Sri Dipti Prasad Das, Bhubaneswar V. ACIT, Bhubaneswar

ITA 96/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4388 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 23-03-2010
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Keywords: TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 96/CTK/2010 (ASSESSMENT YEAR 2006 - 07) SRI DIPTI PRASAD DAS. 2MD F;PPR. 59 JAN PATH, BHUBANESWAR 751 001, KHURDA, ORISSA, PAN: AAMPO 6083B VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: NONE FOR THE RESPONDENT SHRI S.C.MOHANTY, DR ORDER SHRI K.S.S.PRASAD RAO, JUDIC IAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT.25.1.2010 FOR THE ASSESSMENT YEAR 2006 - 07 IN THE CASE OF THE ASSESSEE. 3. THOUGH NOTICES WERE ISSUED TO THE ASSESSEE IN TH E ADDRESS GIVEN IN COL.10 OF THE MEMORANDUM OF APPEAL, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING. BUT ON CONSIDERATION OF THE ISSUE RAISED BY THE ASSESSEE, IT IS FOUND THAT THE APPEAL CAN BE ADJUDICATED EVEN IN ABSENCE OF THE ASSESSEE BY HEARING THE LEARNED DR. THEREFORE, WE PROCEEDED TO HEAR THE CASE AND DISPOSE OF THE CASE EXPARTE QUA ASSESSEE ON MERITS AFTER HEARING THE LEARNED DR AND PERUSING THE MATERIAL AVAILABLE ON RECORD. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST DISALLOWANCE OF RS.1,56,000 U/S.40(A)(IA) OF THE INCOME - TAX ACT,1961 BEING THE RENT PAID BY THE ASSESSEE ON WHICH NO TAX HAS BEEN DEDUCTED AT SOURCE. 3. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT, THE ASSESSI NG OFFICER FOUND THAT THE ASSESSEE HAS PAID RS.1,56,000 ITA NO.96/CTK/2010 2 AS RENT TO ONE SRI GOVIND CHANDRA MOHANTY TOWARDS LETTING OUT OF HIS PREMISES, BUT HAS NOT DEDUCTED TAX AT SOURCE, WHICH ACCORDING TO THE ASSESSING OFFICER WAS REQUIRED TO BE DEDUCTED U/S.194 - I. THERE FORE, THE ASSESSING OFFICER BY INVOKING PROVISIONS OF SECTION 40(A)(IA) DISALLOWED THE SAID AMOUNT AND MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE LEARNED DR, DURING THE COURSE OF HEARING, HAS VEHEMENTLY SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW CONTENDING INTER ALIA THAT THE ASSESSEE ADMITTEDLY HAS NOT DEDUCTED TDS ON THE RENT OF RS.1,65,000 PAID BY HIM TO THE LAND LORD. HENCE, IT IS A CLEAR CASE FALLING WITHIN THE SCOPE OF SECTION 40(A)(IA) OF THE ACT REQUIRING DISALLOWANCE. HE NCE, THE IMPUGNED ORDER IS IN NO WAY INFIRM REQUIRING ANY INTERFERENCE AND ACCORDINGLY, HE SOUGHT FOR UPHOLDING THE SAME BY DISMISSING THE APPEAL OF THE ASSESSEE. 5. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN THE LIGHT OF THE SUBMISSIONS OF THE LEARNED DR, IT IS FOUND THAT UNDISPUTEDLY THE ASSESSEE HAS PAID A SUM OF RS.1,65,000 AS RENT TO THE LAND LORD BUT AT THE SAME TIME THE ASSESSEE HAS NOT DEDUCTED THE TDS. HENCE, THE PROVISION APPLICABLE TO THE ISSUE IS SECTION194 - I OF THE I.T.ACT,1961, WHICH ENVISAGES THAT A NY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING A RESIDENT ANY INCOME BY WAY OF RENT , SHALL, AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MO DE, WHICHEVER IS EARLIER, DEDUCT INCOME - TAX THEREON. THUS, A PLAIN READING OF THE SAID SECTION CLEARLY INDICATES THAT THE OBLIGATION TO DEDUCT TAX AT SOURCE IS CAST UPON ASSESSEES NOT BEING INDIVIDUAL OR HUF. HERE IN THE PRESENT CASE, THE ASSESSEE IS AN I NDIVIDUAL BEING SRI DIPTI ITA NO.96/CTK/2010 3 PRASAD DAS AND HE HAS BEEN ASSESSED IN THE STATUS OF INDIVIDUAL AS IS EVIDENT FROM COL.6 IN THE TABULATION GIVEN IN THE ASSESSMENT ORDER. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT SECTION194 - I OF THE I.T.ACT IS NOT APPLICAB LE TO THE INSTANT CASE AND HENCE, SO ALSO SECTION 40(A)(IA) OF I.T.ACT. BUT FOR THE REASON BEST KNOWN TO THEM, THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) HAVE INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT AGAINST THE ASSESSEE FOR DISA LLOWANCE OF THE AFORESAID AMOUNT. FOR THE REASONS DISCUSSED ABOVE, WE ARE OF THE FIRM VIEW THAT THE IMPUGNED DISALLOWANCE MADE BY THE AUTHORITIES BELOW IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND AS SUCH, WE DELETE THE SAID DISALLOWANCE AND ALLOW THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN OPEN COURT ON DT. 17.06.2011 S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 17.06.2011 H.K.P ADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SRI DIPTI PRASAD DAS. 2MD F;PPR. 59 JANPATH, BHUBANESWAR 751 001, KHURDA, ORISSA, 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), BHUB ANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.