Manish Govind Dangi, Udiapur V. ACIT, Circle (Intl.Tax), Jaipur

ITA 118/JPR/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6192 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 28-03-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence; Corroborative evidences; Scheme of amalgamation; TDS; Set aside
• Section: 201(1); 250; 201; 208; 13

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’SMC’ JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 118/JP/2022 fu/kZkj.k o"kZ@Assessment Year :2014-15 Manish Govind Dangi Dr. Nandu Dangi Nursing Home, Udaipur Road, Salumber- Rajasthan cuke Vs. CIT(A), Delhi-42/ Circle- (Int. Tax.), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADKPD 3947 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Mukesh Soni (CA) Sh. Rohan Mittal (Adv.) jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 12/07/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/08/2022 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. This appeal is filed by the assessee aggrieved from the order of the Commissioner of Income Tax (Appeal)-42, Delhi [ Here in after referred as Ld. CIT(A) ] for the assessment year 2014-15 dated 01.02.2022 which in turn arises from the order passed by the DCIT, Circle- International Taxation passed under Section 201 of the Income tax Act, 1961 (in short 'the Act') dated 31.03.2021. ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 2 2. The assessee has taken following grounds in this appeal; “The appellant being aggrieved on the order by Hon'ble CIT (A) -42, Delhi (National Faceless Assessment Centre) u/s 250 for the Assessment Year 2014-15 submits this appeal on the following grounds. 1. The Ld. CIT (A) has erred on law and facts by upholding the order of the Hon. AO and holding that the Appellant was liable to deduct tax u/s 1941A in respect of property purchased by him. The Id.CIT(A) has failed to appreciate that the consideration discharged after the introduction of the said section i.e. after 1/6/2013 was below the threshold limit prescribed under the said law and hence provisions of Section 1941A could not apply in the present matter. The order of the Hon CIT(A) in the matter is against the prevailing judicial decisions on the matter and the facts of the case. 2. Without prejudice to the above grounds, the Ld. CIT (A) has further failed to appreciate the fact that even if Section 1941A was held as applicable, the Appellant would still not be an Assessee in default in view of the first proviso to Section 201(1). The Appellant had submitted sufficient documents, in support of compliance of the said proviso. The Id. CIT(A) has failed to appreciate the documents produced and erred in dismissing the said ground. 3. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 3. The fact as culled out from the records is that the assessee has purchased an immovable property during F.Y 2013-14 for Rs. 1,30,00,000/- but no TDS was made on payment given to the seller of the property. The impugned transaction attracts liability for deduction of tax at source@ 1% u/s 194 IA of I.T. Act. As per the ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 3 provision of section 194IA of the Income Tax Act it is mandatory to deduct tax at source ordinarily @1% of the sale consideration paid. In fact, the assessee has booked that property in F. Y. 2011-12 and placed the submission before the AO and has also placed on record the form no. 26A in the proceeding before the AO passing the order for levy of alleged TDS default by the assessee. Based on that fact the ld. AO passed the assessment order u/s. 201 / 201(1A) of the Income Tax Act, 1961 and raised the demand of Rs. 2,39,200/- by alleging that TDS has not been deducted by the assessee u/s. 194IA of the Act at the time of purchase of immovable property, alleging that property was purchased during the year under consideration and has not considered the submissions made by the assessee. Aggrieved from the said order of the AO, assessee preferred an appeal before the ld. CIT(A)-42, Delhi. 4. In the proceeding before the ld. CIT(A)-42, the ld. CIT(A) dealt the issues raised before him the relevant findings is extracted here in below: ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 4 ‘’8. The appellant has claimed that he had made payments of Rs. 90,00,000/- before 01.06.2013 and balance Rs. 40,00,000/- after 01.06.2013 in respect of the purchase of the immovable property. It is contended that the provisions of section 1941A came into effect from 01.07.2013 and the provisions of Section 1941A are applicable only when the consideration to be paid for the property was more than Rs. 50 lacs. It is submitted that the consideration paid after 01.06.2013 was Rs 40,00,000/-i.e. below the threshold limit of Rs. 50,00,000/-. It is claimed that the provision of Section 1941A do not apply in this case as the liability to deduct tax would arise in case of payment of consideration after 01.06.2013 and only in the event that such consideration paid is above Rs. 50,00,000/ The appellant contended that he had paid Rs. 90,00,000/- prior to 01.06.2013, when the provisions of Section 1941A did not exist on the statute. Hence, for the purpose of Section 1941A, it would not tantamount to consideration. Post introduction of the said. section, the appellant had paid only Rs: 40,00,000/-, which is below the prescribed threshold limit and hence, no TDS liability would arise. 