Dy. Commissioner of Income Tax , Circle-16(1), Hyderabad V. Neueon Towers Limited (Formerly Known as Sujana Towers Limited ), Medak

ITA 1794/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4055 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 22-04-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 05-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R. DIPAK
• Assessee Lawyers: P.MURALI MOHANA RAO
• Keywords: TDS; Set aside
• Section: 40(a)(ia); 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1794/HYD/2018 ASSESSMENT YEAR: 2015-16 DY.COMMISSIONER OF INCOME TAX, CIRCLE-16(1), HYDERABAD VS M/S.NEUEON TOWERS LIMITED, (FORMERLY KNOWN AS SUJANA TOWERS LTD) HYDERABAD [PAN: AAKCS7820F] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI R.DIPAK, DR FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR DATE OF HEARING : 22-04-2021 DATE OF PRONOUNCEMENT : 31-05-2021 O R D E R PER S.S.GODARA, J.M. : THIS REVENUES APPEAL FOR AY.2015-16 ARISES FROM THE CIT(A)-4, HYDERABADS ORDER DATED 28-06-2018 PASSED IN CASE NO. 0137 / 2017-18 / ACIT, CIR.16(1)CIT(A)-4 / HYD / 18-19, INVOLVING PROCEEDINGS U/S.143(3) OF THE INCOME TAX A CT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUE HAS PLEADED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: ITA NO. 1794/HYD/2018 :- 2 -: 1. THE LD.CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO VERIFY AND ALLOW CLAIM OF THE ASSESSEE, WHICH IS BEYOND THE MA NDATE PROVIDED UNDER SECTION 251(1)A OF THE INCOME TAX ACT. 2. THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO VERIFY AND ALLOW THE CLAIM OF THE ASSESSEE WITHOUT GIVING A FI NDING ON THE MERITS OF THE DISALLOWANCE MADE U/S40(A)(IA) BY THE ASSESS ING OFFICER OF RS. 8,69,11,284/-. 3. THE LD.CIT(A) ERRED IN DIRECTING THE AO TO VERIF Y AND ALLOW AS PER THE DELHI HIGH COURT DECISION IN THE CASE OF M/S. A NSAL LAND MARK TOWNSHIP 377 ITR 635(DELHI) (2015) IGNORING THE HON 'BLE APEX COURT DECISION IN CASE OF PALAM GAS SERVICE. VS COMMISSIO NER OF INCOME TAX 394 ITR 300 (2017). 4. THE LD. CIT(A) ERRED IN LAW BY IGNORING THE FACT THAT THE ASSESSEE FAILED TO SATISFY THE FIRST PROVISO (INSERTED BY TH E FINANCE ACT,2012 W.E.F. 01-07-2012) TO SEC. 201(1)OF THE INCOME TAX ACT. 5. ANY OTHER GROUND THAT MAY BE, RAISED AT THE TIME OF HEARING. 3. LEARNED CIT-DR REITERATED THE REVENUES PLEADINGS A ND VEHEMENTLY ARGUED THAT THE CIT(A) NO MORE POSSESSES HI S JURISDICTION TO SET ASIDE AS PER SECTION 251(1)(A) O F THE ACT AS THE SAME WAS OMITTED VIDE FINANCE ACT, 2001 W.E.F.01-06 - 2001. THE ASSESSEES CASE ON THE OTHER HAND IS THAT THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THE ASSES SEES CASE IN LIGHT OF SECTION 40(A)(IA) SECOND PROVISO INSERTED IN THE ACT VIDE FINANCE ACT, 2012, W.E.F.01-04-2013 THAT THE IMPUG NED STATUTORY PROVISION DOES NOT APPLY IN CASE AN ASSESSEE IS NOT THE ASSESSEE IN DEFAULT IN LIGHT OF SECTION 201(1) 1 ST PROVISO TO THE ACT. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS. WE FIND FORCE IN REVENUES LEGAL ARGU MENT THAT THE CIT(A)S JURISDICTION TO SET ASIDE ANY ISSUE STANDS OMITTED FROM THE ACT IN ABOVE TERMS. THE FACT ALSO REMAINS THA T WE ARE DEALING WITH SECTION 40(A)(IA) DISALLOWANCE ON ACCOU NT OF ITA NO. 1794/HYD/2018 :- 3 -: ASSESSEES FAILURE TO DEDUCT TDS WHICH REQUIRES FURT HER FACTUAL VERIFICATION AS TO WHETHER THE CONCERNED PAYEES STAND ASSESSED TO TAX OR NOT. WE THUS ACCEPT THE REVENUES FIRST AND FO REMOST SUBSTANTIVE GROUND IN PRINCIPLE BUT ADOPT THE VERY COU RSE OF ACTION AT THE SAME TIME TO RESTORE THIS ISSUE OF APPLICATIO N OF SECTION 40(A)(IA) 2 ND PROVISO BACK TO THE ASSESSING OFFICER FOR HIS AFRESH FACTUAL VERIFICATION AS PER LAW. ORDERED ACCORDINGLY. 5. THIS REVENUES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 31-05-2021 TNMM ITA NO. 1794/HYD/2018 :- 4 -: COPY TO : 1.DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-16(1), HYDERABAD. 2.M/S.NEUEON TOWERS LIMITED (FORMERLY KNOWN AS SUJA NA TOWERS LTD), SURVEY NO.321, TURKALA KHANPUR (V), HA TNUR (M), MEDAK DIST. 3.CIT(APPEALS)-4, HYDERABAD. 4.PR.CIT-4, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.