Shri Mahavir Ferro Alloys (P) Limited, Sundargargh V. ITO(TDS), Rourkela

ITA 224/CTK/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5985 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ALOK MOHAPATRA; GOUTAM SAHU
• Keywords: TDS
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.224/CTK/2019 Assessment Year: 2011-12 Shri Mahavir Ferro Alloys Pvt. Ltd., IDC Kalunga Industrial Estate, Kalunga, Sundergarh, Osisha. PAN: BBNS01270D Vs. ITO (TDS), Rourkela, Sundergarh, Odisha. (Appellant) (Respondent) Assessee by : Shri Alok Mohapatra & Shri Goutam Sahu, ARs Revenue by : Shri Abhay Kumar Rout, Sr. DR Date of Hearing : 27.05.2022 Date of Pronouncement : 18.08.2022 ORDER PER C.M. GARG, JM: This appeal filed by the assessee is directed against the order dated 27.03.2019 of the CIT(A), Sambalpur, relating to Assessment Year 2011-12. 2. The assessee has filed an application dated 19.01.2020 seeking condonation of 3 days in filing the appeal before the Tribunal supported by an affidavit and medical certificate stating that the director of the company was ill and under treatment from 26.06.2019 to 01.07.2019 and was advised to take ITA No.224/CTK/2019 2 complete rest and thus, he was not medically fit, therefore, the appeal could be filed only on 2 nd July, 2019. The ld. Sr. DR did not raise any objection in condoning the delay of 3 days in filing the appeal before the Tribunal keeping in view the medical certificate and affidavit of the director of the company. We are satisfied that there was sufficient cause for filing the appeal late by 3 days, therefore, the delay of three days in filing the appeal before the Tribunal is condoned and the appeal is admitted for hearng. 3. The sole ground raised by the assessee in this appeal reads as under:- “1. The assessee on mistaken belief that tax at source on interest payments to M/s L & T Finance Ltd is not deductible fails to deduct tax of Rs.60,327.00/-.The learned commissioner of Income Tax (Appeals) has erred by misinterpreting the CBDT circular No. 275/201- IT (B) dated 29.01.1997 on the subject and not considering the established pronouncement of law on the subject in dispute by highest court of law, Hon‟ble Supreme Court. The assessee cannot made liable to pay tax at source as taxes due have else already been paid by the deductee assessee (L & T Finance Ltd) as it amounts to double taxation of same amount in two hands.” 4. The ld. Counsel for the assessee submitted that the assessee on mistaken belief that tax at source on interest payment to M/s L&T Finance Ltd. is not deductible, failed to deduct tax of Rs.60,327/- while making payment to the said company. The ld. AR vehemently pointed out that the ld.CIT(A) has erred in misinterpreting the CBDT Circular No.275/201- IT (B) dated 29.01.1997 on the subject by not considering the established pronouncement of law on the subject in dispute by the Hon‟ble Supreme Court in the case of Hindustan Coca Cola ITA No.224/CTK/2019 3 Beverage (P) Ltd. vs. CIT in Appeal (Civil) No.3765/2007 dated 16.08.2007. The ld. Counsel further drew our attention towards the Certificate of Accountant under the first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 (for short, „the Act‟) for certifying the furnishing of the return of income, payment of tax, etc., by the payee and submitted that the assesseee has made payment of interest to L&T Finance Ltd., during FY 2010-11 relevant to AY 2011-12 on five occasions on which TDS of Rs.60,327/- was to be deducted and the said certificate dated 20 th March, 2015 clearly reveals that these receipts of interest on term loan has been included by the payee in its total amount of taxable income as per return filed. Therefore, no addition could have been made in the hands of the assessee. 5. Replying to the above, the ld. Sr. DR placed reliance on the order of the AO as well as the ld.CIT(A) and also drew our attention towards written submissions filed by the Department on 06.10.2021 and submitted that the assessee did not furnish any certificate in Form No.26A (Rule 31ACB) under the first proviso to sub-section (1) of section 201 of the Act. To support this contention, he drew our attention towards para 5.1 at page 2 of the assessment order. The ld. Sr. DR also drew our attention towards the last para at page 2 and 3 of the first appellate order and submitted that this certificate was also not produced before the ld. First appellate authority, therefore, the addition was rightly confirmed by him. ITA No.224/CTK/2019 4 6. Placing rejoinder to the above, the ld. Counsel submitted that the ld. Sr. DR is not disputing or raising any doubt regarding the certificate submitted by the assessee dated 20 th March, 2015 which clearly shows that the deductee/payee has included the amount of interest received by him on term loan from the assessee. Therefore, as per the first proviso to sub-section (1) of section 201 of the Act, no addition can be made in the hands of the assessee in view of the judgment of the Hon‟ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd. (supra). 7. On careful consideration of the rival arguments, we are of the considered view that the ld. Sr. DR has not disputed the certificate filed by the assessee dated 20.03.2015 showing that the deductee/payee has included the impugned amount of interest paid by the assessee on term loan to M/s L&T Finance Ltd. and the payee has included this amount in his return of income and has also offered for taxation and taxes has been paid thereon. But, at the same time, we also observe that this certificate was neither furnished before the AO nor before the CIT(A), therefore, we find it appropriate to restore the issue for the limited purpose, i.e., for verification of the certificate dated 20.03.2015 issued by recipient/deductee/payee M/s L&T Finance Ltd., to the file of the AO. It is also directed that if the AO finds that the certificate issued by the deductee is in order and as per the requirement of proviso to sub-section (1) of section 201 of the Act, then, the impugned addition be deleted. ITA No.224/CTK/2019 5 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 18.08.2022 under Rule 34(4) of the IT(AT) Rules, 1963. Sd/- Sd/- (ARUN KHODPIA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 18 August, 2022. dk Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, Cuttack