8.1 It is observed that the provisions for TDS on the payment for purchase of immovable property as prescribed under section 194-1A has been introduced under the Act with effect from 01.06.2013 only. Accordingly, a transferee responsible for paying who were transfer any sum by way of consideration for transfer of any immovable property shall, at the time of credit of such sum to the account of the transferee or at the time of payment of such sum in cash or by cheque / draft, whichever is earlier, is liable for deduction of 1% of consideration as income tax. As per sub-section (2), no deduction under sub-section (1) shall be made where the consideration for the transfer of the immovable property is less than Rs. 50,00,000/ 8.2 In view of clear provision of law, it is observed that the provision of section 194-IA will be applicable where the consideration for transfer of the immovable property is more than Rs. 50,00,000/-. Undisputedly, in this case, the consideration is Rs. 1,30,00,000/-. The twisted interpretation forwarded by the appellant that the payments made after 01.06.2013 should be treated as consideration is contrary to the unambiguous provision of law. Therefore, the provisions of section 194- IA are clearly applicable in respect of this transaction. 8.3 The appellant has claimed that the payments aggregating to Rs. 90,00,000/- were made before 01.06.2013 and therefore, are outside the purview of section It is observed that the appellant has not submitted any evidence in support of this claim. Therefore, vide notice u/s 250 of the Act issued and served electronically on 04.01.2022. the appellant was asked to submit by 12.01.2022, the copy of purchase deed and the evidence in support of the dates of payment. However, the appellant has not submitted any such detail. It was made clear that if no submission / ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 5 information / document are received within the stipulated time, it will be presumed that the appellant had nothing to say in the matter. As the claim of payments before 01.06.2013 of Rs. 90,00,000/- is not proven by way of any evidence, there is no reason to discard the conclusion arrived at by the AO that the appellant is in default in terms of first proviso in section 201(1) of the Act. 8.4 In ground no. 2, the appellant has claimed that it should not be deemed to be an assessee in default in terms of first proviso in section 201(1) of the Act. In respect of payment of Rs. 40,00,000/- made after 01.07.2013, the appellant has submitted form 26A issued by the Appellant along with original Annexure A issued by a Chartered Accountant certifying that due tax has been paid by the deductee in whose case the Assessee had not deducted tax. 8.4.1 It is observed that first proviso of section 201(1) is an exception carved out in the overall scheme of Tax Deduction at Source to mitigate the rigor of a strict provision of law. 8.4.2 Proviso to section 201(1) requires that such certificate is to be furnished in such form as may be prescribed. The relevant Rule 31ACB has been inserted in 2013. The Rule requires that such certificate shall be fumished in form 26A to the Director General of Income Tax (Systems) or the person authorized by him in accordance with the procedures, formats and standards as specified by the Director General of Income Tax (Systems). In pursuance of Rule 31ACB, a notification No. 11/2016 [F.No. DGIT(S)/CPC/TDS/Notification-2016-17], dated 02.12.2016 has been issued. The said notification requires this certificate to be filed with the Field Assessing Officer (TDS)' or the CPC-TDS. Further with effect from 15.01.2017 such certificate is to be furnished electronically. The purpose of fumishing certificate to A.O. (TDS) (or the CPC) is mentioned in the aforesaid notification itself i.e. the A.O. should ensure that interest on non-deduction or failure in payment shall be paid before furnishing the statement in accordance with the provisions of the Act. 8.4.3 It is not the case of appellant that it has already filed such certificate in form 26A with the A.O. TDS/CPC. Therefore, the furnishing of such certificate before the CIT (Appeals) will not be in accordance with law and cannot be accepted. 8.4.4 The appellant has referred to the first proviso to section 201(1) which states that "any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident-() has furnished his return of income under section 139, (i) has ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 6 taken into account such sum for computing income in such return of income; and (ii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed" 8.4.5 A careful reading of the section 201(1) shows that the appellant has very conveniently chosen to overlook another mandatory requirement of law which is laid down in sub-section (1A) to section 201(1) which is as follows: (1A) Without prejudice to the provisions of sub-section (1), if any such person principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest - (1) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before fumishing the statement in accordance with the provisions of sub-section (3) of section 200" Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso to sub-section (1), the interest under clause (1) shall be payable MENT from the date on which such tax was deductible to the date of furnishing of retum of income by such resident." 8.4.6 Accordingly, the appellant was required to pay interest @ 1% for every month or part thereof on the tax which he failed to deduct but still not deemed to be an assessee in default because of the first proviso to section 201(1) from the date on which such tax was deductible to the date furnishing return of income by the payee. The appellant has not given any evidence of making payment of any interest in order not to be treated as an assessee in default. Further not even any mention of any interest payment on this amount has been made in his submissions. It is therefore clear that the assessee has not made payment of mandatory interest as required by the proviso to section 201(1A). Consequently, as mandatory requirement of law have not been fulfilled, the appellant cannot deemed to be an assessee not in default under the ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 7 first proviso to sub-section 1 of section 201. Consequently, the appellant remains to be an assessee in default. 8.4.7 The argument of the appellant is not acceptable as the same would frustrate the overall scheme of Tax Deduction at Source and would make the same infructuous. A relaxation from the rigors of TDS provisions may be allowed only when the assessee fulfills the mandatory requirement of law. In this case, as discussed above, the appellant has miserably failed to comply with the requirements of law. 8.5 The appellant has relied upon the CBDT Circular No. 13 of 2021 dated 30.06.2021. It is observed that the said Circular has been issued u/s 1940 and deals with TDS on purchase of goods. The Circular is not applicable to the present case. Similarly, the case laws relied upon are distinguishable on facts and are not applicable to the present case. 8.6 Thus, both grounds of appeal are dismissed. 5. As the assessee did not find favour from the ld. CIT(A) the appeal was preferred before us and the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted in below; “1. The Appellant is non-resident person, who purchased an immovable. property being booking right in flat bearing no. Bungalow No. 41 for total consideration of Rs. 1,30,00,000/-, out of which an amount of Rs. 11,00,000/- was paid on 06.01.2012 at the time of booking of property with Developer. Out of total consideration, Rs. 90,00,000/- was paid before 01.06.2013 and balance Rs. 40,00,000/- paid after the said date. 2. Further, the Ld. AO has passed the assessment order u/s 201/201(1A) of the Income tax Act, 1961 (for short the Act") and raised demand of Rs. 2,39,200/- by alleging that TDS has not been deducted by the Appellant. u/s 1941A of the Act at the time of purchase of immovable property. alleging that property was purchased during year consideration only, without appreciating that property was booked in FY 2011-12 also without appreciating the various submissions made on record including filing of Form No. 26A during assessment proceedings itself. ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 8 3. Aggrieved by Order of Ld. AO, Appellant has moved before CIT(A) against the order the Ld. AO. During appellate proceedings written submissions including supporting evidences were filed. However, Ld. CIT(A) issued further notice u/s 250 of the Act dated 04.01.2022 for submitting evidence in support of claim made by Appellant. However, the same notice was not properly served on the Appellant that is why Appellant could not able to make due compliances, which fact Ld. CIT(A) has taken adversely without allowing further opportunity of being heard. Thereby, it affirmed the order of Ld. AO vide order dated 01.02.2022 passed u/s 250 of the Act, against which this appeal is preferred before Hon'ble Bench 4. In the said order, the Ld. CIT(A) has alleged that Appellant tried to make twisted interpretation of the provision of the section 1941A of the Act and denied the submission made by Appellant after putting misinterpretation to the provisions of Section 1941A of the Act as well as Section 2011) of the Act. The, Ld. CIT(A) also not appreciated the factual positions and only on the basis of suspicion and doubt, rejected the claim of the Appellant, that