SRI C M MALLAD,BIJAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, BELGAUM

Per A.K. Garodia, Accountant Member

3. In the course of hearing, learned AR of the assessee submitted a copy of the Tribunal order rendered in a similar case of a relative i.e, in the case of Shri. Tirumalarao P. Mokashi Vs. ACIT in dated 29.11.2019 and submitted that in this case also, there was a delay of 1872 days in filing the appeal and in that case also, the disallowance was made by AO under section 40a(ia) of the IT Act, 1961 in the order passed by the AO under section 143(3) r.w.s. 263 of IT Act, 1961 as in the present case. He submitted that under similar facts, the Tribunal in that case condoned the delay and restored the matter back to the file of the AO to decide the issue afresh as per directions given in para 7 of that Tribunal order. He pointed out that paras 5, 6 and 7 are relevant in the present case also and the delay should be condoned and the matter should be restored back to the file of AO for a fresh decision with similar directions. Learned DR of the Revenue supported the order of CIT(A).

4. We have considered the rival submissions. We find that no difference in facts could be pointed out by learned DR of the Revenue in the present case and in the case cited by learned AR of the assessee. We find that in that case also, the appeal was filed before Tribunal after a delay of 1872 days and in that case also, the disallowance was made by AO under section 40a(ia) of the IT Act, 1961 in the order passed by him under section 143(3) r.w.s. 263 of the IT Act, 1961. Hence, in our considered opinion, this Tribunal order is squarely applicable in the present case. We reproduce paras 5 to 7 of this Tribunal order for ready reference. It reads as under:

“5. We heard the rival contentions and perused the material placed on record. We are of the considered view that in the facts and circumstances of the case it is a fit case for condoning the delay, since, the Hon’ble Jurisdictional High Court held that the disallowance u/s. 40(a)(ia) of the Act not was examined by the AO with regard to its retrospective nature. Therefore, in the interest of justice, we condone the delay and admit the appeal.

6. We heard the rival submissions and perused the material placed on record. In the instance case, the Id. AR submitted that the issue involved in this case is the disallowance u/s. 40(a)(ia) of the Act. The assessee made the payment of Rs. 2,73,06,000/- towards sub-contract payments without deduction of tax at source as required u/s. 194C of the Act, which attracts the disallowance u/s. 40(a)(ia) of the Act. The assessee submitted before the AO that recipients have admitted the income in their hands and paid the taxes thereon, thus contended that as per second proviso to s. 40(a)(ia) of the Act inserted by Finance Act, 2012, no addition is warranted. According to the Id. AR, the amendment made to second proviso to section 40(a)(ia) of the Act is held to be declaratory, curative and has retrospective effect from 1st April, 2005 by various Hon'ble High Courts including the Hon'ble Jurisdictional High Court in the assessee's own case. The issue in the impugned appeal is also identical. The Hon'ble Jurisdictional High Court in assessee's appeal No.200001/2016 dated 23/09/2019 directed the ITAT to pass the appropriate orders in pending appeal. In the instant case, the AO did not accept the contention of the assessee that the amendment was retrospective. The Hon'ble High Court in its order stated to be held that amendment has retrospective effect. For the sake of clarity and convenience, we extract paral No.3 & 4 of the order of the Hon'ble Jurisdictional High Court in the order cited, supra, dated 23.08.2019, which reads as under: "3. Appeal No.724/Bng/2016 filed by the assessee is pending before the ITAT against the order giving effect to, the order passed under section 263 of the Act by the Commissioner of Income Tax.

Pronounced in the open court on the date mentioned on the caption page.