Principal Commissioner Of Income Tax-I, Kolkata v. Kolkata Assam Roadlines Pvt. Ltd

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE IA NO: GA/1/2017(OLD NO. GA/2811/2017)INITAT/299/2017 PRINCIPAL COMMISSIONER OF INCOME TAX-I, KOLKATAVS.KOLKATA ASSAM ROADLINES PVT. LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM A N DTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate: November 30, 2021. Appearance :Mr. S. Roy Chowdhury, Adv.… for the appellant The Court : This appeal by the Revenue filed under Section260A of the Income Tax Act, 1961 (the Act, in brevity) is directedagainst the order dated 5[th] April, 2017 passed by the Income TaxAppellate Tribunal, Kolkata Bench “C”, Kolkata in ITA No.1524/Kol/2014 for assessment year 2010-11. The Revenue has raised the following substantial question oflaw for consideration: 1.Whether on the facts and circumstances of the case theTribunal was justified in law in upholding the order of theCommissioner of Income Tax [Appeals] by which he deletedthe disallowance of Rs.99,60,000/- and Rs.6,48,98,583/-under section 40[a][ia] of the Act made by the AssessingOfficer and its purported findings in this regard arearbitrary, unreasonable and perverse ?Tribunal was justified in law in upholding the order of theCommissioner of Income Tax [Appeals] by which he deletedthe disallowance of Rs.99,60,000/- and Rs.6,48,98,583/-under section 40[a][ia] of the Act made by the AssessingOfficer and its purported findings in this regard arearbitrary, unreasonable and perverse ? We have heard Mr. Roy Chowdhury, learned standing counsel for the appellant/Revenue. The assessee filed his return of income for the assessmentyear under consideration [assessment year 2010-11] disclosing a totalincome of Rs.6,33,102/-. The case was processed under section143[1] of the Act and, subsequently selected for scrutiny and noticesunder sections 143[2] and 142[1] of the Act was issued and the casewas discussed with the authority to explain the case of the assessee.Amongst other things the issue which is subject matter of this appealis whether the assessee had violated the provision of section 40[a][ia]of the Act in respect of the payment for lorry hire charges on the soleground that they have not filed the declaration in Form 15-I beforepayment or credit of such charges. Consequently, the AssessingOfficer by order dated 26[th] March, 2013 held that the assessee hadviolated the provision of section 40[a][ia] of the Act in respect of lorryhire charges and the same was disallowed and added back to the totalincome return. Aggrieved by the same, the assessee filed appeal before theCommissioner of Income Tax [Appeals]-I. The assessee had producedthe form of declaration as also the relevant details including the PANnumber of the carriers. These documents were accepted as additionalevidence under rule 46A of the Income Tax Rules. The remand reportwas called for by the Assessing Officer, who on examining thedocuments and the details of the carriers did not render any adverseopinion on those documents. Thus, taking note of the fact situationand that the assessee had been able to produce Form 15-I declaration Aggrieved by the same, the assessee filed appeal before theCommissioner of Income Tax [Appeals]-I. The assessee had producedthe form of declaration as also the relevant details including the PANnumber of the carriers. These documents were accepted as additionalevidence under rule 46A of the Income Tax Rules. The remand reportwas called for by the Assessing Officer, who on examining thedocuments and the details of the carriers did not render any adverseopinion on those documents. Thus, taking note of the fact situationand that the assessee had been able to produce Form 15-I declaration from the truck owners as well as the PAN number details of the truckowners, the CIT[A] granted relief to the assessee. The Revenue beingaggrieved by such order preferred appeal before the Tribunal. TheTribunal reconsidered the factual position and found that the CIT[A]was justified in permitting the assessee to produce the documents atthe appellate stage, examined the remand report and found that thereis no justification for denying the relief to the assessee on a technicalground. In this regard, reliance was placed on a decision of the HighCourt of Madras in the case of ITO vs. Adi Sankara Spinning Mills Pvt.Ltd. in Tax Case No.1194 of 2010 dated 21.12.2010. Accordingly, thehold that this being a technical breach it can be condoned with regardto the disallowance of freight charges on the sum of Rs.6,48,98,583/-on the ground of non-deduction of tax. The Tribunal found that therelevant amendment was effective from 1.4.2009 and is applicable forthe whole of the year, that is for the whole assessment year 2010-11.The Tribunal noted that the CIT[A] has rendered a finding that thetotal payments made during the period 1.4.2009 to 30.9.2009 wasonly Rs.5,99,81,049/- and not Rs.6,48,98,583/- as arrived at by theAssessing Officer on an estimation basis. Further, the Tribunal notedthat even for the payment for the first half of the year the assesseehad obtained form 15-I for declaration and had submitted the sameduring the appellate proceeding, which were subject to remandproceeding for verification and no adverse inference was drawn on thesame by the Assessing Officer. The assessee apart from sustainingtheir case on facts placed reliance on the decision of High Court ofGujarat in CIT vs. Valibhai Khanbhai Mankad in Tax Appeal No.1182 of 2011 dated 1.10.2012. The Tribunal after noting the said decision,held that in the light of the factual findings recorded by us and alsofollowing the decision of the Gujarat High Court, the disallowanceunder section 40[a][ia] as set aside by CIT[A] was affirmed. It is thesubmission of the learned senior standing counsel for theappellant/revenue that as against the decision of the High court ofGujarat in the aforementioned decision the Revenue has filed aSpecial Leave Petition and the same is still pending. As noted above, the Tribunal proceeded to reconsider thecase noted by the CIT[A] and granted relief to the assessee anddecision of the Tribunal was solely based on the decision of the HighCourt of Gujarat, which is not subject matter of appeal before theHon’ble Supreme Court. Therefore, we are of the view that the case onhand is entirely factual, which has been considered and analysed bythe CIT[A] while granting relief to the assessee and re-examined by theTribunal while affirming the order passed by the CIT[A]. Thus, we find that there is no substantial question of lawarising for consideration in this appeal. Consequently, the appeal failsand is dismissed. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)