transaction was beyond the applicability of provisions of Section 1941A, which were inserted w.e.f. 01.06.2013 only and at the time of entering into transaction, the said Section was not applicable as the same was not in the text of the Act. 5. The Appellant vehemently objects impugned order passed u/s 250 of the Act which is not tenable on various grounds as mentioned in brief as follows: 5.1. Wrong interpretation of provision of section 1941A of the Act: 5.1.1. That the order passed u/s 250 of the Act dated 01.02.2022 was passed by Ld. CIT(A) under misinterpretation of the provision of the Section 1941A of the Act. As per provision of said section. Assessee is required to deduct tax at source at the time of credit of sum to the account of transferor or at the time of payment of such sum in any mode, whichever is earlier. In the case of Appellant, transaction was undertaken in FY 2011-12 and thereafter liability was discharged subsequently including registration of sale deed. Assessee by making the first payment on the on 16.01.2012 amounting Rs. 11,00,000/-, entered obligation to purchase the property from Developer for a total consideration of Rts. 1.30 Crore, out of which Rs. 40 Lakh was discharged after 01.06.2013 before sale deed could be executed in favour of Appellant. Thus, liability on Appellant to make payment of Rs. 1,30,00,000/- was created before 01.06.2013, when the provisions of Section 1941A was not applicable. Hence, it can be said that the sum is deemed to be credited in the account of transferor when liability was created on Appellant. Therefore, on this ground itself, it is evident that ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 9 there is no implication of the provisions of the Section 1941A of the Act on the Appellant transaction. 5.1.2. Without prejudice to above, it is also submitted that provision of Section 1941A of the Act were applicable from 01.06.2013 and at the time of booking the property in FY 2011-12, the Appellant could not be expected to forsee the future law as Appellant agreed on the sales consideration of Rs. 1,30,00,000/- before the said date and accordingly made payment of Rs. 90,00,000 before the date on which provision of Section 1941A were made applicable. Appellant cannot foresee the provision on the date on which total sales consideration decided. In other words, how Appellant will predict that what would be law in future. (Date wise details of the pa, ment is available on page no. 8 of the paper book). Appellant has agreed for total consideration of in FY 2011- 12 itself, which is established from Payment Schedule. Hence, present transaction is outside the scope of provision of Section 1941A for two reasons: A. Provisions are not applicable on past transactions prior to 01.06.2013 B. Even in respect of transaction pending as on 01.06.2013, the provisions would apply only when consideration paid/payable after 01.06.2013 is more than Rs. 50 Lakh for property being land or building and not interest or right in land or building 5.1.3. In the instance case, both the conditions are not fulfilled. Further, without prejudice to above, the liability to deduct tax at source arises when consideration for the transfer of the immovable property is Rs. 50 lakh or more. Appellant has already made payment of Rs. 90,00,000/- before applicability of Section 1941A and part payment of Rs. 40,00,000/- has been paid after the provision of Section 1941A came into force. Therefore, there is no liability on Appellant to deduct the tax at source as the Rs. 40,00,000/- which was part payment of consideration already decided prior to insertion of Section 1941A... 5.1.4. Appellant has submitted substantiating documents to Ld. AO as well as Ld. CIT(A) in the assessment proceedings. The details of date wise payment made by Appellant has not been disputed by Ld. AO as well as by Ld. CIT(A), only verification, of the same was initiated vide notice dated 04.01.2022 which Appellant could not respond for bonafide reasons. It is not the case, the Appellant has not discharged liability before 01.06.2013 and after 01.06.2013 as per Annexure A submitted during proceedings. 5.2. Appellant would not be treated as Assessee-in-default. ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 10 5.2.1. Without prejudice to above, it is submitted that as per first proviso of Section 201(1) of the Act, Assessee would not be treated as Assessee-in-default if he complies with conditions mentioned in first proviso. Accordingly. Appellant has furnished the certificate of Accountant in form 26A under the rule 31ACB where, Accountant certifies that the amount of said transaction was included in income of Payee and accordingly tax is deposited on the said amount. Therefore, Assessee would not be treated as Assessee-in-default. 5.2.2. Further, Ld. CIT(A), Delhi-42 has alleged that Form 26A has not been filed with A.O. TDS/CPC vide a notification no. 11/2016. In this regard, it is submitted that, Appellant has submitted the form 26A with La. AO vide letter dated 30.03.2021 during the assessment proceedings (page no. 13-16 of paper book), therefore, the contention of the Ld. CIT(A) is factually incorrect. Without prejudice to the above, it is also submitted that Ld. CIT(A) has concurrent power as that of Ld AO, therefore, mere for procedural defect, the substantial benefit granted in the law cannot be denied to the Appellant. Even otherwise, requirement to file Certificate in Form No. 26A is procedural requirement only, merely it is not filed electronically as per the version of Ld. CIT(A) does not disentitle the Appellant from the benefit granted under proviso to Section 201(1) of the Act. 5.2.3. Further Ld. CIT(A) has also given wrong finding and wrongly cileged vide para 8.4.6 of the impugned order dated 01.02.2022 that Appellant could not deemed to be an assessee in default because of the first proviso to Section 201(1) as Appellant has not made payment of 1% interest for every month or part thereof from the date on which such tax was deductible to the date of furnishing return of income by the payee. In this regard, Appellant has made payment of interest amounting Rs. 3,510/ vide challan serial no. 14301 dated 30.03.2021 and the same has been submitted before Ld. CIT(A) vide Annexure C of written submission (refer page no. 12 of paper book). Therefore, order of Ld. CIT(A) deserves to be not accepted for wrong and incorrect findings of facts against the fact available on record. 5.3. In view of the above, it is summarily submitted that: 5.3.1. As the Appellant booked property in FY 2011-12 (which fact is not disputed) as the evident from first payment date on 06.01.2012 of Rs. 11,00,000/- made by Appellant and Section 1941A came into force from 01.06.2013. Accordingly, there is no implication of provision of Section 1941A of the Act as the law TDS provisions cannot be applied retrospectively. 5.3.2. Further adequate opportunity of being heard not provided to Appellant while passing the order u/s 250 of the Act, therefore, merely ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 11 on suspicion or doubt on the veracity of the transaction cannot be made ground for sustaining the addition. Assessee can submit verification again if required. In view of the fact and circumstance of the present case the Assessee respectfully prays before Hon'ble ITAT for appropriate direction to delete the impugned addition of Rs. 2,39,200/- upheld vide the order passed u/s 250 of the Act and accordingly allow consequential relief including any other relief, which may be deemed fit.” 6. The ld. AR of the assessee has also moved a petition for additional evidence before us as per the rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 (“Tribunal Rules”), and in that the assessee submitted as under:- “Respected Sir, 1. With reference to the aforementioned appeal, it is humbly submitted that Applicant is non-resident who agreed to purchase the immovable property bearing no. Bungalow no. 41 for the total consideration of Rs. 1,30,00,000/- in FY 2011-12. Out of total consideration, Rs. 90,00,000/- was paid before the 01.06.2013, the date on which provisions of Section 194IA of the Act came into force. It is fact on record that booking of property by Applicant with developer was done in the FY 2011-12 as booking amount of Rs. 11,00,000 was paid on 16.01.2012. 2. The Ld. AO has passed the assessment order u/s 201/201(1A) of the Income tax Act, 1961 (for short " the Act") and raised demand of Rs. 2,39,200/- by alleging that TDS has not been deducted by the Applicant u/s 194-IA of the Act at the time of purchase of immovable property, alleging that property was purchased during year consideration only, without appreciating that property was booked in FY 2011-12 and an amount of Rs. 90 Lakh was already paid before 01.06.2013. The Ld. AO without appreciating the various submissions made on record including filing of Form No. 26A during assessment proceedings itself, made order u/s 201/201(1A) of the Act raising impugned demand of Rs. 2,39,200/-. 3. Aggrieved by Order of Ld. AO, Applicant preferred appeal before Ld. CIT(A). During appellate proceedings written submissions including supporting evidences were filed. However, Ld. CIT(A), Delhi-42 issued ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 12 further notice of hearing u/s 250 of the Act dated 04.01.2022 for submitting some supplementary evidence in support of claim and facts placed on record by Applicant. However, those evidences could not be submitted as the notice issued by Ld. CIT(A) was not properly served on the Applicant and was later accessed on registered portal/email ID of the Applicant after receipt of the Impugned Order passed by Ld. CIT(A). Accordingly, Applicant could not make compliances, which fact Ld. CIT(A) has taken adversely in Impugned Order without allowing further opportunity of being heard. Thereby, Ld. CIT(A) affirmed the order of Ld. AO vide order dated 01.02.2022 passed u/s 250 of the Act, against which present appeal is pending before Hon’ble Bench. 