Smt Anita Gupta , Bangalore V. Assistant Commissioner of Income Tax Non Corporate Circle-4(1), Chennai

ITA 2363/BANG/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 2631 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: LOKESH JAIN
• Keywords: Opportunity of being heard; Additional evidence
• Section: 139; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B SMC BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.2 363/BANG/2018 (ASST. YEAR 2014-15) SMT. ANITA GUPTA, E/7/12, PLATINUM CITY APARTMENTS, NO.2, HMT MAIN ROAD, NEAR CMT FACTORY, YESHWANTHPUR, BENGALURU. . APPELLANT PAN AAGPG2317Q. VS. THE ASST. COMMISSIONER OF INCOME-TAX, NON CORPORATE CIRCLE-4(1), CHENNAI. . RESPONDENT APPELLANT BY : SHRI LOKESH JAIN, C.A RESPONDENT BY : SHRI M.K BIJU, ADDL. CIT DATE OF HEARING : 04-09-2018 DATE OF PRONOUNCEMENT : -10-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)('CIT(A)') IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE, WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY OF BEING HEARD. ITA NO.2363/B/18 2 3. THE ORDER IS PASSED AGAINST THE PRINCIPLE OF NAT URAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ['LD. AO']OF RS.7,36,685/- U/S 40 (A)(IA). 5. THE LD. CIT(A) AND LD. AO HAS FAILED TO CONSTRUE D THE SECOND PROVISO TO SECTION 40(A)(IA) OF THE INCOME T AX ACT, 1961. 6. THE LD. CIT(A) HAS FAILED TO LAY EMPHASIS ON FOR M 26A RECEIVED FROM ALL THE PAYEES TO WHOM INTEREST WAS P AYABLE BY THE APPELLANT, WHICH WAS PRODUCED BY THE APPELLANT AT THE TIME OF HEARING. 7. THE APPELLANT RELIED ON THE PROVISION LAID UNDER SECTION 201(1) OF THE ACT WHICH CLEARLY STATES AS FOLLOWS: 'PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE PROVISIO NS OF THIS CHAPTER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF S UCH TAX IF SUCH RESIDENT- (I) HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139 (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED B Y HIM IN SUCH RETURN OF INCOME, AND THE PERSON FURNIS HES A CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED.' ITA NO.2363/B/18 3 8. THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAS ALREADY DEMONSTRATED THE ABOVE THREE CONDITIONS TO THE LD. AUTHORITIES SATISFACTION. AS LONG AS THE APPELLANT CANNOT BE TREATED AS AN ASSESSEE IN DEFAU LT, THE DISALLOWANCE UNDER SECTION 40(A)(IA) CANNOT BE ATTR ACTED. 9. THE LD. CIT(A) AND LD. AO HAVE GROSSLY ERRED IN CONFRONTING THE EVIDENCES PRODUCED BY THE APPELLANT BOTH AT THE TIME OF APPELLANT PROCEEDINGS AND AT THE TIM E OF ASSESSMENT. 2. DURING THE COURSE OF HEARING THE LD COUN SEL FOR THE ASSESSEE HAS CONTENDED THAT THE AO HAS MADE DISALLOWANCE ON INTEREST PAYME NT HAVING INVOKED THE PROVISION OF SEC.40(A)(IA) OF THE ACT ON ACCOUNT O F NON DEDUCTION OF TDS. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WIT H THE SUBMISSION THAT ALL THE PAYEES ARE NOT ASSESSED TO TAX. HE HOWEVER FILED FORM NO.26A WITH RESPECT TO ALL THE PAYEES BEFORE THE CIT(A) FOR VERIFICATION. THE CIT(A) DID NOT ADMIT THE SAME AND MADE DISALLOWANCE ON ACCOUNT OF INTEREST ON LATE PAYMENT AND PENALTY MATTER WAS RESTORED TO AO FOR VERIFICATION. THE L D COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT SINCE THE ASSESSEE HAS FILED FORM 26A FOR ALL THE PAYEES IN THE FORM OF ADDITIONAL EVIDENCE, IT SHOULD HAVE BE EN ADMITTED BY THE CIT(A) AFTER MAKING NECESSARY VERIFICATION AND THE ISSUE OF DISA LLOWANCE U/S 40A(IA) SHOULD HAVE BEEN EXAMINED BUT HE DID NOT DO THE SAME. 3. THE LD DR PLACED RELIANCE UPON THE ORDER OF THE CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF LO WER AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT THE AO HAS NOT AFFOR DED AN OPPORTUNITY OF BEING HEARD TO THE ASSESEE TO PRODUCE FORM 26A WITH RESPE CT TO THE PAYEES TO WHOM THE INTEREST WAS PAID AND MADE DISALLOWANCE U/S 40A(IA) OF THE ACT. BEFORE THE CIT(A), THE ASSESSEE HAD FILED FORM 26A BUT THE SA ME WAS NOT CONSIDERED BY THE CIT(A) AND HE CONFIRMED THE DISALLOWANCE. SINCE TH E ASSESSEE HAS FILED CERTIFICATE IN FORM NO.26A WITH REGARD TO ALL THE P AYEES, THE CIT(A) OUGHT TO HAVE EXAMINED THE SAME WHILE ADJUDICATING THE ISSUE OF DISALLOWANCE U/S 40(A)(IA) ITA NO.2363/B/18 4 OF THE ACT. I, THEREFORE, SET ASIDE THE ORDER OF TH E CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE ISS UE OF DISALLOWANCE IN THE LIGHT OF CERTIFICATE IN FORM NO.26A FIELD BEFORE THE CIT(A) WITH REGARD TO ALL THE PAYEES. 5. WITH RESPECT TO OTHER DISALLOWANCES OF RS. 18,636/- TOWARDS INTEREST ON DELAYED PAYMENT AND RS.17,569 OF PENALTY PAID, THE ISSUES ARE RESTORED TO AO FOR VERIFICATION. THEREFORE, I FIND NO INFIRMITY IN TH E ORDER OF THE CIT(A) IN THIS REGARD. ACCORDINGLY, THE APPEAL OF THE ASSESSEE ST ANDS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCT, 2018 . SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER BANGALORE DATED : 10/10/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE ITA NO.2363/B/18 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..