Income Tax Appellate Tribunal - Ahmedabad
Farmsons Fibers, Surat vs Assessee on 2 November, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD
"D" BENCH
Before: Shri D.K. Tyagi, Judicial Member and
Shri A. Mohan Alankamony, Accountant Member
M.A. No.90/Ahd/2011
(Arising out of ITA No.1759/Ahd/2009 & C.O. No.124/Ahd./2009
A.Y.2006-07
The I.T.O., M/s Farmsons Fibers
Ward-9(1), U-4, Bombay Market
Surat (Corporation Building)
Vs. Umarwad a, Surat
Appellant Respondent
Department by : Shri Y.P. Verma, Sr. D.R.
Assessee by : Shri Rajesh Upadhyay, A.R.
Date of hearing : 02.11.2012
Date of pronouncement : 23.11.2012
आदे श/ORDER
PER : D.K. TYAGI, JUDICIAL MEMBER
Through this miscellaneous application the assessee wants us to rectify our order dated 09.10.2009.
2. Assessee's contention in this miscellaneous application is that assessee has paid job work payment of Rs.3,77,874/- to M/s Varun Industries in respect of manufacturing of grey cloth during the month of January-February 2006. On these payments TDS was deducted and also paid on 30.05.2006 as against due date for such payment i.e. 07.02.2006 and 07.03.2006. Hon'ble I.T.A.T. vide para 15 of its order has dismissed the grounds of assessee's cross-objection by observing as under:-
"In view of the above, we find in the present case also there is delay in payment of TDS on job-work expenses relating to January & M.A. No.90/Ahd/2011 2 (Arising out of ITA No.1759/Ahd/2009 A.Y.2006-07 February-2006, the due date for payment was 07/02/2006 and 07/03/2006, whereas the actual payment of the entire TDS amounting to Rs.3,77,874/- was made only on 30/05/2006. In view of these facts, the assessee is not eligible for deduction in the relevant assessment year. Accordingly, this issue of the assessee's cross objection is dismissed."
In view of the amendment made u/s 40(a)(ia) from 01.04.2010 that tax deducted if not paid during statutory due date but if paid before filing return of income u/s 139(1) no such disallowance can be made. For making this submission assessee relied on the latest decision of Hon'ble Jurisdictional High Court dated 18.07.2011 in Tax Appeal No.706 of 2010 in the case of CIT vs. J.K. Construction Co. Ltd. It was further argued that it is a settled position of law that subsequent decision of Apex Court or Jurisdictional High Court is binding on the Tribunal and therefore, constitute an error or apparent mistake which was to be rectified to have consistency with higher authority's subsequent decision. Therefore, the order dated 09.10.2009 may kindly be accordingly rectified by allowing the ground taken by the assessee in its C.O. as tax deducted was admittedly paid before the due date of filing of return. Ld. D.R., however, submitted that there is no mistake apparent on record and therefore, there is no need to rectify the order dated 09.10.2009 and the M.A. filed by the assessee may kindly be dismissed.
3. After hearing both the parties and perusing the record we find that there is no dispute about the fact that TDS on job work expenses relating to January-February, 2006 amounting to Rs.3,77,874/- was paid on 30.05.2006 i.e. before due date of filing of return. On similar fact Hon'ble jurisdictional High Court in the decision dated 18.07.2011 in Tax Appeal No.706 of 2010 in the case of CIT vs. J.K. Construction Co. Ltd. has held as under:- M.A. No.90/Ahd/2011 3
(Arising out of ITA No.1759/Ahd/2009 A.Y.2006-07 "From the record, it emerges that for payment to contractor, the assessee had made deduction as required under law from time to time and in particular latest by 31.3.2005. All such amounts were deposited with the Government on or around 28.5.2005. In background of above undisputed facts, tribunal was of the opinion that by virtue of amended provisions of Section 40(a)(ia) of the Income Tax Act, 1961, assessee has not breached the requirement of deduction and depositing of TDS.
Section 40(a)(ia) of the Act as amended with effect from 1.4.2005 read as under:-
(ia) any interest, commission, or brokerage, (rent, royalty) fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.
Plainly speaking, assessee had to make deduction before 31st March of the year in question and as long as such amounts were deposited before last date of filing of the return, requirements of law would be fulfilled. It was on this basis that tribunal was of the opinion that the assessee committed no wrong and was therefore, entitled to seek deduction of contractors and had also deposited with Revenue before the last date of filing of the return. We do not find any illegality in order of tribunal. Tax appeal is therefore, dismissed."
4. Since now law is settled that subsequent decision of the Apex Court or of jurisdictional High Court is binding on the Tribunal and therefore constitute a mistake apparent on record and since in this case same mistake from record has crept in, in our order dated 09.10.2009, in view of above decision of Hon'ble jurisdictional High Court, we are inclined to accept the contention of ld. counsel of the assessee and modify para 15 of our order dated 09.10.2009 by holding that since tax deducted at source amounting to Rs.3,77,874/- has been paid by the assessee before due date of filing of return, no disallowance can be made in assessee's case by invoking the provisions of Section M.A. No.90/Ahd/2011 4 (Arising out of ITA No.1759/Ahd/2009 A.Y.2006-07 40(a)(ia) of the Act. Accordingly, this issue of the assessee in Cross- Objection is allowed and paragraph 16 of that order dated 09.10.2009 now be read as under:-
"In the result, the appeal of the Revenue is dismissed while the Cross- Objection of the assessee is allowed."
5. In the result, this miscellaneous appeal is allowed.
Order pronounced in open Court on 23.11.2012
Sd/- Sd/-
(A.Mohan Alankamony) (D.K. Tyagi)
Accountant Member Judicial Member
True copy
N.K. Chaudhary, Sr. P.S.
Copy of the Order forwarded to:
1. The applicant
2. The Respondent
3. The CIT Concerned
4. The Ld. CIT (Appeals)
5. The DR, Ahmedabad
6. The Guard File
By order
AR,ITAT,Ahmedabad