4. Therefore, Applicant is submitting this application for admission of additional evidence namely 'copy of purchase deed' and 'copy of receipt for booking' under the rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 which are vital to adjudicate the case on merits, though necessary evidence and facts already forms part of the record. is necessary to pass order. The said documentary evidences are relevant for adjudication of ground no 1 and 2 of appeal memo filed by the Applicant. It is because non-availability of these documents before the Ld. CIT(A), the Ld. CIT(A) has taken adverse view against the Applicant on the very vital fact, which has bearing upon adjudication of present appeal also. 5. It is also humbly submitted that different A/R took the proceedings before the Ld. CIT(A) and we have been recently appointed and accordingly, there is change in A/R of the Assessee. Therefore, it is likely that non-compliance of notice u/s 250 of the Act dated 04.01.2022 was bonafide for the reasons mentioned herein above. 6. Therefore, there is sufficient cause which prevented Applicant to produce the copy of purchase deed and copy of receipts of booking issued by developer which Ld. CIT(A), Delhi-42 required vide letter dated 04.01.2022. However, the same could not be submitted before the Ld. CIT(A), Delhi-42 due to reasons as mentioned herein above. Ld. CIT(A) has not issued any further notice to Applicant after notice dated 04.01.2022, rather directly order u/s 250 of the Act has been passed on 01.02.2022 without providing adequate opportunity. Applicant got surprised after reading the Ld. CIT(A) order that a notice dated 04.01.2022 has been issued on Applicant. It was only after reading the order of Ld. CIT(A), it came to the notice of the Applicant that the Ld. CIT(A) has taken adverse view for absence of supplementary/supporting documents asked vide notice dated 04.01.2022. Therefore, in order to clarify the position and further supplement the facts already on record, the Applicant is adducing this ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 13 evidence to counter the allegation/findings of Ld. CIT(A), Delhi-42, recorded for insufficiency of documentary evidence, in the interest of justice and equity. These documentary evidences are also vital and have material bearing for adjudication of grounds of appeal on merit also and only supplement the facts already placed on record. 7. In view of the above, it is hereby prayed that the aforesaid document may kindly be admitted as additional evidence under the Rule 29 of the Income Tax (Appellate Tribunal), 1963 in the interest of substantial justice. In the absence of consideration of this evidence, correct factual position is not likely to be appreciated and consequently substantial injustice is likely to take place against the Applicant. 8. In support to above contention, reliance has been placed on the following various judgment by various Hon’ble Courts: CIT v. Text Hundred India (P.) Ltd. [2011] 351 ITR 57 (Delhi) In view of several decisions, a discretion lies with the Tribunal to admit additional evidence in the interest of justice, once the Tribunal affirms opinion that doing so would be necessary for proper adjudication of the matter and this can be done even when application is filed by one of parties to appeal and it need not to be a suo motu action of the Tribunal. The aforesaid rule is made for enabling the Tribunal to admit the additional evidence in its discretion, if the Tribunal holds the view that such an additional evidence would be necessary to do substantial justice in the matter. It is well-settled that the procedure is handmade for justice and should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that said evidence would have material bearing on the issue which needed to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect. HL Malhotra & Co. v DCIT, Circle 12(1), New Delhi [2021] 125 taxmann.com 70 (Delhi) ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 14 This Court is further of the opinion that as the Applicant had admittedly filed an application for admission of additional evidence in terms of rule 29 of the ITAT Rules prior to the date of final hearing, it was incumbent upon the Tribunal to consider the said application before proceeding ahead with the final hearing. The Supreme Court in the case of Jyotsna Suri (supra) set aside the order of the High Court and remanded the matter back to the file of the Tribunal to decide the application under rule 29 of ITAT Rules and thereafter to dispose of the appeal on merits. The relevant observations of the Apex Court are reproduced hereinbelow:— "The Tribunal has disposed of the appeal by its order of 3rd Jan., 1997, without considering the pending application under Rule 29 of the ITAT Rules, 1963, for adducing additional evidence. Obviously, that application was required to be disposed of first before the Tribunal heard the appeal on merits. The Applicant also undertakes to withdraw the pending application before the Tribunal for making a reference under Section 256(1) of the IT Act for the above purpose. In view thereof, we direct that the Tribunal should first dispose of the application under Rule 29 on merits and thereafter proceed to dispose of the appeal on merits. The order dated 3-1-1997, is, therefore, set aside and the matter is remitted to the Tribunal for disposal on merit in accordance with law. The order of the High Court is set aside as above and the appeal is disposed of accordingly. For the aforesaid reasons, the present appeal is allowed and the order of the Tribunal dated 28th February, 2019 is set aside; the appeal of the Applicant is restored to the file of the Tribunal for de novo hearing in accordance with the judgment of the Supreme Court in Jyotsna Suri (supra). Linde Global Support Services (P.) Ltd. v. DCIT, Circle 12(1), Kolkata [2020] 117 taxmann.com 250 (Kolkata- Trib.) We note that aim of the transfer pricing law is to determine the correct arm`s length price of the assessee`s transactions with its associated enterprises(AE). For the sake of argument, let say, if ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 15 these additional evidences were not admitted by us, then it would have not been possible to determine the correct transfer pricing adjustments (ALP-adjustments) and as a result there will not be correct determination of tax liability of the assessee company. Therefore, we have to admit these additional evidences. In the light of the facts and circumstances, as explained above, and in the interest of justice and fair play, we admit these additional evidences (relating to working capital adjustments) filed before us and we remit these additional evidences to the file of ld TPO with the direction to examine these additional evidences and adjudicate the issue in accordance with law. For statistical purposes, the ground raised by the assessee is allowed. Kansai Nerolac Paints Ltd. v. DCIT [2014] 49 taxmann.com 208 (Bombay) The Tribunal should have answered the legal issue itself. The Tribunal was not prevented in any manner and in law from considering a purely legal issue for the first time, moreso, if this legal issue goes to the root of the matter. The issue was an impact and legal effect of an order of amalgamation and winding up of the assessee on the penalty proceedings which have been initiated and were continuing. If they were initiated prior to the order of the winding up passed or the scheme of amalgamation being sanctioned, then whether the subsequent act of an order sanctioning the scheme would permit continuation of the proceedings against an entity or company which is wound up and in terms of the provisions contained in the Income-tax Act, 1961, was, thus, a clear legal issue. It should have been answered by the Tribunal, particularly when it had admitted the question or ground and also the additional evidence filed by the assessee. The only two documents which required to be looked into were the scheme of amalgamation and the order passed in pursuance thereof by the Court. If that was the admitted factual position based on which the legal issue was raised, then the Tribunal was obliged to answer the legal question. Its omission to answer it, therefore, is vitiated in law. The Tribunal is a last fact finding court and equally if it could have been approached by the assessee as Court on law and fact, then, in the given circumstances, the Tribunal should have answered this issue and its failure to do so can safely be termed as not performing its duty in law. The direction to remit and to remand issue to the Assessing Officer is not justified in the peculiar facts and ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 16 circumstances. [Para 7] As a result, order of the Tribunal is set aside and the appeal is restored to the file of the Tribunal for purpose of deciding the legal issue. [Para 8] 9. Therefore, in view of above, it is requested to kindly accept captioned evidence u/r 29 of the Income Tax (Appellate Tribunal), 1963 and grant justice to Applicant. In any case, an opportunity of hearing be provided before rejecting the additional evidence submitted herewith.” 7. As regards the furnishing of the form 26A by the assessee the ld. AR of the assessee submitted before us the copy of the notification no. 11/2016 [F.No. DGIT(S) /CPC (TDS)/ NOTIFICATION / 2016-17], DATED 2-12-2016 as regards the contention that the why the same is not filed electronically online. The said notification reads as under:- “1. As per first proviso sub-section (1) of section 201 of Income-tax Act, 1961, any person including the principal officer of a company company, who fails to deduct the whole or any pan of the tax in accordance with the provisions of Chapter XVII-B on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- (i) has furnished his return of income under section 13; (ii) has taken into account such sum for computing income in such return of income, and (iii) has paid the tax due on the income declared by him in such return of income. and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed. ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 17 2. As per sub-rule (1) of Rule 31ACB of Income-tax Rules, 1962, the certificate from an accountant under the first proviso to sub-section (1) of section 201 shall be furnished in Form 26A to the Principal Director General of Income-tax (System) or the person authorised by the Director General of Income-tax (Systems) in accordance with the procedures, formats and standards specified under sub-mile (2), and verified in accordance with the procedures, formats and standards specified under sub-rule (2) 3. In exercise of the powers delegated by the Central Board of Direct Taxes (Board) under sub-rule (2) of Rule 31ACD of Income-tax Rules, 1962 the Principal Director General of Income-tax Systems) hereby authorizes the persons mentioned at Col. No. I to receive the form-type mentioned in Col. No, 2 to be filed in the mode specified at Col No. 3 for the assessment years mentioned at Col No. 4 and pertinent to defaults under sections of the Act mentioned at Col No. 5: 1 2 3 4 5 Authorized A.O Form Type Mode of furnishing Form A.Y To be used exclusively for defaults under section Field Assessing Officer (TDS)[1] 26A Paper Up to & including 2016- 17 201(1A) and/or 40(a)(ia) CPC-TDS 26A Electronic 12[2] Up to & including 2016- 17 200A CPC-TDS 26A Electronic 12[2] Including & form 2017-18 200A; 201(1) and/or 40(a)(ia) [1] The AO should ensure that interest on non-deduction of the whole or any part of the tax or failure in payment after deduction as required by or under this Act shall be paid before furnishing the statement in accordance with the provisions of the Act [2] Furnishing of Form 26A in electronic shall be enabled with effect from 15-1-2017.” 8. In addition to the above written submission the ld. AR appearing on behalf of the assessee submitted that the section is applicable for the first time. Based on the stated fact the assessee ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 18 is not subjected to the provision of section 194IA which is recently introduced. As the assessee could not submit the details of the payment made in earlier year they have placed on record the additional evidence and ld. AO based on the submission of the assessee has not asked for the additional evidence and therefore, interest of justice assessee requested to consider these additional evidence. 9. The ld. DR is heard who has relied on the findings of the lower authorities. He further stated that the assessee has also not produced these additional evidences before ld. CIT(A) and therefore, the same is required to be tested and therefore, requested to restore the matter with the file of the lower authority to verify the veracity of the contentions raised. 10. We have heard the rival contentions and perused the material placed on record and the decisions relied upon. We have persuaded the overall facts of the assessee the contention of the assessee that considering the facts of the case the assessee is not liable to deduct the TDS but he has not submitted the required ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 19 documents before the lower authorities to substantiate his case. Therefore, the assessee moved a petition to allow the evidence to be placed on record to prove the contention raised before us. We have gone through the contentions raised before us we are of the considered view that the based on the reasoning submitted by the assessee the assessee has sufficient cause which has prevented the assessee to produce the required documents. It is in the interest of justice to admit those additional evidence in this matter but as the same has not been placed before both the lower authorities, we admit this additional evidence and resort the issue before the assessing officer with a direction to the assessing officer to consider these additional evidences and consider the merits of the case based on the facts presented by the assessee. At the same time assessee is directed to place all those records important to decide the issue on hand is to be placed before the assessing officer within 60 days from the receipt of the order and at the same time the assessing officer is directed to decide the issue after observing the principles of natural justice. ITA No. 118/JP/2022 Manish Govind Dangi vs. CIT(A), Delhi-42 20 11. In terms of these observations the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 17/08/2022. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@ Jaipur fnukad@Dated:- 17/08/2022 *Ganesh Kr. vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Manish Govind Dangi, Salumber 2. izR;FkhZ@ The Respondent- CIT (A), Delhi-42, Circle- (Int. Tax.) Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {ITA No. 118/JP/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar