Gayatri Devi , Kondli V. ITO Ward-60(4), Delhi

ITA 1222/DEL/2022

AI Insights

The case involves an appeal by Gayatri Devi against the order of the Commissioner of Income-tax (Appeals), which sustained the addition of Rs. 40,51,650 to the assessee's income for the assessment year 2016-17. The addition was made on the grounds that the assessee failed to deduct TDS on commission payments exceeding the threshold limit. The Tribunal found that the Assessing Officer did not verify the facts adequately and restored the issue to the Assessing Officer for a detailed examination of whether the payments were within the threshold limit for TDS deduction.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112758 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2022
• Assessment Year: misc
• Appeal Filed On: 26-08-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Condonation of delay; TDS
• Section: 142(1)

Judgement Text

1 ITA no. 1222/Del/2022 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 1222/DEL/2022 Assessment Year: 2016-17 Gayatri Devi, E-51, Harijan Basti, Kondli, Delhi-110096. PAN- AKUPD1380J Vs Income-tax Officer, Ward-60(4), New Delhi APPELLANT RESPONDENT Assessee represented by Shri Shashi Shekhar Rai CA Department represented by: Shri Sumesh Swani, Sr. DR Date of hearing 08.12.2022 Date of pronouncement 15.12.2022 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 22.10.2021, pertaining to the assessment year 2016-17. The assessee has raised following ground of appeal: “1. That the appellant denied its liability to be assessed at Rs. 46,58,820/- as against the returned income of Rs. 6,07,170/-. 2 ITA no. 1222/Del/2022 2. That Ld. CIT(A) failed to follow the principle of natural justice before dismissing the appeal. 3. That having regard to the facts and circumstances of the case Ld. CIT(A) erred in law and facts by dismissing the appeal by not allowing the commission expenses paid of Rs. 40,51,650/-. 4. That appellant craves the right to add, modify, amend or delete any of the ground of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. The effective ground in this appeal is against sustaining the addition of Rs. 40,51,650/-. 3. The present appeal is barred by time. An application seeking condonation of delay has been filed. The reason stated for condonation of delay is that the assessee filed appeal on 22.11.2021 against the order dated 22.10.2021. The order was received on 23.10.2021. Learned DR opposed the submissions. However, looking to the fact that there was Covid-19 period, delay in filing the appeal is condoned and the appeal is taken up for hearing. 4. Facts giving rise to the present appeal are that in this case the assessee its return of income on 21.09.2016 at an income of Rs. 6,07,170/-. Thereafter, the case was taken up for scrutiny under CASS. The Assessing Officer issued statutory notice u/s 142(1) of the Income-tax Act, 1961 (in short “the Act”). In response thereto the Authorized Representative of the assessee attended the proceedings. While framing the assessment, the Assessing Officer observed that the assessee had paid commission to the extent of Rs. 42,80,650/-. The assessee had also paid 3 ITA no. 1222/Del/2022 commission amounting to Rs. 2,29,000/- on which TDS was deducted. The Assessing officer was of the view that the assessee ought to have deducted tax on the entire payment. Hence he made addition of R. 40,51,650/-. Aggrieved against this, the assessee preferred appeal before the learned CIT(Appeals) who after considering the submissions sustained the addition. Now the assessee is in appeal before this Tribunal. 5. Learned counsel for the assessee submitted that the assessee is engaged in the business of sale of topup/coupon/recharge vouchers and used to get the talk time balance in mobile numbers. The assessee is lawful authorized dealer of topup/coupon/recharge vouchers of M/s Aircell Ltd., which is the telecommunication service provider. The assessee had purchased these topup/coupon/recharge vouchers from M/s Aircell Limited and also incurred commission expenses of Rs. 42,80,650/- during the year under consideration. It is stated that the assessee had deducted tax where the threshold limit increased. However, the Assessing Officer without verifying the facts made the addition. 6. On the contrary, learned DR opposed the submissions and supported the orders of the authorities below. 7. I have heard the Authorized Representatives of the parties and perused the material available on record. From the assessment order it is clear that the Assessing Officer has noted that it is not possible to verify from each party. In my 4 ITA no. 1222/Del/2022 view the law is clear that if any payment is made above the threshold limit then the TDS is required to be deducted. Therefore, considering the totality of facts the issue is restored to the file of the Assessing officer to verify whether the payment was made within the threshold limit or was in excess of the same. In the event it is found that the threshold limit was not crossed, the Assessing Officer would delete the disallowance. Grounds of appeal are allowed for statistical purposes. 8. Appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 15 th December, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI