AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 49
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....-17(2)/2013-14 , passed by learned Commissioner of Income Tax (Appeals)-28, Mumbai (hereinafter called "the CIT(A)"), for assessment year 2008-09, the appellate proceedings had arisen before learned CIT(A) from the penalty order dated 30.03.2013 in appeal no. DCIT 13(1)/271(1)(c)/PCJ/12-13 passed by learned Assessing Officer (hereinafter called "the AO") u/s 271(1)(c) of the 1961 Act for AY 2008-09. 2. First, we shall take up the appeal of the assessee in ITA No. 6002/Mum/2017 for AY 2008-09 which is against quantum assessment . The grounds of appeal raised by assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "Being aggrieved by the orders of the Assistant Commissioner of Income Tax, 13 (1), Mumbai, and learned Commissioner of Income-tax (Appeal) - 24, Mumbai this appeal petition is filed on the following amongst other grounds of appeal, which it is prayed may be considered without prejudice to one another. 1. On the facts, and in circumstances of the case, and in law, the Assessing Officer erred in disallowing clearing and forwarding charges of Rs. 133,569 without appreciating that income cr....
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....he above grounds of appeal at or before final disposal of appeal." 3. The assessee is engaged in the business as exporter of food stuff, provisions etc. . The assessee had made following payments towards expenses during the previous year relevant to the impugned assessment year , on which no income-tax was deducted at source( hereinafter called " the TDS") as required under provisions of Section 194C of the 1961 Act for which additions were made by the AO to the income of the assessee for infringement of section 40(a) (ia) of the 1961 Act , vide assessment order dated 01.12.2010 passed by the AO u/s 143(3) of the 1961 Act, disallowing following expenses claimed by the assessee in its Profit and Loss:- 3.2. Clearing and forwarding charges of Rs. 1,33,569/- on which no income-tax was deducted at source u/s 194C. The assessee claimed that the C&F charges of Rs. 1,33,569/- were paid to C&F agent M/s Rajgor Shipping Agency which were disallowed by the AO u/s 40(a)(ia) due to non-deduction of TDS u/s 194C and included in business income while the assessee claimed that since income comprised in total payment of clearing and forwarding charges is less than Rs. 50,000/- being only Rs. 21,....
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....n it was stated by the assessee before Ld. CIT(A) that the assessee did not wish to pursue its appeal with respect to aforesaid four disallowance of expenses which were raised in memo of appeal vide ground of appeal number 2,3,4 and 5 filed with learned CIT(A). The Ld. CIT(A) was pleased to dismiss the appeal of the assessee challenging disallowance of aforesaid four heads of expenses based on the prayers of the assessee to dismiss its appeal. Thus disallowance of these four heads of expenses attained finality vide appellate order dated 23.09.2011 passed by Ld. CIT(A). The assessee had also paid due taxes to Revenue on these additions and the matter was set to rest as the assessee did not filed any appeal with the tribunal against the appellate order passed by learned CIT(A). The learned CIT(A) vide appellate order dated 23.09.2011 had dismissed appeal of the assessee by holding as under:- " 4. As regards Ground Nos. 2,3,4 & 5, during the course of the appellate proceedings, the assessee has filed letter dt. 12/09/2011 wherein it has stated that it would not like to press the above grounds and, hence, may not be considered for relief. In view of the same, Ground Nos. 2,3,4 & 5 ar....
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....(ia) of the 1961 Act read with Section 201 of the 1961 Act and it is claimed that the payee must have paid due taxes on such income to Revenue. The assessee is working on assumed hypothesis and conjectures without bringing on record any cogent material as is required under. Thus, in nutshell no evidence is filed before us to that effect. The learned DR objected to the condonation of delay as the appeal is filed late by 2119 days beyond time prescribed by Section 253(3) of the 1961 Act. It is submitted by learned DR that the assessee itself conceded before learned CIT(A) with respect to quantum additions to dismiss its appeal on these grounds relating to disallowance of expenses on these four heads of expenses. The condonation of delay in filing this appeal is sought by the assessee from the Bench of 2119 days which translates into delay of almost six years in filing this appeal beyond the limitation prescribed u/s 253(3) of the 1961 Act on bald statement without any cogent evidences for inclusion of said payments by the payee in return of income filed with Revenue nor prescribed certificate from accountant in Form No. 26A as provided under Rule 31ACB of the 1962 Rules is filed . Th....
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....urts will lean in favour of doing substantial justice . But at the same time , the litigants have to be vigilant in persuing their disputes and merely because the consultant has advised after almost six years that there is some possibility of winning the appeal cannot be a ground to file an appeal almost 2119 days beyond the limitation prescribed u/s 253(3) of the 1961 Act. The assessee itself conceded before learned CIT(A) vide letter dated 12.09.2011 to dismiss grounds of appeal concerning these four heads of disallowance of expenses which resulted in dismissal of these grounds of appeal by learned CIT(A) vide appellate order dated 23.09.2011. The assessee has now taken a u-turn almost six years after dismissal of its appeal by learned CIT(A) by filing this appeal before tribunal . There has to be an end to litigation as the other party in whose favour the issue is decided in litigation has also right to enjoy the fruits of litigation. There are certain rights which get vested in the litigant in whose favour the dispute is decided and this vested right cannot be unsettled in an casual manner. In our considered view based on the factual matrix of the case before us and our detaile....
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.... covered by section 44AB and tax audit report has also been furnished by the assessee. In respect of column No.27 of the Tax audit report, the assessee's auditor has claimed that question of the assessee complying with provisions of Chapter XVIIB is not applicable. In the further columns 27(b) all the four items are mentioned as NIL, though the main point at 27(a) was reported negatively. Therefore, even the deductibility of the question regarding deducibility or otherwise of the above amounts under section 194, neither the assessee, nor the auditor has made any qualifying observation. The very purpose of incorporating section 44AB with effect from A.Y.1985-86 is to ensure that all the important provisions of the Act are complied duly. The very debate on this point was initiated only at and after the assessment proceedings and never before that, by way of any qualifying observation by the auditor or by a foot note to the return of income etc. It is also pertinent to note here that the mandatory respect of the Audit report is not maintained. 4. The provisions of section 194C are also unambiguous insofar as it speaks of "any payment" and does not take out payments of any part....
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....CIT (2013) 36 CCH 89 (Mum) the hon'ble ITAT gave similar belief due to bonafide belief that amount in question were not liable to TDS. No such plea has been made before me. I am thus unable to accept, as a general proposition of law, that penalty cannot be levied for such infractions. Reliance Petro judgment was about claim unsustainable in law. Here it is more of a technical breach but one the appellant could have walked away with had it not been under scrutiny. On facts, and holding respectfully that cited judgments and those quoted by me (supra) are not applicable on facts, no bonafide belief having been pleaded. The penalty is accordingly confirmed. In the result, the appeal is DISMISSED." 10. Being aggrieved by the appellate order dated 20.06.2017 passed by learned CIT(A) confirming penalty levied by the AO u/s 271(1)(c) of the 1961 Act, the assessee has filed an appeal with the tribunal. The assessee has now claimed that the expenses as were claimed under the four heads which were disallowed in quantum by AO by invocation of Section 40(a)(ia) of the 1961 Act for non deduction of TDS u/s 194C not only contained the income component but it also included reimbursemen....
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....as required under provisions of Section 194C of the 1961 Act for which additions were made by the AO to the income of the assessee for infringement of section 40(a) (ia) of the 1961 Act by disallowing following expenses claimed by the assessee in its Profit and Loss:- 11.2.1 Clearing and forwarding charges of Rs. 1,33,569/- on which no income-tax was deducted at source u/s 194C. The assessee claimed that the C&F charges of Rs. 1,33,569/- were paid to C&F agent M/s Rajgor Shipping Agency which were disallowed by the AO u/s 40(a)(ia) due to non-deduction of TDS u/s 194C and included in business income while the assessee claimed that since income comprised in total payment of clearing and forwarding charges is less than Rs. 50,000/- being only Rs. 21,000/- disallowance was not warranted.The AO relied on the provisions of Section 194C to hold that for clearing and forwarding expenses , the TDS is required to be deducted on total payment. 11.2.2. Disallowance of Terminal Handling Charges to the tune 1,54,028 on account of non-deduction of TDS u/s 194C. The assessee has claimed to have paid Terminal Handling Charges of Rs. 1,54,028/- to M/s Swift Freight (I) P. Ltd. which was disallowe....
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....r heads of expenses attained finality vide appellate order dated 23.09.2011 passed by Ld. CIT(A). The assessee had also paid due taxes to Revenue on these additions and the matter was set to rest as the assessee did not filed any appeal with the tribunal against the appellate order passed by learned CIT(A). The learned CIT(A) vide appellate order dated 23.09.2011 had dismissed appeal of the assessee against quantum assessment , by holding as under:- " 4. As regards Ground Nos. 2,3,4 & 5, during the course of the appellate proceedings, the assessee has filed letter dt. 12/09/2011 wherein it has stated that it would not like to press the above grounds and, hence, may not be considered for relief. In view of the same, Ground Nos. 2,3,4 & 5 are dismissed as not pressed." 11.4The assessee later filed an appeal with tribunal challenging decision of learned CIT(A) on quantum wherein the appeal before tribunal was filed on 25.09.2017 with an delay of 2119 days beyond the limitation period stipulated u/s 253(3) of the 1961 Act. We have already dismissed this appeal vide this common order on the grounds that no sufficient cause is made out by the assessee for condoning delay of 2119 days....