Aditya Mohapatra, Dhenkanal V. Principal CIT-2, Bhubaneswar

ITA 155/CTK/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7149 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: DAMODAR PATI
• Keywords: Assessment record; TDS; Set aside; FORM 26AS
• Section: 142(1); 40(a)(ia); 201; 44AB; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 155 /CTK/20 1 6 ( / ASSESSMENT YEAR : 20 1 2 - 201 3 ) SRI ADITYA MOHAPATRA, PROP.: OR ISSA MOTORS, KUJAKANTA, MAIN ROAD, DHENKANAL. VS. PR. CIT - 2, BHUBANESWAR PAN NO. : A AACL 6593 N ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI DAMODAR PATI, ADVOCATE /REVENUE BY : SHRI M.K. GAUTAM , CIT DR / DATE OF HEARING : 26 / 0 8 /20 20 / DATE OF PRONOUNCEMENT : 07 / 0 9 /20 20 / O R D E R PER L.P.SAHU , A M : TH E ASSESSEE HAS FILED THIS APPEAL AGAINST THE REVISIONARY ORDER PASSED U/S.263 OF THE ACT BY THE PR.CIT - 2, BHUBANESWAR, DATED 21.03.2016 FOR THE A.Y.2012 - 2013 . 2. EARLIER THIS APPEAL WAS DISPOSED OFF BY THIS TRIBUNAL VIDE ORDER DATED 29.08.2017 . THEREAFTER THE ASSESSEE CHALLENGED THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE HIGH COURT VIDE ORDER DATED 21.03.2018 PASSED IN W.P.(C)NO.22608 OF 2017 SET ASIDE THE ORDER OF THE TRIBUNAL TO PASS FRESH ORDER DIRECTING THE ASSESSEE TO FILE THE DOCUMENTS AS HE WANTS. ACCORDINGLY, THE APPEAL OF THE ASSESSEE RESTORED TO I TS ORIGINAL NUMBER AND FINALLY HEARD WITH THE CONSENT OF BOTH THE PARTIES. ITA NO. 155 /CTK/201 6 2 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER : - 1. THAT THE ORDER PASSED BY THE LD. BELOW FORUM SUFFERS THE VICE OF ILLEGALITY AND ARBITRARINESS. 2. THAT TH E DISALLOWANCE OF RS.7,42,150/ - PAID TOWARDS INCENTIVE AND COMMISSION AND INCENTIVE FOR SIM U/S.40(A)(IA) OF I.T.ACT IS ILLEGAL AND ARBITRARY. 3. THAT THE OTHER GROUNDS IF ANY SHALL BE URGED IN THE TIME OF HEARING. 4 . SUBSEQUENTLY, THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS OF APPEAL VIDE LETTER DATED 06.03.2020, WHICH READ AS UNDER : - '(I) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER DTD.21.03.2016 PASSED U/S.263 OF THE IT ACT BY THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX - II, O DISHA IS ILLEGAL AND ARBITRARY. (II) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER DTD.21.03.2016 IS PERVERSE BECAUSE OF NON CONSIDERATION OF THE MATERIAL FACTS.' 5 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF WHOL E SALE DISTRIBUTION OF SIM CARD AND FILED THE RETURN OF INCOME ELECTRONICALLY ON 24.03.2014 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.6,04,803/ - . SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES U/S.143( 2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE ON 04.09.2014 . THEREAFTER THE AO COMPLETED THE ASSESSMENT BY MAKING FOLLOWING ADDITIONS : - TOTAL INCOME DISCLOSED BY THE ASSESSEE AS PER RETURN RS.6,04,803/ - ADD : 1. REPAIR AND MAINTENANCE EX PENSES RS. 12,974/ - 2. INCENTIVE TO STAFF RS. 16,340/ - 3. TRAVELLING EXPENSES RS. 14,081/ - 4. MISCELLANEOUS EXPENSES RS. 28,372/ - 5. PUJA EXPENSES RS. 11,165/ - TOTAL RS.6,87,735/ - OR ROUNDED OFF TO RS.6,87,740/ - ACCOR DINGLY, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.6,87,740/ - AND COMPLETED THE SCRUTINY ASSESSMENT. ITA NO. 155 /CTK/201 6 3 6 . LATER ON THE PR.CIT EXERCISING HIS JURISDICTION U/S.263 OF THE ACT, CALLED FOR THE ASSESSMENT RECORD AND OBSERVED THAT THE ASSESSEE SHOULD HAVE BEEN DEDUCTED TDS ON THE INCENTIVE, COMMISSION AND INCENTIVE FOR SIM CARDS TOTALLING TO RS.7,42,150/ - , HOWEVER, THE ASSESSEE HAS NOT DEDUCTED TDS U/S.194H OF THE ACT, THEREFORE, THE DISALLOWANCE OF EXPENSES OF RS.7,42,150/ - U/S.40(A)(IA) OF THE ACT S HOULD HAVE BEEN MADE BY THE AO. THE PR.CIT ALSO NOTED FROM THE LIST OF THE INCENTIVES FOR SIM CARD AND COMMISSION THAT THERE WAS A PAYMENT OF MORE THAN RS.5000/ - TO THE RECIPIENTS, WHICH COMES UNDER THE PROVISION OF SECTION 194H OF THE ACT FOR MAKING DEDUC TION BUT THE AO DID NOT EXAMINE THE ISSUE, THEREFORE, THE PR.CIT HELD THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, HE DIRECTED THE AO TO MAKE DE NOVO ASSESSMENT FOLLOWING THE DIRECTIONS AS GIVEN IN T HE REVISONAL ORDER. 7 . AGGRIEVED BY THE ORDER OF PR.CIT , THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL, WHEREIN THE TRIBUNAL VIDE ORDER DATED 29.08.2017 CONSIDERING THE SUBMISSIONS OF ASSESSEE AND FINDINGS OF THE LOWER AUTHORITIES, DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THEREIN THAT THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF INCENTIVE AND COMMISSION FOR SIM CARDS U/S.40(A)(IA) OF THE ACT, WHICH IS NOT A SUBJECT MATTER OF APPEAL BEFORE US AND IN THE GROUNDS OF APPEAL THE ITA NO. 155 /CTK/201 6 4 ASSESSEE HAS NOT CHALLE NGED THE ORDER PASSED U/S.263 OF THE ACT. THE OBSERVATION OF THE TRIBUNAL AT PAGE 3 IS AS UNDER : - 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, ON PERUSAL OF THE GROUNDS OF APPEAL AS SUBMITTED BY THE LD. DR, WE FOUND THAT THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF INCENTIVE AND COMMISSION FOR SIM CARDS UNDER 40(A)(IA) OF THE ACT, WHICH IS NOT A SUBJECT MATTER OF APPEAL BEFORE US AND THE GROUNDS OF APPEAL DOES NOT CHALLENGE THE ORDER PASSED U/S.263 OF THE ACT PASSE D BY THE CIT IS BAD IN LAW AND DOES NOT SATISFY TWIN CONDITIONS. THEREFORE, CONSIDERING THE FACTS AND THE FINDINGS AND THE SUBMISSIONS OF LD. DR, WE FOUND THAT THERE IS STRENGTH IN THE ARGUMENTS OF LD. DR THAT THE ASSESSEE HAS CHALLENGED THE ADDITION WHICH IS CONSEQUENTIAL TO THE ORDER PASSED U/S.263 OF THE ACT AND NOT ON THE MAIN ISSUE OF HOW THE REVISION PROCEEDINGS ARE BAD IN LAW. HENCE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD. CIT WHO HAS CONSIDERED THE FINDINGS OF AO AND SUBMISSIONS OF T HE ASSESSEE AND PASSED A SPEAKING ORDER IN ACCORDANCE WITH LAW AND ACCORDINGLY, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 8 . BEING AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE APPROACHED BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HON BLE HIGH COURT VIDE ORDER DATED 21.03.2018 IN W.P.(C) NO.22608 OF 2017 HAS SET ASIDE THE ORDER OF THE TRIBUNAL IN THE FOLLOWING MANNER : - W.P.