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TMI Blog2019 (3) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... tification u/s 154 cannot be allowed - ITA No.538/Lkw/2018 - - - Dated:- 22-2-2019 - SHRI T. S. KAPOOR, ACCOUNTANT MEMBER For The Appellant : Shri Abhinav Mehrotra, Advocate For The Respondent : Shri C. K. Singh, D.R. ORDER PER T. S. KAPOOR, A.M. This is an appeal filed by assessee against the order of learned CIT(A)-I, Kanpur dated 19/04/2018 pertaining to assessment year 2012-13. 2. In this appeal, the assessee has taken various grounds of appeal challenging the action of learned CIT(A) whereby he has confirmed the order passed by the Assessing Officer u/s 154 of the Act. The various grounds of appeal are reproduced below: 1. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating that there was no mistake in the assessment order which is rectifiable u/s. 154. 2. That the Ld. CIT Appeals has further erred in law as well as on facts in confirming the order of the A.O. passed u/s. 154 on the basis of audit objection, without appreciating that there was no mistake of law and the Appellant by Shri Abhinav Mehrotra, Advocate Respondent by Shri C. K. Singh, D.R. 2 issue of non-deduction of TDS ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture in view of the provisions of section 40(a)(ia) of the Act and therefore, he issued notice u/s 154 of the Act for rectification. In view of the notices issued by the Assessing Officer u/s 154 of the Act, the assessee, vide reply dated 09/12/2015, submitted that assessee had not deducted TDS on the transactions but had not claimed expenses in the profit loss account. It was further submitted that question of disallowance will arise when expenditure has been claimed. It was also submitted that the contractor, to whom the payment was made, had taken the receipt in his income and in this respect the assessee also submitted a certificate dated 18/12/2015 from Shivtej Developers wherein the said contractor had accepted that ₹ 34,71,938/- has been received without TDS and entire receipt has been taken in turnover and tax has been paid as per I.T. Act. The Assessing Officer however required Shivtej Developers to furnish the copy of ITR/copy of account of the assessee, balance sheet and profit loss account but on account of non receipt of any reply, the Assessing Officer held that the contention of the assessee that the contractor company has shown entire receipt of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of these facts and circumstances, the issue of deduction of tax at source was highly debatable and therefore, was not liable for action u/s 154 of the Act. 5 6. Learned D. R., on the other hand, heavily relied on the orders of authorities below. 7. I have heard the rival parties and have gone through the material placed on record. I find that original assessment u/s 143(3) was completed vide order dated 13/02/2015 and later on the Assessing Officer observed that assessee had not deducted tax on a payment which was made to Shivtej Developers. The assessee, in view of the notice u/s 154, submitted that the contractor company had shown the entire receipt of ₹ 34,71,938/- in its turnover and had paid taxes as per I.T. Act and therefore, in view of amendment to proviso to section 40(a)(ia), the assessee was not an assessee in default and therefore, the provisions of section 40(a)(ia) were not applicable. However, the Assessing Officer held that the amendment was made by Finance Act, 2012 which was effective from assessment year 2013-14 only. However, I find that Hon'ble Allahabad High Court in the case of Ghanshyam Chaudhury vs. Pr. CIT in Income Tax Appeal No. 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is a pre-requisite for making block assessment. Under the said procedure, the Explanation is inserted in Section 158BB, which is the computation section, explaining the method of computation of undisclosed income of the block period. It is now well accepted that this Chapter is a complete code in itself providing for selfcontained machinery for assessment of undisclosed income for the block period of 10 years or 6 years, as the case may be. In case of regular assessments for which returns are filed on yearly basis, Section 4 of the Act is the charging section. However, at what rate the income is to be taxed is specified every year by the Parliament in the Finance Act. In contradistinction, when it comes to payment of tax on the undisclosed income relating to the block period, rate 7 is specified in Section 113 of the Act. It remains static at 60% of the undisclosed income which is the categorical stipulation in the Section 113 of the Act. Section 158BA(2) of the Act clearly states that the total undisclosed income relating to the block period shall be charged to tax at the rates specified Under Section 113 as income of the block period irrespective of previous year or yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inserted making it a charging section. Thus, a diagnostic of Chapter XIVB of the Act leads to irresistible conclusion that it contains all the provisions starting from charging section till completion of assessment, by prescribing special procedure in relation thereto, making it a complete Code by itself. Looking it from this angle, the character and nature of 'undisclosed income' referred to in Chapter XIVB becomes quite distinct from 'total income' referred to in Section 5. It is of some significance to observe that when a separate charging section is introduced specifically, to assess the undisclosed income, notwithstanding a provision in the nature of Section 4 already on the statute book, this move of the legislature has to be assigned some reason, otherwise, there was no necessity to make a provision in the form of Section 158BA(2). It could only be that for assessing undisclosed income, charging provision is Section 158BA(2) alone. 26. Notwithstanding the aforesaid position clarified with us, we are of the opinion that dehors this discussion, in any case on the application of general principles concerning retrospectivity, the proviso to Section 113 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be the basis of every legal rule as was observed in the decision reported in L'Office Cherifien des Phosphates v. Yamashita- Shinnihon Steamship Co. Ltd. (1994) 1 AC 486. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and 10 this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later. 30. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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