SA No.- 41/Del/2019.
M/s Umaxe Projects (P) Ltd.
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: `F' : NEW DELHI)
BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
SA No. 41/Del/2019
(Arising out of ITA No:- 206/Del/2019)
(Assessment Year: 2013-14)
Umaxe Projects Private Limited. DCIT,
Vs. Circle 21(1),
New Delhi.
PAN No.-AAACU9250F
APPELLANT RESPONDENT
Assessee by : Shri R.K. Kapoor, CA
Revenue by : Shri Surender Pal, Sr. DR
ORDER
Per Anadee Nath Misshra, AM
Assessment Order dated 01.03.2016 Was passed by the Assessing Officer ("AO",
for short) against which the assessee filed appeal before Commissioner of Income Tax
Appeal-9, New Delhi ["Ld. CIT(A)", for short]. Vide order dated 17.10.2018 of the Ld.
CIT(A) the assessee was granted partial relief. However, an amount of Rs.
2,79,01,096/- remained outstanding after partial relief granted by the Ld. CIT(A).
Through this stay application, the assessee has sought the stay of the aforesaid amount
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M/s Umaxe Projects (P) Ltd.
of Rs. 2,79,01,096/-. The assessee has sought stay of demand on the following
grounds.
application-
"Stay application-
The appellant is a small contractor undertaking the contract for
Government and for private clients. The appellant couldn't pay the
statutory liability of TDS, therefore Ld. AO has disallowed the 100%
expenditure u/s 40(a)(ia), concurred by the Ld. CIT(A). The appellant
couldn't meet the statutory obligation as their Bank A/c was seized and it
was become NPA. Later on the contractee i.e clients of the appellant,
threatened to terminate the contract, which forced the appellant to look
for the new partner who can infused the capital and managed the
business. After the new partner came in, the appellant have started
disposing off the statutory liability. Further all the contracts undertaken at
that time are delayed, and has overrunning of cost and thereby marginal
profitability and liquidity crunch.
Now the appellant has requested for the stay of the demand. The
appellant submission is based on the following grounds namely -
a. Prima facie case
b. Financial hardship
c. Pendency of Appeal
d. Balance of convenience
a. Prima Facie case in favour of assessee - The appellant submits that it has
a prima facie case in its favour. Ld. AO has disallowed 100% of the
expenditure amounting to Rs.6,54,79,350 u/s 40(a)(ia) on account of
non-payment of TDS. In this regard, it submits that the amendment
brought by Finance (No.2) Act, 2014, are squarely covers the case of the
appellant, accordingly appellant is eligible to get the benefit of said
amendment as it was meant for mitigate the genuine hardship to the
payer and therefore only 30% of such expenditure should be disallowed.
Further the Ld. AO has disallowed the amount of Rs.10,63,956 on account
of Armed Forced Housing National Board(AFNHB) and Rs.6,12,276 on
account of Bharat Heavy Electrical Limited (BHEL) due to Non-deduction
of TDS. The appellants hereby submits that the AFNHB is a society covers
by the CBDT circular No.04/2002 further by another CBDT circular No.
18/2018 and as per that circular income of AFNHB is not taxable hence
liability of deducting TDS needn't arise. Further in the case of BHEL which
is a Public sector undertaking of Govt, of India, the whole income is
taxable as per the act. The appellant being a small contractor is unable to
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SA No.- 41/Del/2019.
M/s Umaxe Projects (P) Ltd.
get the details in prescribed form, however the appellant has requested
during the assessment and appellate proceedings to inquire the same by
the Revenue authority itself which was not done. Therefore, the addition
is liable to be deleted.
b. Financial hardship - The appellant has submits that it will be difficult for
the appellant to pay the demand even when the TDS credit is already
lying with the revenue authority of more than Rs.1,23,97,591 which is
more than 20% of the disputed demand. Further the appellant being a
small contractor has limited liquidity and any forceful payment at this
stage will cause irreparable damage to the appellant & make it difficult to
fulfill its statutory as well as contractual obligation in nearest future.
c. - The appellant has filed the appeal against the
appeal-
Pendency of appeal
impugned order and has challenged the addition made by Ld.AO,
thereafter concurred by Ld. CIT(A). The appeal has been filed on
11.01.2019 i.e. well within the limitation period. Therefore, till the
finalization of quantum appeal, we humbly request you to grant the stay
of the recovery proceedings.
d. Balance of convenience - Considering the above submission and fact and
documents submitted before your honor, the appellant understand that
balance of convenience is in his favour and demand of tax at this stage
will not be just and equitable."
(2) The stay application first came up for hearing on 01.03.2019. In the course of
hearing on that day, the Bench issued directions. Relevant portion of the order sheet is
reproduced as under:
"The applicant-assessee seeks for stay of outstanding demand of
Rs.2.79 crores mostly arising out of disallowance made u/s. 40(a)(ia).
The Ld. counsel informed that the assessee has filed a
rectification application u/s. 154 before the Assessing Officer, which is
most likely to reduce the demand by Rs.1.70 crores. Accordingly, he
requested that the Id. Assessing Officer may be directed to expedite
rectification application.
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M/s Umaxe Projects (P) Ltd.
The Ld. DR requested that the assessee should cooperate with
the Assessing Officer in these matters. Accordingly, we are listing the
stay application for 05.04.2019 and in the meantime, the Assessing
Officer is directed to carry out necessary rectification and the assessee
shall cooperate with the Assessing Officer in this regard. Parties be
informed accordingly."
(3) At the time of hearing before us on 01.07.2019, the Ld. Counsel for assessee
intimated that the AO was yet to pass the rectification order U/s 154 of Income Tax Act,
1961 ("IT Act", for short) which was directed by Income Tax Appellate Tribunal ("ITAT",
for short) on 01.03.2019. He submitted that the delay on the part of the AO has led to
consequential delay in disposal of this stay application by ITAT, thus causing prejudice
to the assessee. He further made an alternate prayer that an early hearing be granted
for the assessee's related appeal vide ITA No.- 206/Del/2019. He submitted that the
assessee will be satisfied, if the alternate prayer for early hearing is granted, in which
case the assessee would be willing to withdraw this stay application. The Ld.
Departmental Representative ("DR", for short) could not explain the reasons for delay
on the part of the AO in carrying out the rectification directed by ITAT vide aforesaid
order sheet dated 01.03.2019. Although the Ld. DR opposed the main prayer of the
assessee for grant of stay of demand, he did not oppose the alternate prayer of
assessee for grant of early hearing. Accordingly, the Ld. Counsel for assessee withdrew
the stay application and pressed for grant of the alternate prayer of early hearing.
(3.1) In view of these facts and circumstances; and foregoing discussion in paragraphs
(1), (2) and (3) of this order, we grant Early Hearing for the assessee's connected
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M/s Umaxe Projects (P) Ltd.
appeal vide ITA No. 206/Del/2019. The Registry is directed to fix the aforesaid appeal
for hearing on 08.08.2019 accordingly. As the assessee's stay application has been
withdrawn, the same is dismissed as withdrawn.
(4) The Order was pronounced orally in open court immediately after conclusion of
hearing on 01.07.2019. Now this written order is pronounced in the open court
on 04.07.2019.
Sd/- Sd/-
(KULDIP SINGH) (ANADEE NATH MISSHRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 04.07.2019
Pooja/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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M/s Umaxe Projects (P) Ltd.
Date of dictation
Date on which the typed draft is placed before the
dictating Member
Date on which the typed draft is placed before the Other
Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr.
PS/PS
Date on which the final order is uploaded on the website
of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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