THE DCIT, CIRCLE-2(1)(2), BARODA vs. M/S. MAHENDRA PATEL BUILDERS PVT. LTD., BARODA

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ITA 190/AHD/2015Status: DisposedITAT Ahmedabad16 October 2017AY 2008-094 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that the retrospective amendment to Section 40(a)(ia) applies if TDS is deposited before the due date of filing the return. The belated deposit was considered acceptable.

What were the facts?

The Assessing Officer disallowed Rs. 30,03,764/- under Section 40(a)(ia) for belatedly deposited TDS. The CIT(A) deleted this disallowance, holding that the amendment to Section 40(a)(ia) is retrospective and the deposit was made before the due date of filing the return.

What were the issues?

Whether the retrospective amendment to Section 40(a)(ia) allows deduction if TDS is deposited belatedly but before the due date of filing the return.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Respondent: Shri Aditi Sheth, AR
Hearing: 13/10/2017

आदेश / O R D E R

PER PRADIP KUMAR KEDIA - AM: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax(Appeals)-III, Baroda [CIT(A) in short] dated 11/11/2014 in the matter of assessment order passed under s.143(3) r.w.s.147 of the Income Tax Act, 1961

ITA No.190/Ahd/2015 DCIT vs. Mahendra Patel Builders Pvt.Ltd. Asst.Year – 2008-09 - 2 - (hereinafter referred to as "the Act") dated 15/11/2013 relevant to Assessment Year (AY) 2008-09.

2.

The assessee in its grounds of appeal have impugned action of the CIT(A) in deleting the disallowance of Rs.30,03,764/- made by the Assessing Officer (AO) by resorting section 40(a)(ia) of the Act even though the assessee has failed to deposit the tax deducted at source (TDS) within stipulated time prescribed under the Act, whereby the provisions of section 40(a)(ia) are attracted. The AO noted that the total amount of such payment on which TDS has been deposited belatedly works out to Rs.30,03,764/-. The AO accordingly added the same to the total income of the assessee.

3.

In the first appeal, the CIT(A) re-examined the aforesaid issue and found that the benefit of amendment under s.40(a)(ia) requires to be given to the assessee where the assessee has deposited the tax so deducted before the due date of filing of return. The relevant paras with the order of the CIT(A) read as under:-

“4.2. During the course of current appellate proceedings, the appellant’s AR argued the case and made written submissions. Part of the written submission was against the reopening of the assessment. But, on verification of Form No.35 filed by the appellant, it shows that the appellant has not taken any ground

ITA No.190/Ahd/2015 DCIT vs. Mahendra Patel Builders Pvt.Ltd. Asst.Year – 2008-09 - 3 - against reopening of the assessment. Hence, this issue is not adjudicated.

4.2.1. So far as the disallowance u/s.40(a)(ia) of the IT Act, 1961 is concerned, the Hon’ble Gujarat High Court in its decision in the case of Standard Buildcon 41 Taxman.com 155 (Guj.) has held that the amendment u/s.40(a)(ia) of the IT Act b brought out by the Finance Act, 2010 w.e.f.01.04.2010 is having retrospective effect and, therefore, if the tax deducted is deposited by the assessee before the due date of filing the return, the same is required to be given credit in every assessment year. In this case, from the details reproduced by the AO in her assessment order, it is seen that the entire TDS has been deposited latest by 31.05.2008. Hence, following the decision of jurisdictional high court, the disallowance made by the AO of Rs.30,03,764/- u/s.40(a)(ia) of the IT Act is directed to be deleted.”

4.

With the assistance of the Learned Representatives of the Assessee and Revenue, we find that there is no dispute on the fact that TDS has been deducted on payments made to various parties have been ultimately deposited before the due date of filing of return of income albeit belatedly in some cases. This being so, the case of the assessee is squarely covered by the decision of the Hon’ble Gujarat High Court in Standard Buildcon 41 Taxamn.com 155 (Guj.) relied upon by the CIT(A). Thus, we do not find any infirmity in the order of the CIT(A).

ITA No.190/Ahd/2015 DCIT vs. Mahendra Patel Builders Pvt.Ltd. Asst.Year – 2008-09 - 4 - 5. In the result, appeal of the Revenue is dismissed. This Order pronounced in Open Court on 16 / 10 /2017

Sd/- Sd/- (महावीर �साद) (�द�प कुमार के�डया) �या�यक सद�य लेखा सद�य ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad; Dated 16/ 10 /2017

ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-III, Baroda �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation .. 13.10.17 (dictation-pad pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member … 13.10.17 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S…….16.10.17 7. Date on which the file goes to the Bench Clerk…………………16.10.17 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………

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