Income Tax Appellate Tribunal - Kolkata
Shree Shyam Coal Co. Ltd., Kolkata vs Assessee on 2 May, 2012
आयकर अपीलीय अधीकरण, Ûयायपीठ - "सी ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "C", KOLKATA
[(सम¢) ौी सी.
सी.डȣ.
डȣ.राव,
राव, लेखा सदःय, एवं ौी जाज[ माथन Ûयायीक सदःय]]
[Before Hon'ble Sri C.D.Rao, AM & Hon'ble Sri George Mathan, JM]
आयकर अपील संÉया /ITA No.468/Kol/2011
िनधॉरण वषॅ/Assessment Year : 2007-08
(अपीलाथȸ/APPELLANT ) -वनाम- (ू×यथȸ/RESPONDENT)
M/s.Shree Shyam Coal Co.. Ltd. A.C.I.T., Circle-5,
Kolkata -versus- Kolkata
(PAN:AAECS 3745 H)
अपीलाथȸ कȧ ओर से/ For the Appellant: Shri Subash Agarwal
ू×यथȸ कȧ ओर से/For the Respondent: Shri A.K.Mahapatra
सुनवाई कȧ तारȣख/Date of Hearing : 02.05.2012.
घोषणा कȧ तारȣख/Date of Pronouncement : 04.05.2012.
आदे श/ORDER
(सी.
सी.डȣ.
डȣ.राव)
राव), लेखा सदःय
Per Shri C.D.Rao, AM
This is an appeal filed by the assessee against order dated 13.01.2011 of CIT(A) -VI, Kolkata pertaining to A.Yr. 2007-08.
2. The assessee has raised the following grounds of appeal :-
"1.The Hon'ble CIT(Appeals) was wrong and unjustified in confirming the addition of Rs.1,48,77,291/- towards delay payment of TDS u/s 40(a)(ia) of the I.T.Act, 1961.
2. The Hon'ble CIT(A) was wrong and unjustified in confirming the addition of Rs.72,089/- towards delay payment of Employee's Contribution u/s 2(24)(x) read with sec.36(1)(va) of the I.T.Act, 1961."
3. At the time of hearing before us both the parties have conceded that both the issues are covered by Hon'ble Jurisdictional High Court in the case of CIT vs Virgin Creations in ITAT No.302 of 2011, GA No.3200/2011 dated 23.11.2011 in respect of addition made towards delay payment of TDS u/s 40(a)(ia) of the IT Act and in the case of CIT vs M/s. Vijay Shree Limited vide ITAT No.245 of 2011 in GA No.2607 2 of 201 dated 7th September, 2011 in respect of employees contribution u/s 2(24)(x) r.w.36(1)(va).
4. After hearing the rival submissions and on careful perusal of materials available on record, it is observed that the issue of TDS u/s 40(a)(ia) of the IT Act raised by the assessee is covered by earlier order of this Tribunal in the case of M/s. Designer Exports vs DCIT vide ITA No.1532/Kol/2010 dated 20.04.2012. The relevant findings of order of this Tribunal in para 4,5 and 6 are as under :-
"4. We find that the facts are not in dispute and this issue is now squarely covered in favour of the assessee and against revenue by the decision of Hon'ble Calcutta High Court in the case of CIT Vs. Virgin Creations in ITAT No.302 of 2011, GA No.3200/2011 dated 23.11.2011, wherein Hon'ble High Court has confirmed coordinate bench decision of ITAT in ITA No.267/K/2009 "A" Bench, in the case of Virgin Creations Vs. ITO dated 15.12.2010. Tribunal has considered the decisions of Mumbai Bench of this ITAT in the case of M/s. Bansal Parivahan (India) P. Ltd. Vs. ITO in ITA No.2355/Mum/10 and of Ahmedabad Bench "B" in ITA No. 3983/Ahd/2008 for AY 2005-06 dated 03.12.2010. Tribunal considered the amendment made in the provisions of section 40(a)(ia) of the Act by the Finance Act, 2010 as curative and remedial in nature by holding as under:
"After hearing the rival submissions and on careful perusal of the materials available on record, keeping in view of the fact that though the Ld. D.R. submitted that the decisions of the Coordinate Benches are not binding and the Kolkata benches may take a different view, since Mumbai Bench after analyzing the provisions of section 40(a)(ia) since its inception and various amendments made to the same including the suggestion made by the Industry in the form of representation in their pre-budget memorandum to the Hon'ble Finance Minister and by applying the decision of the Hon'ble Apex Court in the case of Alom Extrusions Ltd., has observed that "The provisions of section 40(a)(ia) as stood prior to the amendments made by the Finance Act 2010 thus were resulting into unintended consequences and causing grave and genuine hardships to the assessees who had substantially complied with the relevant TDS provisions by deducting the tax at source and by paying the same to the credit of the Government before the due date of filing of their returns u/s 139(1). In order to remedy this position and to remove the hardships which was being caused to the assessees belonging to such category, amendments have been made in the provisions of section 40(a)(ia) by the Finance Act 2010. The said amendments, in our opinion, thus are clearly remedial/curative in nature as held by Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd. (supra) and Mom Extrusions Ltd. (supra) and the same therefore would apply retrospectively w.e.f. 1st April, 2005. In the case of R.B. Jodha Mal Kuthiala 82 ITR 570, it was held by the Hon'ble Supreme Court that a proviso which is inserted to remedy unintended consequences and to make the provision workable, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. In the present case, the amount of tax deducted at source from the freight charges during the period 01/04/2005 to 28/02/2006 was paid by the assessee in the months of July and August 2006 i.e. well before the due date of filing of its return of income for the year under consideration. This being the undisputed position, we hold that the disallowance made by the A.O. and confirmed by the learned CIT(A) on account of freight charges by invoking 3 the provisions of section 40(a)(ia) is not sustainable as per the amendments made in the said provisions by the Finance Act, 2010 which, being remedial/curative in nature, have retrospective application", we find no reason to deviate from the decisions of the ITAT's Mumbai Bench and Ahmedabad Bench, in the absence of a contrary view, except the other benches decision or any other High Court. Therefore, respectfully following the decision of the Coordinate Benches (supra), we allow the ground nos. 1 to 3 of the assessee's appeal."
5. We find that the above view of this Tribunal was confirmed by Hon'ble Calcutta High Court in the case of Virgin Creations (supra) by holding as under:
"We have heard Mr. Nizamuddin and gone through the impugned judgment and order. We have also examined the point formulated for which the present appeal is sought to be admitted.
It is argued by Mr. Nizamuddin that this court needs to take decision as to whether section 40(A) (ia) is having retrospective operation or not. The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2005 and April 28, 2006 and the same were paid by the assessee in July and August 2006, i.e. well before the due date of filing of the return of income for the year under consideration. This factual position was undisputed. Moreover, the Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Pvt. Ltd. and also in the case of Alom Extrusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well.
In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs."
6. Once the issue is decided by Hon'ble jurisdictional High Court that the amendment in the provisions of section 40(a)(ia) of the Act by Finance Act, 2010 is remedial and curative in nature and TDS paid on or before the due date of filing of return u/s. 139(1) of the Act, deduction in respect to the amount on which TDS is so paid, is allowable. In the present case the assessee deducted tax in February, 2007 but the same was deposited in May, 2007 for the AY 2007-08 that means the TDS was paid before due date of filing of return u/s. 139(1) of the Act by the assessee, hence, we allow the claim of assessee. This issue of assessee's appeal is allowed."
4.1. Similarly in respect of addition made towards delay payment of Employee's contribution u/s 2(24)(x) r.w.s.36(1)(va) of the IT Act we find that the Hon'ble Jurisdictional High Court in the case of CIT vs M/s.Vijay Shree Limited vide ITAT No.245 of 2011 in GA No.2607 of 201 dated 7th September, 2011 has held as under :-
"After hearing Mr. Sinha,learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Comnissioner of Income Tax vs Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to die Sec. 43(B) of the 4 Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1" April, 1988. Such being the position, the deletion of the amount paid by the Employees ' contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act.
We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal."
4.2. Respectfully following the same we allow the both the issues raised in this appeal of the assessee.
5. In the result the appeal of assessee is allowed.
Order pronounced in the court on 04.05.2012.
Sd/- Sd/-
[ौी.जाज[ माथन, Ûयायीक सदःय ] [ौी सी.डȣ.राव, लेखा सदःय]
[ George Mathan ] [ C. D. Rao ]
Judicial Member Accountant Member
(तारȣख)
तारȣख)Date: 04.05.2012.
R.G.(.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. M/s.Shree Shyam Coal Co.Ltd., 3D, Shree Ganesh Center, 216, A.J.C.Bose Road, Kolkata-700017.
2 The A.C.I.T., Circle-5, Kolkata
3. The CIT- 4. The CIT(A)-VI, Kolkata
5. DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches