The Principal Commissioner Of Income Tax-28 v. Shashikiran Giriraj Singh

Ladda IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL No. 1708 of 2016 The Principal Commissioner of Income Tax-28 ..Appellant.Vs Shashikiran Giriraj Singh ..Respondent. Mr. N.C. Mohanty, for the appellant. Ms. Aasifa Khan for the Respondent. CORAM : AKIL KURESHI & B. P. COLABAWALLA, JJ. DATED :- 12TH FEBRUARY, 2019. P.C.: 1.The Revenue is in appeal against the judgment of theIncome-tax Appellate Tribunal (“the Tribunal”). The followingquestions were presented for our consideration: “1.Whether on the facts and in the circumstances of the caseand in law, the Tribunal is justified in concluding that thereis no violation of Rule 46A of Income Tax Rules by theCommissioner of Income Tax (Appeals)”and in law, the Tribunal is justified in concluding that thereis no violation of Rule 46A of Income Tax Rules by theCommissioner of Income Tax (Appeals)” 2.Whether on the facts and in the circumstances of the caseand in law, the Tribunal is justified in confirming the orderof CIT (A) in deleting the addition of rs.3,60,02,632/-under Section 40 (a) (ia) made by the Assessing Officer?”and in law, the Tribunal is justified in confirming the orderof CIT (A) in deleting the addition of rs.3,60,02,632/-under Section 40 (a) (ia) made by the Assessing Officer?” 2.The respondent-assessee is an individual and is engagedin transportation business in the name of M/s Mateshwari Transport,Flat No.A-62, Mahavir Market, Navi Mumbai. The Assessing Officerdisallowed expenditure of Rs.3,60 Crores under Section 40 (a) (ia) ofthe Income-tax Act, 1961 on the ground that while making thepayment to the truck owners for transportation charges tax at sourcewas not deducted by the assessee. The assessee carried the matter inappeal and raised two contentions. Firstly, that he was not requiredto deduct the tax at source at all because the assessee was notsubject to statutory audit under Section 44AB of the Act. His secondcontention was that none of the persons from whom he had hiredtrucks for transportation activity owned more than two trucks. Hepointed out that necessary declarations from such persons inprescribed form were produced before the Income-tax Officer (TDS).The learned Commissioner (Appeals), the Assessing Officerpersonally verified the details submitted by the assessee includingdeclarations in Form No. 151. The revenue carried the matter inappeal before the Tribunal. By the impugned judgment, the Tribunaldismissed revenue's appeal making the following observations:- “8. We have considered the submissions of theparties and perused the material available onrecord. As far as the allegation of the Departmentthat learned Commissioner (Appeals) has “8. We have considered the submissions of theparties and perused the material available onrecord. As far as the allegation of the Departmentthat learned Commissioner (Appeals) has admitted additional evidence in violation ofsection 46A, we are of the view that the same istotally misconceived. On a perusal of theimpugned order of the learned Commissioner(Appeals), it is patent and obvious that theAssessing Officer was given full opportunity toverify the evidence produced by the assessee andbefore deciding the issue, learned Commissioner(Appeals) also heard the opinion of the AssessingOfficer on the additional evidences. Therefore,allegation of the Department and AssessingOfficer was not given opportunity, in our view,cannot be accepted. We therefore, reject thegrounds raised by the assessee violation of rule46A. As far as merits of the addition areconcerned, it is clear from the discussion made bythe learned Commissioner (Appeals) that duringthe assessment proceedings, assessee's case wasmisrepresented by the learned Counsel forassessee and he did not furnish correct facts andinformation before the Assessing Officer. This isproved from the documentary evidencessubmitted before the first appellate authority, toshow that not only the parties to whom paymentswere made are different but also the fact thatentire payment made to the persons concerned areagainst declarations made in form No.151,requesting for non-deduction of tax. It is also afact on record that assessee has furnished thedeclaration in form No.151 before the Income TaxOfficer (TDS). In fact, the Assessing Officer,while appearing in person before the learnedCommissioner (Appeals) has himself verified notonly the details of payments made to the truckowners along with the declarations in formNo.151, but also verified the same with referenceto assessee's ledger account and bank statementsand found the claim of the assessee to be correct.Therefore, when the claim of the assessee wasfound to be factually correct in the light ofdocumentary evidences submitted, we do not seeany reason why the addition made by theAssessing Officer should have been upheld. Whenthe assessee as a deductor receives declaration inform No.151 from the payees, he is duty boundnot to deduct tax at source. If the payees have made false declaration, it is for the Department toproceed against them, but assessee cannot bemade liable for non-deduction of tax at source onsuch payments. Moreover, as could be seen, theassessee has discharged its obligation byfurnishing the declarations received in form No.151, before the Income Tax Officer (TDS). In thatview of the matter, assessee had no obligation todeduct tax under the TDS provisions on thetransport charges paid, consequently nodisallowance under section 40 (a) (ia) of the Actcan be made. In view of the aforesaid, we upholdthe order of the learned Commissioner (Appeals)by dismissing the ground raised by thedepartment”. 3.Perusal of the documents on record with the assistance oflearned counsel for the parties would show that the entire issue isbased on appreciation of materials on record. The CIT (Appeals) heldthat since the truck owners whose services were hired for thetransportation did not own more than two trucks and necessarydeclaration in this respect was also issued by them requesting theassessee not to deduct tax at source, disallowance under Section 40(a)(ia) of the Act could have been made. No perversity is pointed outin the order impugned. In such factual findings, no question of lawarises. The appeal is dismissed. (B.P. COLABAWALLA, J.) (AKIL KURESHI, J)