ANUP NAYAK,RANIGANJ V. COMMISSIONER OF INCOME TAX (APPEALS), NFAC, DELHI

ITA 64/KOL/2024

AI Insights

The case involves Anup Nayak, who appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, which had dismissed his appeal due to non-prosecution. The original assessment added a sum of Rs. 12,00,600 to Nayak's income, which was paid as interest to various financers, on grounds of non-deduction of TDS under section 40(a)(ia) of the Income Tax Act. The Tribunal noted that the financers were regular assessees and some were listed companies, suggesting that the interest might have been reported in their taxable income. The Tribunal set aside the previous orders and remanded the case for a de novo assessment, allowing Nayak to present evidence that the TDS was effectively deducted and the interest income was reported by the financers.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470924 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D HEERAJ
• Keywords: Condonation of delay; Set aside; TDS
• Section: 143(3); 143(2); 133(6); 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No. 64/KOL/2024 (Assessment Year 2014-15) Anup Nayak, 161, P.N. Malia Road, Raniganj, West Bengal - 713325 (PAN: ADFPN8917M) Vs Commissioner of Income Tax (Appeals), NFAC, Delhi (Appellant) (Respondent) Present for: Appellant by : None Respondent by : Shri Dheeraj, Sr. DR Date of Hearing : 03.12.2024 Date of Pronouncement : 03.01.2025 O R D E R PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”], dated 21.07.2023 which has been passed against the assessment order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) dated 27.12.2016. 2. Although the registry has not pointed out any delay in the filing of the appeal, however, it is observed from the acknowledgement report of e- filing of appeal before the Tribunal that the order of the Ld. CIT(A) dated 21.07.2023 was received on 21.07.2023, while the appeal has been filed on 10.01.2024. Thus, there is a delay in filing the appeal. Along with appeal memo, the assessee has also filed an application seeking 2 ITA No. 64/Kol/2024 Anup Nayak, AY: 2014-15 condonation of delay as the advocate Shri Soumitra Sengupta was ill and the less was severe, which required him to undergo extensive medical treatment and rest and consequently he was unable to attend to his professional duties during the period of his illness from 15.07.2023 to 08.01.2024 and the delay in filing the appeal has been requested to be condoned. 2.1 We have considered the application for condonation of delay and since there was sufficient cause for the delay, therefore, the delay is condoned and appeal is admitted for adjudication. 3. Brief facts of the case are that the assessee is an individual, and had filed his return of income on 29.03.2015 declaring total income of Rs. 17,31,750. Subsequently, the case was selected under manual scrutiny. A notice u/s 143(2) of the Act issued on 16.09.2015, which was duly served upon the assessee on 19.09.2015. During the year under consideration the appellant was engaged in contractual business. The Ld. AO examined the case and found that a sum of Rs. 12,00,600/- was paid by the appellant to the Financers. He was asked to produce the details of TDS made on account of interest paid to Financers, on Lease rent for Land & Dumper Hire Charge Paid. During the course of hearing, the Ld.AR of the assessee was asked to produce the details of purchase along with bills and vouchers & Transporting Charges paid. In this context, the Ld. AR appeared and filed the statement of transportation charges along with few self-made vouchers. Further, the ld. Counsel for the assessee was asked to produce the details of TDS made on account of interest paid to Financers, Lease rent for Land & Dumber Hire Charges paid. The reply was received from the appellant but the Ld. A.O. was not satisfied with the same. Hence, a sum of Rs. 12,00,600/- was added to his total income. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 21.07.2023 dismissed the appeal on account of non-prosecution of the appeal. 3 ITA No. 64/Kol/2024 Anup Nayak, AY: 2014-15 2.1 Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 3. None appeared on behalf of the assessee and the appeal was heard with the assistance of the Ld. Sr. DR and the record and the submissions made have been examined. 4. In the appeal memo filed on Form No. 36, the assessee has filed combined grounds of appeal, and statement of facts, the gist of which is that no TDS was made on account of interest paid to M/s. L&T Finance Ltd., SREI Equipments Finance Ltd., ICICI Bank and Mahindra & Mahindra Financial Services Ltd., therefore, the interest paid was disallowed under section 40(a)(ia) of the Act. The assessee contends that during the course of assessment, the assessee stated that the interest paid by the appellant had been shown by the payees in their taxable income. As the payees stand on a higher status, therefore, the appellant asked the payees to confirm whether the amount of interest paid by the appellant was shown by the payees in their taxable income or not. As no response was received from the payees, the appellant requested the Ld. AO to issue notices under section 133(6) of the Act to the respective payees, but the Ld. AO added the above amount of interest payment along with the returned income of the assessee. The assessee, therefore, requested that it is a fit case for remand back to the Ld. AO by giving a specific instruction for examination of above interest payment by issue of notice to the respective payees. 5. We have gone through the records and the grounds of appeal and the facts of the case. The financers to whom the interest was paid by the assessee are apparently regular assessees and some of them are listed companies and, therefore, the possibility that the interest received from the assessee had been shown in their returns of income on which tax is been paid cannot be ruled out. The assessee failed to furnish any evidence 4 ITA No. 64/Kol/2024 Anup Nayak, AY: 2014-15 in support of the claim that the interest had been shown in their returns of income, the onus for which lay on the assessee. Even before the Ld. CIT(A), proper compliance could not be made. Therefore, in the interest of justice and fair play and since the assessee could not get the required evidence despite making efforts and as per the 2nd proviso of section 40(a)(ia), where an assessee fails to deduct the whole or any part of the tax on any such sum, but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the payees referred to in the said proviso. Since the matter needs verification and adequate opportunity to the assessee, therefore, the orders of the Ld. CIT(A) as well as of the Ld. AO are hereby set aside and the Ld. AO is directed to frame the assessment order de novo after the assessee furnishes necessary evidence for the relief claimed. The assessee shall not seek unnecessary adjournments and shall be at liberty to file all evidence before the Ld. AO. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 3rd January, 2025. Sd/- Sd/- (Sanjay Garg) (Rakesh Mishra) Judicial Member Accountant Member Dated: 3rd January, 2025 AK, PS 5 ITA No. 64/Kol/2024 Anup Nayak, AY: 2014-15 Copy to: 1. The Appellant: 2. The Respondent. 3. CIT(A) 4. The CIT, 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata 1. Date of Dictation………………………………………. 2. Date on which the typed order is placed before the dictating Member and other Member…………………………………………….. 3. Date on which the order came back to Sr. PS…………………………………… 4. Date on which the file goes to the Bench Clerk………………………………… 5. Date on which the file goes to the O.S………………………………… 6. Date on dispatch of the order……………………………………… "