(C) NO.22608 OF 2017 21.03.2018 HEARD MR. PATI, LEARNED COUNSEL FOR THE PETITIONER AND MR. SATPATHY, LEARNED SE NIOR STANDING COUNSEL FOR THE REVENUE. PURSUANT TO ORDER OF THIS COURT DATED 05.02.2018, MR. SATPATHY, LEARNED SENIOR STANDING COUNSEL HAS PRODUCED THE FILE OF THE TRIBUNAL FOR OUR PERUSAL. ON PERUSAL OF THE ORDER SHEET OF THE TRIBUNAL, IT APPEARS THAT T HE FIRST DATE FOR WHICH THE TRIBUNAL FIXED HEARING WAS 24.08.2017 VIDE NOTICE ISSUED ON 19.07.2017 AND FROM THE RECORDS, IT APPEARS THAT AN ADJOURNMENT APPLICATION WAS FILED BY THE APPELLANT'S COUNSEL ON THE SAID DATE I.E. ON 24.08.2017. ALTHOUGH THE ORIGI NAL ORDER SHEET MAINTAINED BY THE TRIBUNAL DOES NOT REFLECT ANY ORDER BEING PASSED THEREON HOWEVER IN THE BODY OF THE PETITION ITSELF, IT APPEARS THAT THE LEARNED MEMBERS OF THE TRIBUNAL HAVE ENDORSED THE TERM REJECTED ON THE BODY OF THE SAID APPLICATION. WE ALSO FIND FROM THE IMPUGNED ORDER UNDER ANNEXURE - 1 THAT THE TRIBUNAL TOOK NOTICE OF THE FACT THAT THE APPELLANT HAD SOUGHT FOR AN ITA NO. 155 /CTK/201 6 5 ADJOURNMENT BUT THE SAME WAS REJECTED AND THE MATTER WAS PROCEEDED ON MERIT. MR. PATI, LEARNED COUNSEL FOR THE PETITIONER PRAYS THAT DENIAL OF ADJOURNMENT THAT TO ON THE FIRST DATE TO WHICH THE CASE WAS LISTED AMOUNTED TO DENIAL OF AN OPPORTUNITY TO THE APPELLANT TO EFFECTIVELY PRESENT HIS CASE BEFORE THE TRIBUNAL AS HE WANTED TO PRODUCE SOME MORE DOCUMENTS. ON PERUSAL OF T HE RECORDS PRODUCED AS WELL AS THE ORDERS IMPUGNED HEREIN (ANNEXURE - 1), WE ARE OF THE CONSIDERED VIEW THAT ENDS OF JUSTICE WOULD BE BEST SERVED, IF THE ORDER OF THE APPELLATE TRIBUNAL IS SET ASIDE AND THE MATTER IS REMITTED BACK TO THE TRIBUN AL WITH A DIRECTION TO FIX A FRESH DATE OF HEARING. THIS COURT ORDERS ACCORDINGLY. THE PETITIONER UNDERTAKES NOT TO SEEK ANY FURTHER ADJOURNMENT AND TO ARGUE AND PROCEED WITH THE MATTER ON THE NEXT DATE ITSELF. NO ADJOURNMENT APPLICATION ON BEHALF OF THE P ETITIONER - APPELLANT SHALL BE ENTERTAINED. WITH SUCH OBSERVATION AND DIRECTION, THE WRIT APPLICATION IS ALLOWED TO THE EXTENT INDICATED HEREINABOVE. THE PETITIONER IS DIRECTED TO FILE A CERTIFIED COPY OF THIS ORDER BEFORE THE INCOME TAX APPELLATE TRIBUNAL FOR NECESSARY COMPLIANCE WITHIN A PERIOD OF TWO WEEKS FROM TODAY. IN THE MEANTIME, THE APPELLANT - PETITIONER IS GRANTED LIBERTY TO FILE NECESSARY DOCUMENTS HE SEEKS TO RELY UPON FOR THE PURPOSE OF THE APPEAL WITHIN THE AFORESAID PERIOD. THE ORIGINAL RECORDS ARE RETURNED TO MR. SATPATHY, LEARNED SENIOR STANDING COUNSEL FOR THE REVENUE FOR TRANSMISSION BACK TO THE TRIBUNAL. FREE COPY OF THIS ORDER BE HANDED OVER TO THE LEARNED COUNSEL FOR THE REVENUE FOR NECESSARY COMMUNICATION AND COMPLIANCE. URGENT CERTIFI ED COPY OF THIS ORDER BE GRANTED ON PROPER APPLICATION. 9. NOW, THE APPEAL IS BEING FI XED FOR FRESH HEARING BEFORE US AND THE LD. AR ARGUED ONLY ON THE LEGAL GROUNDS RAISED IN THE FORM OF ADDITIONAL GROUNDS FILED BY THE ASSESSEE VIDE LETTER DATED 06.03.20 20 AS ALREADY REPRODUCED ABOVE. 10. THE LD. AR SUBMITTED THAT THE INCENTIVE AND COMMISSION ON SIM CARDS DOES NOT COME UNDER THE PURVIEW OF THE TDS PROVISION U/S.194H OF THE ACT, WHICH IS NOT A COMMISSION AND THE SAME IS A DISCOUNT WHICH ARE GIVEN TO THE RE TAILERS IN THE ORDINARY COURSE OF BUSINESS AT THE TIME OF PURCHASE BY THEM AND DISCOUNT IS NEVER TREATED AS A COMMISSION. IT ITA NO. 155 /CTK/201 6 6 IS THE NOMENCLATURE WHICH HAS BEEN USED FOR DEBITING THE EXPENSES IN THE ACCOUNT BOOKS. HE ALSO SUBMITTED THAT THE BOOKS OF ACCOUNT S OF THE ASSESSEE WAS NOT AUDITED IN THE PRECEDING FINANCIAL YEAR I.E.F.Y.2010 - 2011. BEFORE US, LD. AR ALSO FILED COPY OF COMPUTATION OF INCOME AND COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN. IN SUPPORT OF HIS ARGUMENTS, HE RELIED ON THE FOLLOWING JUDGME NTS : - I) CIT VS. SINGAPORE AIRLINES LTD. [2009] 180 TAXMAN 128 (DELHI); II) AHMEDABAD STAMP VENDORS ASSOCIATION [2002] 124 TAXMAN 628 (GUJARAT); III) CIT VS. TENDON & MAHENDRA [2014] 45 TAXMANN.COM 183 (ALLAHABAD) : IV) QATAR AIRWAYS [2012] 20 TAXMANN.COM 598 (BOMBAY); AND V) CHIEF TREASURY OFFICER VS. UOI [2013] 37 TAXMANN.COM 391 (ALLAHABAD) 11 . ON THE OTHER HAND, LD. CIT DR SUBMITTED THAT THE ASSESSEE IS LIABLE FOR TDS ON PAYMENT MADE TO THE RETAILERS BECAUSE HE HAS PAID INCENTIVE AND COMMISSIONS AND I NCENTIVES ON SIM CARDS AND IT IS COVERED U/S.194H OF THE ACT AND THE PAYMENT WAS MADE BY HIM WAS MORE THAN RS.5000/ - TO 114 RETAILERS. THE AO DID NOT OBSERVE THIS MATTER WHILE FRAMING THE ASSESSMENT U/S.143(3) OF THE ACT, THEREFORE, THE PR.CIT HAS RIGHTLY EXERCISED HIS POWER U/S.263 OF THE ACT. IN SUPPORT OF HIS CONTENTIONS, LD. DR RELIED ON THE FOLLOWING CASE LAWS : - I) VODAFONE ESSAR CELLULAR LTD. [2010] 194 TAXMAN 518 (KERALA) II) IDEA CELLULAR LTD. [2010] 189 TAXMAN 118 (DELHI) 12 . AFTER HEARING BOTH T HE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE NOTICED THAT THE PR.CIT HAS EXERCISED HIS POWER U/S.263 OF THE ACT AND OBSERVED ITA NO. 155 /CTK/201 6 7 THAT THE ASSESSEE DID NOT DEDUCT TDS ON THE PAYMENT OF RS.7,42,150/ - M ADE TO THE RETAILERS DURING THE IMPUGNED ASSESSMENT YEAR U/S.194H OF THE ACT. THE AO HAD NOT DELIBERATED THIS ISSUE IN HIS ASSESSMENT ORDER. THE ASSESSEE HAS FILED BEFORE US THE COPY OF ACKNOWLEDGEMENT OF RETURN FOR THE ASSESSMENT YEAR 2011 - 2012 , COMPUTAT ION OF INCOME, AND COPY OF FORM 26AS . IT IS CLEAR FROM THE COMPUTATION OF INCOME FILED BY THE ASSESSEE THAT THE TURNOVER MADE BY HIM IS RS.53 , 99,620.43 FOR THE FINANCIAL YEAR 2010 - 2011. THE AR OF THE ASSESSEE HAD ALSO MADE SUBMISSIONS THAT THE BOOKS OF AC COUNTS OF THE ASSESSEE WAS NOT AUDITED IN THE PRECEDING FINANCIAL YEAR U/S.44AB OF THE ACT, 1961 . IN THIS REGARD, LD.AR DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 194H OF THE ACT WHEREIN THE CONDITIONS HAVE BEEN STIPULATED FOR DEDUCTING TDS. THE RELEV ANT PROVISIONS OF SECTION 194H OF THE ACT ARE AS UNDER : - COMMISSION OR BROKERAGE. 194H. ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING, ON OR AFTER THE 1ST DAY OF JUNE, 2001, TO A RESIDENT, ANY INCOME BY WAY OF COMMISSION (NOT BEING INSURANCE COMMISSION REFERRED TO IN SECTION 194D ) OR BROKERAGE, SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT OF SUCH INCOME IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME - TAX THEREON AT THE RATE OF FIVE PER CENT : PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION IN A CASE W HERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR TO THE ACCOUNT