RAMESH B MEHTA, MUMBAI V. ITO 22(2)(4), MUMBAI

ITA 4230/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2237 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAY B JAKKE
• Assessee Lawyers: K R LAKSHMI NARAYANAN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, J UDICIAL MEMBER ./ I.T.A. NO. 4230 /MUM/ 2012 ( / ASSESSMENT YEAR : 2007 - 08 ) MR.RAMESH B MEHTA, 4 TH FLOOR, CHANDRA DARSHAN, 155, BHANUSHALI LANE, GHATKOPAR ( E), MUMBAI - 400077 / VS. INCOME TAX OFFICER 22(2)(4), AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ./ PAN : ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./ PAN :AADPM1328A / APPELLANT BY : SHRI K R LAKSHMINARAYANAN / RESPONDENT BY : SHRI UDAY B JAKKE / DATE OF HEARING : 2 .12. 2015 / DATE OF PRONOUNCEMENT : 2. 12. 2015 O R D E R PER B.R.BASKARAN,AM : THE APPEAL FILED BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER DATED 12.4.2012 PASSED BY THE LD.CIT(A) - 33, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2007 - 08. 2. GROUNDS OF APPEAL NO.1, 2 AND 7 RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND HENCE THEY DO NOT REQUIRE ADJUDICAT ION. ITA NO. 4230/ MUM/ 2012 2 3. AT TH E TIME OF HEARING, THE LD. AR DID NOT PRE SS GROUNDS OF APPEAL NO.3 AND 4 AND HENCE THEY ARE DISMISSED AS NOT PRESSED. 4. NOW THE ONLY ISSU E REMAINS TO BE ADJUDICATED RELATES TO THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961. THE ASSESSEE IS PROPRIETOR OF TWO BUSINESS CONCERNS. THE AO NOTICED THAT THE ASSESSEE HAS PAID INTEREST ON LOANS FROM BOTH THE CONCERNS, BUT DID NOT DEDUCT TAX AT SOURCE AS REQUIRED U/S 194A OF THE ACT. THE ASSESSEE ALSO DID NOT FURNISH DETAILS ABOUT CERTIFICATE S FOR NON - DEDUCTION OF TDS, IF ANY, OBTAINED FROM THE PAYEES OF INTEREST U/S 197 OF THE ACT. HENCE, THE AO DISALLOWED INTEREST EXPENDITURE BY INVOKING THE PROVISIONS OF SECTION 40 (A)(IA) OF THE ACT. 5. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT HE HAS OBTAINED F ROM NO.15G FROM THE PAYEES OF INTEREST AS PER THE PROVISIONS OF SEC. 197A OF THE ACT AND ACCORDINGLY DID NOT DEDUCT TDS U/S 194A OF THE ACT FROM INTEREST PAYMENTS . AS PER THE PROVISIONS OF SEC. 197A(2) OF THE ACT, THE ASSESSEE IS REQUIRED TO FURNISH COP IES OF FROM NO.15G TO COMMISSIONER OF INCOME TAX. THE FIRST APPELLATE AUTHORITY NOTICED THAT THE ASSESSEE HAS CLAIMED TO HAVE FURNISHED COPIES OF FORM NO.15G TO THE INCOME TAX OFFICER - TDS INSTEAD OF COMMISSIONER OF INCOME TAX . FURTH ER, THE LD. CIT(A) NOTICED THAT THE ASSESSEE DID NOT FURNISH THESE DETAILS BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, EVEN THOUGH THE ASSESSMENT WAS COMPLETED AFTER TWO YEARS FROM THE END OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HENCE, THE LD. CIT(A) FELT THAT THE GENUINENESS OF THE FORMS NEEDS TO BE FOUND OUT AND ACCORDINGLY DIRECTED TO THE AO TO ASCERTAIN THE SAME FROM ITO - TDS. HOWEVER, HE DIRECTED THE AO TO SUSTAIN THE ADDITION, IF THE FORMS WERE NOT FI LED BEFORE THE CIT. AGGRIEVED, THE ASSESSEE HAS FILED APPEAL BEFORE US. ITA NO. 4230/ MUM/ 2012 3 6. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS FILED THE COPIES OF FORM NO.15G ERRONEOUSLY BEFORE THE ITO - TDS INSTEAD OF CIT . HE SUBMITTED THAT THE LD CIT(A) WAS NOT JUSTIFIED IN DO UBTING ABOUT THE GENUINENESS OF THE FORMS, SINCE THE COVERING LETTER FILED BY THE ASSESSEE BEFORE ITO - TDS BEAR S T HE SEAL OF THE OFFICE OF THE ITO. H E SUBMITTED THAT THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX AT SOURCE, IF THE PAYEE OF THE INTEREST HAS FU RNISHED FORM NO.15G AND NON - FURNISHING OF THE SAME TO THE CIT IS ONLY A TECHNICAL DEFAULT. EVEN OTHERWISE, THE ASSESSEE HAS FURNISHED THE COPIES OF THE FORMS TO THE INCOME TAX DEPARTMENT. ACCORDINGLY HE PRAYED THAT THE ADDITION MADE U/S 40(A)(IA) OF THE ACT BE DELETED. 7. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO FURNISH THE COPIES OF THE CERTIFICATE OBTAINED IN FO R M NO.15G BEFORE THE CIT AS REQUIRED U/S 197 A(2) OF THE ACT , WHICH MEANS THAT THE ASSESSEE HAS FAILED TO COMPLY WI TH THE PROVISIONS OF SEC. 197A OF THE ACT . 8. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE AGREE WITH THE CONTENTIONS OF THE LD A.R THAT THE FILING OF COPIES OF FORMS AS REQUIRED U/S 197A(2) OF THE ACT BEFORE THE ITO INSTEAD OF LD CIT I S A TECHNICAL DEFAULT AND, IN OUR VIEW, IT MAY NOT WARRANT THE INVOKING OF THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT. A CAREFUL PERUSAL OF THE PROVISIONS OF SEC. 197A(1A) WOULD SHOW THAT THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S 194A OF T HE ACT IN THE CASE OF A PERSON(NOT BEING A COMPANY OR A FIRM), IF SUCH PERSON FURNISHES A DECLARATION IN WRITING IN DUPLICATE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER TO THE EFFECT THAT THE TAX ON HIS ESTIMATED TOTAL INCOME OF THE PREVI OUS YEAR IN WHICH SUCH INCOME IS TO BE INCLUDED IN COMPUTING HIS TOTAL INCOME WILL BE NIL. ACCORDING TO THE ASSESSEE, HE HAS OBTAINED THE DECLARATION IN THE ITA NO. 4230/ MUM/ 2012 4 PRESCRIBED FORMAT OF FORM NO.15G AND HENCE HE DID NOT DEDUCT TAX AT SOURCE U/S 194A OF THE ACT IN RESPECT OF INTEREST EXPENDITURE INCURRED BY IT. THERE IS MERIT IN THE SAID CONTENTIONS. 9. HOWEVER, AS NOTICED EARLIER, THE LD CIT(A) HAS DOUBTED ABOUT THE GENUINENESS OF THE CLAIM OF THE ASSESSEE, SINCE THE ASSESSEE COULD HAVE FURNISHED THESE DETAI LS BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BUT HAS FAILED TO FURNISH THEM. ACCORDINGLY THE LD CIT(A) HAS DIRECTED THE AO TO FIND OUT THE FACTS FROM THE ITO - TDS. THE LD A.R SUBMITTED THAT THE ASSESSEE IS NOT AWARE OF THE ACTION TAKEN BY THE AO. SINCE THE LD CIT(A) HAS GIVEN SPECIFIC DIRECTION, WE ARE OF THE VIEW THAT THIS ISSUE SHOULD BE RESTORED TO THE FILE OF THE AO. HOWEVER, WE MODIFY THE DIRECTION GIVEN BY THE AO AND DIRECT HIM TO DELETE THE DISALLOWANCE MADE U/S 40(A)(IA) OF THE A CT, IF THE ASSESSEE HAS FURNISHED THE COPIES OF THE FORM NO.15G TO THE ITO - TDS, SINCE WE HAVE ALREADY TAKEN A STAND THAT THE FURNISHING OF THE COPIES OF THOSE FORMS TO A WRONG AUTHORITY IS ONLY A TECHNICAL DEFAULT AND IT SHOULD NOT WARRANT INVOKING OF PROV ISIONS OF SEC. 40(A)(IA) OF THE ACT. WE FURTHER MAKE IT CLEAR THAT, IF BY ANY CHANCE, THE DETAILS OF FURNISHING OF FORMS BY THE ASSESSEE TO ITO - TDS COULD NOT BE TRACED FROM THE RECORDS OF ITO - TDS, THEN THE ASSESSEE SHOULD BE CONSIDERED TO HAVE FILED THE F ORMS, SINCE THE COVERING LETTER ATTACHED TO THE FORMS BEAR THE SEAL OF THE ITO. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 2 ND ,DEC, 2015 . SD SD ( / SANDEEP GOSAIN ) ( . . / B.R.BASKARAN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI ; DATED .. 2 ND DEC,2015 ITA NO. 4230/ MUM/ 2012 5 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNE D 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI