Chetan Pravin Chitalia, Mumbai V. Assistant Commissioner of Income Tax Circle 18(1), Mumbai

ITA 2468/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0474 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 18-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 12-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH
• Keywords: TDS; Rule 8D
• Section: 14A; 194C

Judgement Text

आयकर अपीलीय अिधकरण मुंबई पीठ “सी ”,मुंबई 炈ी िवकास अव瀡थी, 瀈याियक सद瀡य एवं 炈ी , लेखाकार सद瀡य के सम楹 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ C ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI PRASHANT MAHARSHI , ACCOUNTANT MEMBER आअसं.2468/मुं/2023 (िन.व. 2014-15) ITA NO.2468/MUM/2023(A.Y.2014-15) Chetan Pravin Chitaliya, 14, Ramwadi, Kalbadevi, Mumbai – 400 002 PAN: AABPC-1904-E ...... अपीलाथ牸 /Appellant बनाम Vs. Asst.Commissioner of Income Tax, Circle- 18(1), 202, 2 nd Floor, Earnest House, NCPA Marg, Nariman Point, Mumbai – 400 021. ..... 灹ितवादी/Respondent अपीलाथ牸 獧ारा/ Appellant by : Shri Jitendra Singh, Advocate ितवादी ारा/Respondent by : Shri Prabhat Kumar Gupta सुनवाई क琉 ितिथ/ Date of hearing : 19/10/2023 घोषणा क琉 ितिथ/ Date of pronouncement : 27/10/2023 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[in short ‘the CIT(A)’] dated 02/05/2023, for the Assessment Year 2014- 15. 2. This appeal is time barred by 11 days. The assessee has filed an application praying for condonation of delay, citing reasons for the delay in filing of appeal. We have perused the said application. We are satisfied that the delay in filing of appeal is for the bonafide reasons stated in the 2 ITA NO.2468/MUM/2023(A.Y.2014-15) application. The delay of 11 days in filing of appeal is condoned and the appeal is admitted for adjudication on merits. 3. Shri Jitendra Singh appearing on behalf of the assessee submitted that the CIT(A) in an ex-parte proceedings has upheld the addition/disallowance made in respect of : (i) Short deduction of TDS; and (ii) Disallwoance u/s. 14A of the Income Tax Act, 1961 [in short ‘the Act’] r.w.r. 8D of the Income Tax Rules, 1962 [in short ‘the Rules’] The ld. Counsel for the assessee submitted that during the period relevant to assessment year under appeal, the assessee had made payment to three parties i.e. (i) Stamco Steel Processor Pvt. Ltd.; (ii) Keshva Engineering Pvt. Ltd. and(iii) Suhas Enterprises. The assessee deducted TDS @ 1% on the payment made to the aforesaid parties. According to the Assessing Officer TDS should have been deducted @2% u/s. 194C of the Act, hence, the Assessing Officer disallowed entire payments made to the aforesaid parties. The ld. Counsel for the assessee submitted that it is a well settled law that no disallowance can be made for short deduction of TDS. In support of his contentions he placed reliance on the decision in the case of CIT vs. S.K.Tekriwal, 361 ITR 432(Cal) and in the case of PCIT vs. Future First Info Services Pvt. Ltd., 447 ITR 299 (Del). 4. Per contra, Shri Prabhat Kumar Gupta representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. 5. Both sides heard, orders of authorities below examined. The assessee in appeal has assailed impugned order on two counts: 3 ITA NO.2468/MUM/2023(A.Y.2014-15) (i) Disallowance on account of low deduction of TDS; and (ii) Disallowance u/s. 14A r.w.r. 8D of the Act. 6. The assessee has made payment to three parties i.e. (i) Stamco Steel Processor Pvt. Ltd.; (ii) Keshva Engineering Pvt. Ltd. and(iii) Suhas Enterprises aggregating to Rs.17,44,248/-. The assessee deducted TDS @ 1% on the payments made to aforesaid parties. According to the Assessing Officer, the assessee was liable to deducted tax at soruce @2% instead of 1%. Thus, the Assessing Officer disallowed entire payments made to the aforesaid parties. It is no more re-integra that where the assessee has deducted tax at soruce albeit at a lower rate, no disallowance of the payments can be made.[Re: CIT vs. S.K.Tekriwal(supra)]. In view of the above settled legal position, disallowance on account of deduction of TDS at lower rate is directed to be deleted. The ground No.2 of appeal is thus, allowed. 7. In ground No.3 of appeal, the assessee has assailed disallowance u/s.14A r.w.r. 8D. It is an undisputed fact that during the period relevant to assessment year under appeal, the assessee has earned exempt income of Rs.82,528/-. No suo-motu disallowance u/s. 14A of the Act was made by the assessee for earning exempt income. The Assessing Officer invoked the provisions of Rule 8D and made disallowance of Rs.44,279/- u/r.8D(2)(iii). The assessee has not been able to show any infirmity in the disallowance made by the Assessing Officer and thereafter confirmed by the CIT(A). We find no merit in ground No.3 of appeal, hence, dismissed. 8. The ground No.1 of appeal is general in nature, hence, requires no separate adjudication. 4 ITA NO.2468/MUM/2023(A.Y.2014-15) 9. In the result, appeal by the assessee is partly allowed. Order pronounced in the open court on Friday the 27 th day of October, 2023. Sd/- Sd/- (PRASHANT MAHARSHI ) (VIKAS AWASTHY) लेखाकार सद瀡य/ACCOUNTANT MEMBER 瀈याियक सद瀡य/JUDICIAL MEMBER मुंबई/ Mumbai, 琈दनांक/Dated 27/10/2023 Vm, Sr. PS(O/S) 灹ितिलिप अ灡ेिषत 灹ितिलिप अ灡ेिषत灹ितिलिप अ灡ेिषत 灹ितिलिप अ灡ेिषतCopy of the Order forwarded to : 1. अपीलाथ牸/The Appellant , 2. 灹ितवादी/ The Respondent. 3. The PCIT 4. िवभागीय 灹ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 5. गाड榁 फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai