Chittewan v. Assistant Commissioner Of Income-Taxcircle 2(1)(1), Room

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2205 OF 2022 Ameya Logistics Private Limitedhaving its address at Village DhasakoshiPost Khoproli, Khopte, Ward 2(1)(1),Mumbai, Taluka Uran,District Raigad-410 212, MaharashtraIndia…Petitioner Versus 1. Assistant Commissioner of Income-taxCircle 2(1)(1), Room No.561, 5[th] Floor,Aaykar Bhavan, Maharshi Karve Road,Mumbai, Maharashtra-400 020. 2. Principal Commissioner of Income Tax-2, Room No.344, 3[rd] Floor,Aayakar Bhavan, Maharshi Karve Road,Mumbai, Maharashtra-400 020 3. Union of India,(through the Secretary,Department of Revenue,Ministry of Finance,Government of India),North Block, New Delhi-110 001…Respondents *** Mr. Madhur Agrawal a/w Mr. Fenil Bhatt and Ms. Mitali Bhatt i/b Ms. Khusboo Shah for the Petitioner. Mr. Suresh Kumar for the Respondents. *** CORAM : DHIRAJ SINGH THAKUR & KAMAL KHATA, JJ. DATE : 2 JANUARY 2023 P.C. .The Petitioner challenges inter alia the notice issued underSection 148 of the Income Tax Act, 1961 (“the Act”) relevant to theassessment year 2015-16. Mr. Agrawal, learned Counsel appearingfor the Petitioner drew our attention to the reasons, which werefurnished to the Petitioner, based upon which, re-assessmentproceeding are sought to be initiated by the Respondents, whichreads as under : “From the accounts of the assessee it is seen that theassessee had debited an amount of Rs.24,47,17,600/- asCommission in Proft and Loss Account. Further, theAuditor in Form 3CD qualifed in Enclosure ‘N’ that outof total commission or brokerage of Rs.22,86,62,167/-,TDS or Rs.11,22,269/- was deducted against theamount of Rs.1,12,22,630/-. Thus, on an amount ofRs.21,7439,537/- (228662167-11222630) the auditorreported that no TDS was deducted. It was also noticedfrom the 3CEB report that the commission ofRs.22,14,25,540/- was paid to the related party i.e. M/sCMA CGM Agency India P. Ltd. and disclosed under thedetails of 40A(2)(b) of the Income tax Act. Thus, theassessee has claimed commission expenditure ofRs.24,47,17,600/-, however, only deducted TDS ofRs.11,22,269/- on the expenditure of Rs.1,12,22,630/-and has not deducted TDS of Rs.22,14,25,540/- inrelation to payment made to related party i.e. M/s CMAAGM Agencies India Pvt. Ltd. As per the 3CEB reportthe expenditure claimed is on account of commission,which is liable for TDS as per section 194H of the Act.Since the assessee failed to comply the TDS provisions,the deduction claimed on the expenditure is notallowable as per section 40a(ia) of the Act. As theassessee failed to comply the provisions of Section194H while making the commission payment of Rs.22,14,25,540/-, the expenditure claimed is not fullyallowable as per Section 40a(ia) of the Act, whichworksouttoRs.6,64,27,662/-(30%ofRs.22,14,25,540/-).” 2It was urged that re-assessment proceedings are sought to beinitiated on account of failure of the Petitioner to comply with theTDS provision with regard to payment of Rs.22,12,25,540/-, whichwas a payment made to M/s CMA CGM Agency India Pvt. Ltd.,which is stated to be an agent acting for and on behalf of CMA CGMFrance. Learned Counsel for the Petitioner vehemently urged thatthe entire action on part of the Respondents in initiating re-assessment proceedings was without any basis, unjustifable andillegal inter alia for the reason that there was a certifcate issued interms of Section 195 of the Act in favour of the said entity M/s CMACGM France dated 21 April 2014 issued by the Assistant Director ofIncome Tax (International Taxation)-1(2), Mumbai, certifying thatthe said agency was entitled for 100 per cent relief on account ofincome from operation of the vessels being operated by the saidcompany. It was, in that backdrop, therefore, urged that the assessingoffcer had been completely oblivious to the said certifcate havingbeen issued and further more that the said fact was brought to thenotice of the assessing offce in objections fled to reopening of the assessment which were not at all specifcally dealt with by theassessing offcer. 3We have gone through the Order dated 17 February 2022,whereby the Petitioner raised objection to the re-opening ofassessment proceedings, which is conspicuously silent on the issuewhich was highlighted by the Petitioner with regard to a certifcatehaving been issued under Section 195 of the Act in favour of theFrench entity. Mr. Agrawal, further, sought to urge before us that thePetitioner can succeed on the other grounds as well, as there wereother jurisdictional pre-conditions in terms of the frst proviso toSection 147 of the Act, which have not been complied with.However, we are of the opinion that the issue needs to be consideredin totality and since the Order dated 17 February 2022 passed bythe assessing offcer does not deal with one of the issues, which wasraised before the assessing offcer, it would be appropriate if thematter is remanded to the assessing offcer for a freshconsideration and decision specifcally on the issue raised by thePetitioner and not decided as discussed above. Be that as it may, the Order impugned dated 17 February 2022 is set aside and the matter is remanded to the JurisdictionalAssessing Offcer for a fresh consideration and decision within eightweeks from today. 4The Petitioner would be at liberty to raise additional grounds,if any, which may also be considered by the Jurisdictional AssessingOffcer while passing the Order afresh. 5The Writ Petition is disposed of accordingly. (KAMAL KHATA, J.) (DHIRAJ SINGH THAKUR, J.) Digitally signed byRAJESHRAJESH VASANTVASANTCHITTEWANCHITTEWANDate: 2023.01.0517:34:15 +0530