Northern Credit & Collection Business P.Ltd, New Delhi V. DCIT, Circle-18(2), New Delhi

ITA 5761/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0155 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(3); 244A; 40(a)(ia); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DLEHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 5761/DEL/2017 ASSESSMENT YEAR: 2012-13 NORTHERN CREDIT & COLLECTION BUSINESS VS. DCIT, CIR CLE 18(2), C/O M/S. SB GARG & CO., CAS, 20/17, NEW DELHI. SHAKTI NAGAR, DELHI PAN : AABCN6833C (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. RAMESH KUMAR, SR. DR DATE OF HEARING: 07/07/2021 DATE OF ORDER : 16/07/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 08/06/2017 PASSED BY T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-38, NEW DELHI ('LD. CIT(A)') FOR THE ASSESSMENT YEAR 2012-13, NORTHERN CREDIT & COLL ECTION BUSINESS PVT. LTD.(THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND ENGAGED IN THE BUSINESS OF VERIFICATION ON BEHALF O F MULTI NATIONAL BANKS AND OTHER INSTITUTIONS. FOR THE ASSESSMENT YEAR 201 2-13, THEY HAVE FILED THEIR RETURN OF INCOME ON 27.09.2012 DECLARING AN I NCOME OF RS.78,13,250/-. ASSESSMENT U/S. 143(3) OF THE INCOM E-TAX ACT (THE ACT 2 FOR SHORT) WAS, HOWEVER, COMPLETE BY MAKING ADDITIO N OF RS.3,22,890 U/S. 244A OF THE ACT AND RS.7,18,200/- U/S. 40(A)(IA) OF THE ACT. LEARNED CIT(A) PARTLY ALLOWED RELIEF TO THE ASSESSEE AND CONFIRMED THE ADDITION OF RS.3,36,000/- U/S. 40(A)(IA) OF THE ACT AND DELETED THE REST OF THE ADDITIONS. 3. AGGRIEVED BY THE ORDER OF LD. CIT(A) IN SUSTAINI NG THE ADDITION TO THE TUNE OF RS.3,36,000/- U/S. 40(A)(IA), ASSESSEE PREFERRED THIS APPEAL STATING THAT OUT OF THE TOTAL PAYMENT OF RS.7,18,20 0/- TOWARDS RENT PAID TO FIVE PERSON, A SUM OF RS.3,82,200/- WAS PAID TO FOUR PERSONS AND PAYMENT TO EACH OF THEM IS LESS THAN 1,80,000/- AND THEREFORE, UNDER THE PROVISIONS OF SECTION 194-I, NO SUCH DEDUCTION NEED BE MADE WHERE THE AGGREGATE OF AMOUNT PAID DURING THE FINANCIAL YEAR DOES NOT EXCEED RS.1,80,000/- INDIVIDUALLY. FROM THE GROUNDS OF APP EAL, THE GRIEVANCE OF THE ASSESSEE COULD BE DECIPHERED THAT THE LD. CIT(A ) DID NOT SPECIFICALLY DELETE THIS ADDITION OF RS.3,82,200/- IN HER ORDER. 4. OTHER GRIEVANCE OF THE ASSESSEE IS THAT IN RESPE CT OF RS.3,36,000/- PAID TO ONE SH. CHANDRA KANT ADREKAR, THE AUTHORITI ES FAILED TO NOTICE THAT FORM 26A ISSUED BY THE ASSESSEE AND COUNTER SI GNED BY THE CHARTERED ACCOUNTANT IS IN COMPLIANCE WITH THE RULE S AND SH. CHANDRA KANT ADREKAR WAS NOT OBLIGED TO FILE THE RETURN OF INCOME IN AS MUCH AS HIS INCOME WAS BELOW THE MAXIMUM AMOUNT NOT CHARGEA BLE TO TAX. 5. WHEN THE MATTER IS CALLED, THERE IS NO REPRESENT ATION FROM THE ASSESSEE. NOTICE WAS SENT TO THE ADDRESS GIVEN IN F ORM NO. 36. IF THE ASSESSEE IS AVAILABLE IN SUCH ADDRESS, SUCH NOTICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE. IF FOR ANY REASON, THE ASSE SSEE IS NOT AVAILABLE THERE, IT IS FOR THE ASSESSEE TO MAKE ARRANGEMENTS FOR SERVICE OF SUCH 3 NOTICE BY FURNISHING THE ADDRESS WHERE THE ASSESSEE WOULD BE AVAILABLE, OR TO DELIVER IT TO SOME AUTHORISED PERSON, OR BY M AKING REQUEST TO THE POSTAL DEPARTMENT TO DETAIN THE MAIL TILL THE ASSES SEE CLAIMS THE SAME. NON-SERVICE OF NOTICE IS SOLELY ATTRIBUTABLE TO THE CONDUCT OF ASSESSEE. IN THESE CIRCUMSTANCES, WE PROCEED TO DECIDE THE APPEA L BASING ON THE MATERIAL AVAILABLE ON RECORD. 6. LEARNED DR RELIED ON THE ORDERS OF AUTHORITIES B ELOW. 7. WE HAVE GONE THROUGH THE RECORDS IN THE LIGHT OF SUBMISSIONS MADE BY THE LD. DR. IN SO FAR AS THE PAYMENT OF RS. 3,82,200/- TO FOUR PERSONS IS CONCERNED, NONE OF SUCH PERSONS RECEIVED AN AMOUNT EXCEEDING RS.1,80,000/- IN THE FINANCIAL YEAR AND T HEREFORE, UNDER PROVISO TO SECTION 194-I, NO DEDUCTION NEED BE MADE. THIS I S THE REASON WHY THE LD. CIT(A) DID NOT CONFIRM SUCH AN ADDITION AND SHE CONFINED HER DISCUSSION TO THE ADDITION OF RS.3,36,000/-. THOUGH IT IS IMPLIED FROM THE ORDER OF THE LD. CIT(A), NOW WE EXPRESSLY STATE THA T THE ADDITION OF RS.3,82,200/- MADE BY THE ASSESSING OFFICER IN RESP ECT OF PAYMENTS MADE TO FOUR INDIVIDUALS IS UNSUSTAINABLE AND SHALL STAN D DELETED. 8. NOW COMING TO THE SUSTENANCE OF ADDITION TO THE TUNE OF RS.3,36,000/-, THE RECORD REVEALS THAT FORM 26A DAT ED 10.01.2017 WAS ISSUED BY THE ASSESSEE AND IT WAS COUNTERSIGNED BY THE CHARTERED ACCOUNTANT AND INASMUCH AS IT WAS NOT SUBMITTED TO DCIT(SYSTEMS), THE LD. CIT(A) HELD THAT THERE WAS NO SUFFICIENT COMPLI ANCE WITH THE RULES. BE THAT AS IT MAY, THE LEANED CIT(A) WAS NOT SURE AS T O THE FACT WHETHER THE INCOME OF THE PAYEE WAS BELOW THE MAXIMUM AMOUNT NO T CHARGEABLE TO TAX. 4 9. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE WAS REQUIRED TO FILE THE DETAILS OF EXPENSES, ON WHICH TDS WAS DEDUCTED AND THE ASSESSING OFFICER DID NOT SEEK ANY EXPLANATION FOR NON-DEDUCTION OF TDS IN RESPECT OF THIS AMOUNT. ACCORDING TO THE ASS ESSEE BEFORE THE LD. CIT(A), THIS PREVENTED THE ASSESSEE FROM PRODUCING FORM 26A BEFORE THE ASSESSING OFFICER. IN THESE CIRCUMSTANCES, WHEN ONC E FORM 26A WAS PRODUCED BEFORE THE CIT(A), THE FACT OF INCOME OF T HE PAYEE BELOW THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX ASSUMES IMPORT ANCE, AND IN THE ABSENCE OF ANY FINDING ON THIS ASPECT, THE ADDITION CANNOT BE SUSTAINED. IN THE CIRCUMSTANCES, WE FIND IT DIFFICULT TO SUSTA IN THE ORDERS OF THE AUTHORITIES BELOW AND ACCORDINGLY ALLOW THE GROUNDS OF APPEAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DAY OF JULY, 2021. SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16/07/2021 AKS