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TMI Blog2022 (10) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... e being no reason in law for obtaining it, to no consequence, as indeed its subsequent filing with the AO, who, without stating any reason for the same, found it acceptable . The only obligation on the assessee was to furnish the prescribed particulars to the prescribed income-tax authority within the prescribed time, and which the assessee claims as non-prescribed and the ld. Pr. CIT as F/26Q, both of which we find as incorrect. There is no change in the prescribed form, i.e., F/15-J. Form 26Q, on the other hand, is a statement in respect of tax deducted at source (as against not deducted u/s. 194C), obliged to filed u/s. 200, and which continues to obtain both prior and subsequent to 01/10/2009. There is no interface between the two. Thus, while the assessee is clearly in the wrong to say that no Form stood prescribed for him to have complied therewith, with we having found him to have made a false statement qua receipt of declaration/s from the contractor, as required u/s. 194C(6), which assumes significance as it is only on receipt thereof that the obligation u/s. 194C(7) comes into play, and the CIT rightly finds it as incorrect, yet quotes the prescribed Form, which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , directed for verification per para 5.5 of this order. The same is unwarranted under the circumstances, and the AO shall in the set aside proceedings limit his adjudication to that stated at para 5.8 of this order, and which, in effect, is the legal consequence of the non-furnishing of Form 15-J, as required u/s. 194C(7). Assessee s appeal is dismissed. - ITA Nos. 05/JAB/2019 - - - Dated:- 30-9-2022 - Sh. Sanjay Arora, Hon'ble Accountant Member And Sh. Manomohan Das, Hon Ble Judicial Member For the Appellant : Sh. Dhiraj Ghai, FCA For the Respondent : Sh. U.B. Mishra, CIT-DR ORDER PER SANJAY ARORA, AM: This is an Appeal by the Assessee directed the revision of his assessment under section 147 read with sec. 143(3) of the Income Tax Act, 1961 ( the Act , hereinafter) dated 17/02/2016 for the Assessment Year (AY) 2010-11 of his late father Shri Mahendra Kumar Jain by the Principal Commissioner of Income Tax (Pr. CIT) vide order u/s. 263 dated 26/03/2018. The appeal raising several grounds, we shall take them in the order in which they were argued by Shri Ghai, the ld. counsel for the assessee. 2. It was firstly pleaded that the assessment made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings would not operate to disrupt or impair this jurisdiction, since validly assumed, in any manner. Assessment was finally framed on 17/02/2016 after hearing his son, the appellant and the only son of MKJ. The legal representative/s (LR/s) of a deceased assessee is, on his death, by law deemed as the assesse/s, and liable to be proceeded against. All that is required is to follow a procedure and bring on record the assessee s legal representative/s, i.e., on whom his assets have devolved, who then becomes liable to be assessed in respect of the deceased s income as well as to pay the demand (to the extent of the assets devolved), if any, arising in consequence (s. 159). That is, the only issue is of substitution, i.e., bringing the LRs on record and put them to notice, which is admitted in the instant case. The assessment proceedings, which stood joined by and, thus, continued and concluded after hearing the late assessee s son, the appellant, is thus valid. The mention of the name of the assessee s father, instead of him, as his representative assessee, in the title of the assessment order, is surely not correct. It is however apparent that the assessment is on him as the LR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, validly initiated, and concluded on the LR, whose is deemed by law (s.159) to be an assessee, was held as valid notwithstanding that the title of the order was not happily worded, which though would not make it invalid for that reason and, besides, is saved by s. 292B. 3.3 The assessment dated 17/2/2016, which has since attained finality, is a valid assessment in law, with the only change that the same, as indeed correctly understood by the parties, is of the appellant as the representative assessee of his late father, MKJ. The assessee s challenge is without merit. 4.1 The next, without prejudice argument advanced, placing reliance on the decision in Pr. CIT v . Maruti Suzuki Ltd . [2019] 416 ITR 613 (SC), was that the notice u/s. 263 and, indeed, the impugned order u/s. 263, stands framed, again in the name of the assessee s father, late Shri Mahendra Kumar Jain (MKJ), so that the same is a nullity in law. In our view, the reliance is misconceived. The whole premise of the proceedings, validly initiated, as would also be apparent from the afore-referred decisions, is the observance of the principles of natural justice, so that no prejudice stands caused, vitiating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has relied on the decision in Spice Enfotainment. (emphasis, ours) The decision in Maruti Suzuki Ltd . (supra) thus turned on the aspect of absence of jurisdiction, which is without doubt fundamental to the validity of the proceedings. Though this decision stands since turned, i.e., on the aspect of ceasure to exist of an amalgamating company ( Pr. CIT vs. Mahagun Realtors (P.) Ltd . [2022] 443 ITR 194 (SC)), the same would continue to hold qua a valid assumption of jurisdiction. There is, thus, no divergence qua the basic postulate of law, but an absence of the jurisdictional fact, a condition precedent , for framing an assessment and, thus, an absence of a legal basis, which led the Apex Court to decide differently. The same would though have no bearing in the instant case inasmuch as the notice u/s. 263 is not a jurisdictional notice, even as explained by the Apex Court per its decisions, as in Gita Devi Aggarwal v. CIT [1970] 76 ITR 496 (SC); CIT v. Electro House [1971] 82 ITR 824 (SC); and again recently in CIT v. Amitabh Bachchan [2016] 384 ITR 200 (SC), wherein, reiterating the law as explained earlier, it, drawing a distinction between a notice u/s. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order (para 4) stands issued on 27/02/2018 and duly received by the assessee, implying by Sh. Sauarbh Singhai. Inasmuch as he could not possibly prove a negative, though ought to have, strictly speaking, pressed his claim through a sworn affidavit to that effect, the file folder of s.263 proceedings was called for by the Bench to confirm this assertion, and duly produced by the ld. CIT-DR on the next day of hearing. The track report of the delivery (obtained from the cite of the Indian Posts and Telegrams) is placed in the file. The same shows the notice to be, booked on 03/3/2018 (Consignment Code: EI 027733455 IN), delivered on 05/3/2018, through Sagar City SO, which establishes the service thereof. Copy of the same is taken on record. Shri Ghai would, upon this, next submit that there was a change of residence of the family after the death of MKJ on 15/09/2015. There is, however, nothing on record to exhibit this, or if the change of address was communicated to the AO, as it is only in that case that the ld. Pr. CIT would, upon an examination of the assessment record, come to know of the said change in address, to then communicate at the new (changed) address. Rather, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of any positive material in the file folder of the revision proceedings in its respect, extended to the impugned order, claimed per the memo of appeal (Form 36) as received by the assessee-appellant only on 31/12/2018. We clarify this as a similar finding qua the impugned order would oust the instant appeal as barred by time. 5.1 We, next, consider the assessee s case on merits. While doing so we are conscious that the assessee s case has been unpresented before the ld. Pr. CIT. We have, however, found as a fact of the assessee having received the notice u/s. 263. A claim for restoring the matter back to his file for consideration, not made before us, could not be, even if made, therefore entertained. Further still, the assessee s case before us is principally the same as before the AO. Accordingly, not restoring it back for being considered by the revisionary authority, who has considered the assessee s case as presented before the assessing authority, would not prejudice the cause of either side before us. 5.2 The only issue raised in revision is the failure on the part of the AO to examine the assessee s claim qua freight, allowed in full, i.e., at Rs.233.74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 194C(7), as there was no prescribed form, is ambiguous for the fact if the statutory provisions of the Act mandates submission of requisite form before the prescribed authority, then non-submission of the same would deprive the benefits/ immunity obtained for non-deduction of tax at source from the freight expense claimed. The AO should have ascertained that the assessee had filed form No. 26Q which has been specifically designed to filing such details. 6. For the reasons stated above, since it is apparent that the AO has not applied his mind for proper examination of the case to give cognizance to the mandatory provisions of the Act/Rule. The failure of the Assessing Officer to verify the above mentioned facts and non-application of mind to give cognizance to the conditions specified in the provisions of section 194C(7) of the Act, has made the assessment order erroneous in-so-far as it is prejudicial to the interest of Revenue. 5.4 The ld. Pr. CIT has found the impugned assessment as erroneous and prejudicial to the interests of the Revenue as there has been non-application of mind by the AO for the following reasons: a). non-verification of the relevant facts; b). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source on the filing of the declaration by the creditor/payee. The sums credited or paid prior to 01/10/2009 would not, clearly, and admittedly, be covered by the amended law effective 01/10/2009. The matter, accordingly, would stand to be restored to the file of the AO to verify the foregoing aspects, and decide in terms of the clear law and facts as found, neither clarified by the assessee nor indeed ascertained on verification by the AO. 5.6 Qua the second aspect, we begin by reproducing the relevant, extant provisions of law, being ss. 194C(6) (7), as under: 194C. Payments to contractors. (1) Any person responsible for paying . (2) to (5) x x x x x x (6) No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business of plying, hiring or leasing goods carriages, on the furnishing of his Permanent Account Number, to the person paying or crediting such sum. (7) The person responsible for paying or crediting any sum to the person referred to in sub-section (6) shall furnish, to the prescribed income-tax authority or the person authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law for obtaining it, to no consequence, as indeed its subsequent filing with the AO, who, without stating any reason for the same, found it acceptable . The only obligation on the assessee was to furnish the prescribed particulars to the prescribed income-tax authority within the prescribed time, and which the assessee claims as non-prescribed and the ld. Pr. CIT as F/26Q, both of which we find as incorrect. There is no change in the prescribed form, i.e., F/15-J. Form 26Q, on the other hand, is a statement in respect of tax deducted at source (as against not deducted u/s. 194C), obliged to filed u/s. 200, and which continues to obtain both prior and subsequent to 01/10/2009. There is no interface between the two. Thus, while the assessee is clearly in the wrong to say that no Form stood prescribed for him to have complied therewith, with we having found him to have made a false statement qua receipt of declaration/s from the contractor, as required u/s. 194C(6), which assumes significance as it is only on receipt thereof that the obligation u/s. 194C(7) comes into play, and the ld. Pr. CIT rightly finds it as incorrect, yet quotes the prescribed Form, which the assessee ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs. 1,26,59,566/-, on which TDS was deducted, was paid during the period 01/04/2009 to 30/09/2009 and the rest of the amount of Rs. 1,07,14,626/- has been paid during the period from 01/10/2009 to 31/03/2010 and according the provision of section 194(C)(6) the TDS on the same was not deducted. On verification the contention of the assessee was found correct. The same unequivocally confirms that no inquiry on the aspect raised by the ld. Pr. CIT, i.e., the cumulative satisfaction of the conditions of ss. 194C(6) 194C(7), as against s. 194C(6) alone, qua which only the AO has limited his inquiry and issued his finding, had been made in assessment. The same simultaneously confirms that the sum of Rs. 107.15 lacs on which TDS stands deducted by the assessee pertained to the period 01/10/2009 to 31/3/2010, directed for verification per para 5.5 of this order. The same is unwarranted under the circumstances, and the AO shall in the set aside proceedings limit his adjudication to that stated at para 5.8 of this order, and which, in effect, is the legal consequence of the non-furnishing of Form 15-J, as required u/s. 194C(7). 6. For the detailed reasons stated hereinbef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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