OF, OR TO, THE PAYEE, DOES NOT EXCEED FIFTEEN THOUSAND RUPEES : PR OVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE ( A ) OR CLAUSE ( B ) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH COMMISSION OR BROKERAGE IS CREDITED OR PAID, SHALL BE LIABLE TO DEDUCT INCOME - TAX UNDER THIS SEC TION: ITA NO. 155 /CTK/201 6 8 PROVIDED ALSO THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION ON ANY COMMISSION OR BROKERAGE PAYABLE BY BHARAT SANCHAR NIGAM LIMITED OR MAHANAGAR TELEPHONE NIGAM LIMITED TO THEIR PUBLIC CALL OFFICE FRANCHISEES. EXPLANATION. FOR THE PURPOSES OF THI S SECTION, ( I ) 'COMMISSION OR BROKERAGE' INCLUDES ANY PAYMENT RECEIVED OR RECEIVABLE, DIRECTLY OR INDIRECTLY, BY A PERSON ACTING ON BEHALF OF ANOTHER PERSON FOR SERVICES RENDERED (NOT BEING PROFESSIONAL SERVICES) OR FOR ANY SERVICES IN THE COURSE OF BUYI NG OR SELLING OF GOODS OR IN RELATION TO ANY TRANSACTION RELATING TO ANY ASSET, VALUABLE ARTICLE OR THING, NOT BEING SECURITIES; ( II ) THE EXPRESSION 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARRYING ON A LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSES OF SECTION 44AA ; ( III ) THE EXPRESSION 'SECURITIES' SHALL HAVE THE MEANING ASSIGNED TO IT IN CLAUSE ( H ) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) ; ( IV ) WHERE ANY INCOME IS CREDITED TO ANY ACCOU NT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SECTION SHALL APP LY ACCORDINGLY. FROM THE ABOVE SECTION IT IS CLEAR THAT IF THE BOOKS OF ACCOUNT WAS NOT AUDITED U/S.44AB OF THE ACT IN THE IMMEDIATELY PRECEDING FINANCIAL YEAR THEN THIS PROVISION WILL NOT APPLIED IN THE CURRENT FINANCIAL YEAR IN CASE OF INDIVIDUAL OR HUF . FROM THE COMPUTATION OF INCOME FILED BY THE ASSESSEE THE TURNOVER OF THE ASSESSEE IS BELOW RS.60 LAKHS WHICH WAS NOT REQUIRED TO BE AUDITED U/S.44AB OF THE ACT. THIS FACT HAS NOT BEEN EXAMINED BY ANY OF THE AUTHORITIES BELOW. THEREFORE, THE ASSESSEE HAS NOT FULFILLED THE FIRST CONDITION AND THEREFORE, HE IS OUT OF THE PURVIEW OF SECTION 194H OF THE ACT FOR MAKING DEDUCTION ON PAYMENTS MADE TO THE RETAILERS AS A COMMISSION OR DISCOUNT OF MORE THAN RS.5000/ - . THE ITA NO. 155 /CTK/201 6 9 ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE HAS GOT AUDITED HIS BOOKS OF ACCOUNT IN THE FINANCIAL YEAR 2011 - 2012 RELEVANT TO THE ASSESSMENT YEAR 2012 - 2013, WHICH IS UNDER DISPUTE FOR MAKING TDS . IN VIEW OF THE ABOVE PROVISIONS OF SECTION 194H OF THE ACT, THE ASSESSEE IS NOT REQUIRED TO MAKE TDS. THEREFO RE, THE ORDER PASSED BY THE AO IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, THE ORDER PASSED BY THE PR.CIT EXERCISING HIS POWER U/S.263 OF THE ACT IS NOT JUSTIFIED AND THE SAME IS HEREBY QUASHED AND THE APPEAL OF THE ASSESSEE IS ALLOW ED ON LEGAL ISSUE. 13 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 0 9 / 20 20 . S D/ - ( C.M.GARG ) S D/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 07 / 0 9 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - SRI ADITYA MOHAPATRA, PROP.: ORISSA MOTORS, KUJAKANTA, MAIN ROAD, DHENKANAL. 2. / THE RESPONDENT - PR.CIT - 2, BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//