Smt. Jyoti Sanwal, CHENNAI V. ITO, CHENNAI

ITA 2318/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7886 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2016
• Court: TRIBUNAL
• Department Lawyers: AWIJIT RAKSHIT
• Assessee Lawyers: D ANAND
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 2318/MDS/2016 / ASSESSMENT YEAR :2012 - 13 SMT . JYOTI SANWAL, NO. 60, GODOWN STREET, CHENNAI 600 001. [PAN:A A FP J8177Q ] VS. THE INCOME TAX OFFICER , NON - CORPORATE WARD 1 1 ( 4 ) , CHENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI D. ANAND, ADVOCATE / RESPONDENT BY : SHRI A W IJIT RAKSHIT, JCIT / DATE OF HEARING : 3 1 . 1 0 .201 6 / DATE O F P RONOUNCEMENT : 08 . 12 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER: T HE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 3 , CHENNAI, DATED 2 0 .0 6 .201 6 RELEVANT TO THE ASSESSMEN T YEAR 20 1 2 - 1 3 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF .7,19,076/ - MADE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . I.T.A. NO . 2318 /M/ 16 2 2. BRIEF FACTS OF T HE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUS INESS OF TEXTILES TRADING AND FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012 - 13 ON 23.09.2012 DECLARING TOTAL INCOME OF .2,16,970/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ON 12.08.2013. FURTHER, NOTICE UNDER SECTION 142(1) OF THE ACT DATED 06.06.2014 WAS ISSUE CALLING FOR DETAILS. IN RESPONSE THERETO, THE ASSESSEE FILED ALL THE DETAILS. AFTER VERIFICATION OF THE BANK STATEMENT, DETAILS OF UNSECURED LOAN AND TRADE CREDITORS, LEDGER ACCOUNT FOR PURCHASE AND SALES, DETAILS FOR INTEREST RECEIVED AND INTER EST PAID, DETAILS FOR TDS DEDUCTED FOR INTEREST PAID TO LOAN CREDITORS, SALARY AND RENT PAID AND ALSO CONFIRMATION OBTAINED FOR LOAN CREDITORS, ETC. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT BY ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT .9,36,046/ - AFTER MAKING DISALLOWANCE SECTION 40(A)(IA) OF THE ACT OF .7,19,076/ - SINCE THE ASSESSEE HAS NOT DEDUCTED TDS UNDER SECTION 194A OF THE ACT TO THE INTEREST AMOUNT PAID TO THE LOAN CREDITORS. I.T.A. NO . 2318 /M/ 16 3 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEF ORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND IN VIEW OF THE FACT THAT THE ASSESSEE HAS FAILED TO SUBMIT THE PROOF OF 15G/15H FURNISHED TO THE LD. CIT, AS REQUIRED DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. CIT(A) CONFI RMED THE DISALLOWANCE MADE ON THIS ACCOUNT. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT MERE TECHNICAL FAILURE CANNOT LEAD TO DISALLOWANCE, WHEN THE ASSESSEE HAS TAKEN RELEVAN T FORMS IN 15G/15H FROM VARIOUS PERSONS, BUT INCIDENTALLY, THE ASSESSEE WAS NOT AWARE OF THE CORRECT JURISDICTION WITH WHOM THOSE FORMS WERE REQUIRED TO BE FILED. SINCE THE ASSESSEE HAS OBTAINED THE RELEVANT FORMS AND FILED BEFORE THE ASSESSING OFFICER, TH E LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) SHOULD BE DELETED. 5. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. I.T.A. NO . 2318 /M/ 16 4 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON THE INTEREST PAYMENTS TO THE LOAN CREDITORS. BY FILING A WRITT EN EXPLANATION, THE ASSESSEE HAS SUBMITTED THAT AGAINST THE PAYMENT OF INTEREST TO THE LOAN CREDITORS, FORM NO. 15G AND 15H WERE OBTAINED AND THEREFORE, SUCH PAYMENTS WERE NOT COVERED UNDER SECTION 40(A)(IA) OF THE ACT AND THUS, NO TDS WAS MADE. HOWEVER, T HE ASSESSING OFFICER HAS OBSERVED THAT, IF AT ALL THE FORM NO. 15G/15H WERE OBTAINED, THEY WERE REQUIRED TO BE FURNISHED TO THE LD. CIT AS REQUIRED UNDER SECTION 197(A)(1A) OF THE ACT AND THE ASSESSEE SHOULD HAVE FILED PROOF OF FILING FORM NO. 15G/15H BEFO RE THE ASSESSING OFFICER. SINCE THE ASSESSEE FAILED TO FURNISH PROOF OF HAVING FILED FORM NO. 15G/15H BEFORE THE LD. CIT, THE ASSESSING OFFICER DISALLOWED THE INTEREST AMOUNT PAID TO THE LOAN CREDITORS UNDER SECTION 40(A)(IA) OF THE ACT, SINCE THE ASSESSEE , NEITHER TDS WAS DEDUCTED ON THAT AMOUNT NOR FURNISHED PROOF OF HAVING FILED FORM NO. 15G/15H BEFORE THE LD. CIT. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FAILED TO PRODUCE COPY OF FORM NO. 15G/15H, AS STATED TO HAVE BEEN OBTAINED FROM THE LOAN CREDITORS, BEFORE THE LD. CIT(A) AND THEREFORE, THE LD. I.T.A. NO . 2318 /M/ 16 5 CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED THAT THE ASSESSEE HAS OBTAINED FORM 15G/15H FROM VARIOUS PERSONS, BUT INCIDENTALLY, THE ASSESSEE WAS NOT AWARE OF THE CORRECT JURISDICTION WITH WHOM THOSE FORMS WERE REQUIRED TO BE FILED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THE RELEVANT FORMS VIDE LETTER D ATED 04.03.2015, BUT THE SAME WERE NOT ACCEPTED SINCE IT W AS NOT SUBMITTED BEFORE THE LD. CIT. WE HAVE PERUSED THE ASSESSMENT ORDER AND FOUND THAT THE ASSESSEE HAS SUBMITTED FORM 15G BEFORE THE ASSESSING OFFICER DURING THE COURSE OF HEARING. HOWEVER, THE ASSESSING OFFICER HAS REJECTED FORM 15G FILED BY THE ASSESSEE SINCE THE ASSESSING OFFICER WAS NOT AN AUTHORITY TO ACCEPT THE SAME. DURING THE COURSE OF APPELLATE PROCEEDINGS, WHEN THE LD. CIT(A) HAS SPECIFICALLY ASKED THE ASSESSEE TO PRODUCE COPY OF FORM 1 5G/15H , THE ASSESSEE COULD NOT PRODUCE THE SAME, FOR WHICH, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT ASSIGNED ANY REASON BEFORE US. UNDER THESE CIRCUMSTANCES, IN THE INTEREST JUSTICE, WE DIRECT THE ASSESSEE TO FILE COPY OF FORM 15G/15H BEFORE THE LD. CIT(A ) AND THE LD. CIT(A) IS ALSO DIRECTED TO VERIFY THE SAME AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING AN OPPORTUNITY OF HEARING I.T.A. NO . 2318 /M/ 16 6 TO THE ASSESSEE. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 8 TH DECEMBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 08 . 12 .201 6 VM / - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.