in the submission, copy of the Form l5-J was filed before the Assessing Officer during the assessment pursuant to the Order u/ s 263 by the Commissioner of Income-Tax. The copy of Form 15-J filed by the AR before the Assessing Officer is available in the assessment records. But the Assessing Officer stated in the Remand Report that the copy of Form 15-J was not submitted. It is stated by the assessee that he had submitted the copy of Form 15-J to the Commissioner of Income-Tax during the proceedings u/s 263 of the Income-Tax Act on 11-02-2014 wherein this fact is mentioned by AR in page 3 of the letter to Commissioner of I n come-Tax. In the Order u/s263, passed by the Commissioner or Income-Tax, the inference to the above letter dated 11- 02-2014 is mentioned. Thus, the Assessing Officer is in the knowledge of the submission of copy of Form 15-J to the Commissioner of Income-Tax as well. The assessee furnished the copy of Form 15-I during remand proceedings as well to the Assessing Officer. The copy is available in the assessment records. Therefore, the assessee has filed the copy of Form 15-I to the Assessing Officer twice, once during the assessment and once during the remand proceedings apart from submitting a copy to the Commissioner of Income-Tax as well. But the Assessing Officer has written in page 2 of the Remand Report that copy of Form 15-I is filed in respect of 75 vehicles and, later, in page 4, he writes that “the assessee claimed that Form 15-J for 75 parties was submitted. However, no proof or evidence to substantiate the claim was forthcoming from the assessee. The assessee merely claims that the Form 15-I was submitted to the Commissioner of Income-Tax, Puducherry on 11-02-2014”.
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5.6.5 It is clear from the records that the copy of Form 15-I was furnished to the Assessing Officer twice in respect of 75 vehicles for which Form 15-J was required to be submitted. For other vehicles, being less than Rs. 50,000/-, no TDS to be done and Form 15-J is not required. Even if the Form 15-J was delayed to be submitted before the Commissioner of Income-Tax, as per procedure after obtaining the Form 15-1 from the lorry owners, the fact that the copy of Form l5-J was filed to the Assessing Officer, should have been considered and noted in the demand Report.
5.6.6 Though the copy of Form 15-J was submitted by be assessee twice before the Assessing Officer during the assessment pursuant to the Order u/s 263 and during the remand proceedings (copies are available in the assessment records) and once before the Commissioner of Income-Tax during the proceedings u/s 263 (as mentioned in the covering letter of the assessee to the Commissioner of Income-Tax in the Order u/s 263), the Assessing Officer has not taken this on record in the assessment and in the Remand Report. Though the Assessing Officer’s position is not factually correct, even at the appellate stage credit can be given for Form 15-J as held by the ITAT, Hyderabad in the case of Associated Roadways P. Ltd v/s CIT (2013) 25 ITR (Tribnl.) 713 ITAT Hyderabad.”
This payment is to the extent of Rs.59,91,268/- and Rs.22,85,142/- totaling to Rs.82,76,410/- and once Form No.15I & 15J is filed by the assessee and which is not controverted even before us by the ld. Senior DR, we feel that this amount requires complete deletion and CIT(A) has rightly deleted the same. We confirm the order of CIT(A).
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4.1 As regards to the payment of Rs.97,41,942/- since the payment relates to lorry owners which is less than Rs.50,000/- and as per the first proviso to section 194C(3) of the Act, as it stood to the relevant assessment year, the assessee need not deduct TDS and therefore provision of section 40(a)(ia) of the Act will not apply. The CIT(A) has rightly deleted the addition and we confirm the same.
4.2 As regards to the payment of Rs.9,47,224/- and Rs.60,285/- made to two individuals and also to others, which are not covered either by the proviso to section 194C(3) of the Act or no Form No.15J is submitted, we feel that the CIT(A) has rightly confirmed the addition. We also noticed that the assessee has used his own lorries for the purpose of transportation and the payment of Rs.7,15,716/- and Rs.60,285/- pertains to lorries owned by the assessee for which no hire charges can be paid. Therefore, the CIT(A) has rightly disallowed the same at Rs.7,77,616/-. In term of the above, we are of the view that the CIT(A) has rightly restricted the disallowance at Rs.17,85,125/-, the payment made without deduction of TDS by invoking provisions of section 40(a)(ia) of the Act and has rightly deleted the balance addition of Rs.1,72,40,735/-
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Hence, we find no infirmity in the order of CIT(A) and the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the court on 15th February, 2022 at Chennai.
Sd/- Sd/- (महावीर �सह ) (जी. मंजुनाथ) (MAHAVIR SINGH) (G. MANJUNATHA) उपा�य� /VICE PRESIDENT लेखा सद�य /ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 15th February, 2022 RSR आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु� /CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF.