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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA
Before: DR. A.L.SAINI, AM & SHRI K. NARASIMHA CHARY, JM
O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned appeal and cross objection filed by the revenue and assessee respectively, pertaining to the assessment year 2010-2011, are directed against the order passed by ld. Commissioner of Income Tax (Appeals), Asansol in appeal No.230/CIT(A)/Asl./Cir-2/Asl/12-13, dated 27.11.2013, which in turn arise out of assessment order passed by the Assessing Officer (AO) Under Section 143(3) of the Income Tax Act 1961, (in short the ‘Act’), dated 16.01.2013.
Brief facts of the case qua the assessee are that the assessee filed return of income for assessment year 2010-11 electronically on 30.11.2010 declaring total income at Rs.21,22,657/-. The case was processed by the department u/s.143(3) of the Act and the AO has completed the assessment by making addition u/s.40(a)(ia).
Aggrieved from the order of AO, the assessee filed appeal before the ld. CIT(A), who has deleted the addition made by the AO by observing the followings :-
After considering all aspects including the fact that an application has been filed before I.T.O: (TDS) on 04.11.2013 for rectification, I hold that at the point of decision, the Assessing Officer has rightly effected disallowance. The appellant can seek alternate remedy as contained in Income Tax Act 1961, if any, as and when I.T.O. (TDS) effects any correction. This disposes the ground and point 5 of submission reproduced in paragraph 6 of this order.
Ground 3 is again against disallowance of Rs.61,78,541/- under section 40(a)(ia). This payment is to transporters and is made in period 01.10.2009 to 31.03.2010. The legal provision is stated in section 194C(6) as per which if PAN is provided by contractor in plying, hiring or leasing of goods carriage then tax is not to be deducted. 10. The Assessing Officer has stretched the matter. He is of the view that the appellant has not furnished the prescribed forms as specified in section 194C(7) and hence disallowed the same. 11. There are two aspects. After substitution of section 194C w.e.f. 01.04.2009, new form as required under section 194C(7) has not been prescribed yet. Secondly going by import of decision in I.T.O., Ward-2(3), Kolkata vs. M/s Link Consultants Pvt. Ltd. of ITAT 'A' Bench, Kolkata dated 29.11.2011, once the contractor furnishes PAN to the appellant, the liability to deduct tax causes to exist and hence on ground that tax not deducted a disallowance under section 40(a)(ia) cannot be made. 12. In view of findings in paragraph 11, I direct Assessing Officer to delete the addition of Rs.61,78,541/-. The ground is allowed.”
Not being satisfied with the order of CIT(A), the Revenue is in further appeal before us and has taken the following grounds of appeal :-
1. The Ld CIT (A) has failed to appreciate the fact that during the assessment proceedings, 15I/15J forms were sought as evidence of submission to the jurisdictional CIT but the assessee failed to provide the same. It is noteworthy to mention here that the assessee was asked to produce 151/15J forms which already were in existence, the AO never asked the assessee to produce the details of PAN of the transporter in the new form as pointed out by the Ld. CIT (A). The purpose of the section 194C(6) & 194C(7) is to very whether the PAN furnished by the contractors/subcontractors to the contractee is true or not. Therefore the type of the forms and whether it was in existence or not is not important here, the more
3 Atindra Nath Chaubey important is the information to be furnished to the jurisdictional CIT as required u/s 194C(7).The Ld. CIT (A) has cited as a case of ITO, W2(3); Kolkata vs M/s Link Consultants Pvt. Ltd of ITAT, A Bench, Kolkata dt. 29/11/2011 that once the contractor furnishes PAN to the contractee, the liability to deduct tax ceases to exist. In reference to that, it is pertinent to mention here that the contractors may furnish false PAN to the contractee unless & until it is verified by the CIT. Therefore, the essence of section 194C(6) & 194C(7) has been overlooked by the ld. CIT(A). 4.1. Ld. DR for the revenue has vehemently submitted that assessee did not make the compliance of Form No.15-I & Form No.15-J. Besides, CIT(A) has admitted the submissions of the assessee without giving an opportunity to the AO to examine the fact. Ld. DR has pointed out that the ld. CIT(A) did not follow the proper procedure to admit the additional explanation and submissions of the assessee. In addition to this, ld. DR for the revenue has primarily reiterated the stand taken by the AO which we have noted already in our earlier para and is not being repeated for the sake of brevity.
4.2. On the other hand, Ld. AR for the assessee has submitted that the assessee under consideration has done the proper compliance of Section 194C(6) and 194C(7) of the Act. The assessee did not furnish any additional evidence before ld.CIT(A). The assessee has given PAN Number and other documents and submitted explanation before the AO that there was a proper compliance on the part of the assessee so far as Section 194C sub section 6 and sub section 7 are concerned and Form No.15-I & 15-J are concerned. Ld. AR submitted that after substitution of Section 194C w.e.f. 1st April, 2009, new Form as required u/s.194C(7) has not been prescribed yet. Secondly going by import of decision in ITO
4 Atindra Nath Chaubey Ward-2(3), Kolkata Vs. M/s Link Consultants Pvt. Ltd., of ITAT ‘A’ Bench, Kolkata dated 29.11.2011, once the contractor furnishes PAN to the appellant, the liability to deduct tax cease to exist and hence, on ground that tax not deducted a disallowance under section 40(a)(ia) cannot be made. Considering the factual position cited above, we are of the view that there is no any point to disturb the order passed by the ld. CIT(A). Accordingly, we confirm the order passed by the ld. CIT(A). 4.3. In the result, appeal filed by the revenue is dismissed.
CO. NO.48/Kol/2016, filed by the assessee has not been pressed by the assessee therefore, the said Cross Objection (CO) does not require any adjudication. Hence, said cross objection filed by the assessee is dismissed. 5.1 In the result, the appeal filed by the Revenue and cross objection filed by the Assessee are dismissed. Order pronounced in the open court on this 05/12/2016.