MESERS MILLENNIUM WIRES PRIVATE LIMITED, JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-II, JALANDHAR

ITA 425/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6935 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VEDPAL SINGH
• Assessee Lawyers: SANDIP VIJH
• Keywords: Opportunity of being heard; TDS; Set aside
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT AND SH. RAVISH SOOD, JUDICIAL MEMBER ITA NO.425/ASR./2018 : ASSTT. YEAR : 2013-14 M/S MILLENNIUM WIRES PVT. LTD., D-30, FOCAL POINT, JALANDHAR VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, JALANDHAR (APPELLANT) (RESPONDENT) PAN NO. AACCM9631J ASSESSEE BY : SH. SANDIP VIJH, CA REVENUE BY : SH. VED PA L SINGH, DR DATE OF HEARING : 07.01.2019 DATE OF PRONOUNCEMENT : 08.01.2019 ORDER PER N. K. SAINI, VICE PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 18.05.2018 OF LD. CIT(A)-5, LUDHIANA. 2. THE ONLY GROUND RAISED IN THIS APPEAL READS AS U NDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) , HAS ERRED IN SUSTAINING THE DISALLOWANCE OF RS.12,40,000/- IN RESPECT OF PAYMENTS FOR WHICH TDS HAD NOT BEEN DEDUCTED. THE SUBMISSIONS MADE HAVE NOT BE EN APPRECIATED. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE AO DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE AUDIT REPOR T REVEALED THAT THE AUDITOR HAD MENTIONED, THE ASSESSEE DID NOT DED UCT TDS ON THE PAYMENT MADE TO ADVOCATES TOTALING TO RS.12,40,000/ -. THE AO ITA NO. 425/ASR./2018 MILLENNIUM WIRES PV T. LTD. 2 ASKED THE ASSESSEE TO EXPLAIN THE DETAILS OF THE LE GAL EXPENSES AND SHOW-CAUSE AS TO HOW THE SAME WAS ALLOWABLE EXPENSE S AS NO TDS WAS DEDUCTED. IN RESPONSE, THE ASSESSEE SUBMITTED T HAT IT WAS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT AND THAT THE EX PENDITURE WAS ELIGIBLE FOR DEDUCTION. THE AO, HOWEVER, DID NOT FI ND MERIT IN THE SUBMISSION OF THE ASSESSEE BY OBSERVING THAT THE AS SESSEE HAD NOT FURNISHED A CERTIFICATE GIVEN TO IT BY THE CHARTERE D ACCOUNTANT OF THE RECIPIENT IN FORM NO. 26A IN ACCORDANCE WITH RU LE 31ACB OF THE INCOME TAX RULES. ACCORDING TO HIM, THE ASSESSE E HAD NOT DEDUCTED TDS ON THE FEES FOR PROFESSIONAL SERVICES U/S 194J OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). HE, THEREFORE, MADE THE DISALLOWANCE OF RS.12,40,000/- U/S 40(A)(IA) OF THE ACT. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING THAT THERE WAS NO DENIAL THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TDS ON FEES PAID FOR PROFESSIONAL SERVICES U/S 194J OF THE ACT BUT N O TDS WAS DEDUCTED, THEREFORE, THE PROVISIONS OF SECTION 40(A )(IA) OF THE ACT WERE RIGHTLY ATTRACTED IN THIS CASE. HE ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 5. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE DEDUCTEES HAD ALREADY PAID THE TAX, THEREF ORE, NO DISALLOWANCE COULD HAVE BEEN MADE U/S 40(A)(IA) OF THE ACT. HE REQUEST ED TO SET ASIDE THIS ISSUE TO THE FILE OF THE AO FOR VERIFICATION AND IF IT IS FO UND THAT THE DEDUCTEES HAD ALREADY PAID THE TAX, NO DISALLOWANCE COULD HAVE BE EN MADE. ITA NO. 425/ASR./2018 MILLENNIUM WIRES PV T. LTD. 3 6. IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW BUT COULD NOT CONTROVERT THE CONT ENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE, THE FACTS AS TO WHETHER THE DEDUCTEES HAD ALREADY PAID THE TAX AND THE CHARTERE D ACCOUNTANT HAD CERTIFIED IN FORM NO. 26A NEEDS VERIFICATION AT THE LEVEL OF THE AO. WE, THEREFORE, SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO BE ADJUDI CATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 08/01/2019) SD/- SD/- (RAVISH SOOD) (N. K. SAINI) JUDICIAL MEMBER V ICE PRESIDENT DATED: 08/01/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR