THE SOFT TEX PROCESSING MILLS , PERUNDURAI V. ADIT , BANGALORE

ITA 808/CHNY/2022

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The case involves The Soft Tex Processing Mills, the appellant, contesting an intimation from the CPC, Bengaluru, which disallowed a sum of Rs. 56.23 lakhs under section 40(a)(ia) due to non-deduction of TDS on interest payments for the Assessment Year 2019-20. The disallowance was initially confirmed by the Commissioner of Income Tax (Appeals) due to the absence of the assessee's representation. The appellant argued that the payment was made to a resident and a 30% disallowance had already been made in the return of income, citing a reporting error in the Tax Audit Report. The Tribunal found merit in the appellant's arguments and directed a re-verification of the disallowance made by the CPC to avoid double disallowance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133825 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 27-02-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 25-09-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 40(a)(ia); 143(1)

Judgement Text

आयकर अपीलीय अिधकरण ‘ए’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय +ी महावीर िसंह, उपा12 एवं माननीय +ी मनोज कु मार अ6वाल ,लेखा सद9 के सम2। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.808/Chny/2022 (िनधाBरण वषB / Assessment Year: 2019-20) The Soft Tex Processing Mills J35A & R21, SIPCOT Industrial Growth Centre P.V. Palayam, Perundurai-638 052. बनाम / V s. ADIT CPC, Bengaluru. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . AAE F T -1 7 4 7 - K (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri A. Suraj Nahar (C.A) – Ld. AR थ की ओरसे/Respondent by : Shri AR. V Sreenivasan (Addl. CIT) –Ld. DR सुनवाई की तारीख/Date of Hearing : 28-02-2023 घोषणा की तारीख /Date of Pronouncement : 01-03-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 28-07-2022 in the matter of an intimation issued by Centralized Processing Center, Bengaluru (CPC) u/s. 143(1) of the Act on 06-05- 2020. The sole grievance of the assessee is disallowance u/s 40(a)(ia) for Rs.56.23 Lacs for want of TDS on interest payment. This default was reported in Tax Audit report and accordingly, CPC made ITA No.808/Chny/2022 - 2 - impugned disallowance u/s 40(a)(ia). The Ld. CIT(A) confirmed the same since there was no representation by assessee during appellate proceedings. Aggrieved, the assessee is in further appeal before us. 2. The Ld. AR submitted that the payment was made to resident and the default would attract 30% disallowance which was already made by the assessee in the return of income. In support, the ledger extracts as well as computation of income has been placed on record. The Ld. AR submitted that there was reporting error in the Tax Audit Report. The Ld. Sr. DR submitted that the assessee did not furnish correct audit report at any point of time. 3. After going through the computation of income, prima-facie the assessee has made disallowance of 30% for the default. The documentary evidences furnished before us support the claim of the assessee. Any further disallowance made by CPC would amount to double disallowance. Therefore, we direct Ld. AO to verify the claim of the assessee and if found correct, delete the impugned disallowance as made by CPC. 4. The appeal stand allowed for statistical purposes. Order pronounced on 01 st March, 2023. Sd/- (MAHAVIR SINGH) उपा12 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद9 / ACCOUNTANT MEMBER चे+ई / Chennai; िदनांक / Dated : 01-03-2023 EDN/- आदेश की Vितिलिप अ 6ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु4/CIT 4. िवभागीय ितिनिध/DR 5. गाड फाईल/GF