ANIL KUMAR,NALANDA vs. ITO, WARD- 2 (3), BIHARSHARIF

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ITA 361/PAT/2023Status: DisposedITAT Patna03 October 2024AY 2014-155 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal in the interest of justice. The Tribunal held that the Rs. 1,44,000/- was salary paid to an accountant, not professional/technical fees, and thus no TDS was deductible under Section 194J.

What were the facts?

The assessee's appeal was delayed by 46 days. The assessee claimed ignorance of the CIT(A)'s order due to lack of technological understanding. The appeal concerns a disallowance of Rs. 1,44,000/- for alleged non-deduction of TDS on accountancy charges.

What were the issues?

Whether the CIT(A) erred in upholding the disallowance of Rs. 1,44,000/- under Section 40(a)(ia) for non-deduction of TDS on accountancy charges, and whether the payment constituted salary or professional/technical fees.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 40(a)(ia),Section 194J,Section 192

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH, PATNA

Before: SHRI RAJPAL YADAV & SHRI DR. MANISH BORAD

For Appellant: Shri AK Rastogi, Sr. Adv
Hearing: 12.09.2024Pronounced: 03.10.2024

आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER:

1.

The captioned appeal filed by the assessee is directed against the order of National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 30.05.2023, which is arising out of the assessment order u/s 147 read with section 144B of the Income-tax Act, 1961 (the Act) dated 22nd August, 2021, framed by Income Tax officer, NFAC.

2.

The registry has informed that the appeal is time barred by 46 days. The assessee had filed an application for condonation of delay. Perusal of the same indicates that the assessee did not came to know about the impugned order as he is not well versed with the technology advancement about the notices of hearing given through mails. When the

3.

The assessee has raised following grounds of appeal:-

“For that the Ld. CIT(A) has erred in holding that the appellant has sought adjournment on one pretext or the other and is not interested in making any submission in response to various grounds of appeal raised by him.

2. For that the Ld. CIT(A) has erred in recording an incorrect finding of non- submission of ground-wise written submission whereas the fact remains that the appellant has uploaded the ground-wise written submission way back on 19/05/2023 and much before the date of compliance on 22/05/2023 in response to notice dated 15/05/2023.

3. For that the Ld. CIT(A) has erred in holding that Ground No.1, 3, 4, 5, 7, 9, 12, 14 & 15 are general in nature and does not require any separate adjudication especially considering the fact that the appellant has not furnished any submission in support of the grounds and therefore, thse grounds remained unsubstantiated.

4. For that the Ld. CIT(A) has erred in holding that the AO has given proper opportunity of being heard and that the appellant has not availed the opportunity so granted and there is no violation of principles of natural justice on the part of the Assessing Officer.

5. For that the Ld. CIT(A) has erred in affirming the initiation of proceedings u/s 147/148 of the Act by the Assessing Officer and accordingly dismissed the grounds assailing the very reopening of assessment.

6. For that the Ld. CIT(A) has erred in relying on judgments for upholding the initiation of proceedings u/s 147/148 that too without confronting the appellant with the same.

7. For that the Ld. CIT(A) has erred in holding that there has been escapement to the extent of Rs. 1,44,000/- in the original assessment proceedings in view of Section 40(a)(ia).

8. For that the Ld. CIT(A) has erred in holding that the appellant has not fulfilled his obligation in view of judgment of Apex Court in the case of GKN Driveshaft and therefore, the question of its non-compliance on the part of the AO does not arise.

9. For that the Ld. CIT(A) has erred in holding that in absence of any proof of deduction of tax on payment of Rs.1,44,000/- under the head 'Accounting Charges'

5.

On the other hand, the ld. DR supported the orders of the lower authorities.

6.

We have heard the rival contentions and perused the materials available on record. We observe that the assessee is an individual running a sole proprietorship concern in the name of M/s Raj Trading Company and is engaged in the business of trading of potatoes and onions on wholesale basis income declared of ₹466470/- in the return for A.Y. 2014- 15 furnished on 27th November, 2014. Case of the assessee was selected for scrutiny and assessment completed u/s 143(37 of the Act on 29th December, 2016 assessing income at ₹5,66,470/-. Subsequently, the ld. Assessing Officer based on the reason to believe that ₹1,44,000/- debited

7.

We observe that the assessee has paid salary to his accountant at the rate of 12,000/- per month. We failed to find any merit in the action of ld. AO who has treated the salary as professional and technical fee. As the assessee had paid a salary to its accountant and the total sum paid as a salary is below the taxable limit, there was no liability to deduct the tax at source u/s 192 of the Act. Therefore, since the alleged sum of ₹1,44,000/- is a salary expenditure and not a payment towards Professional or Technical Services, no disallowance was called for u/s 40(a)(ia) of the Act for non-deduction of tax at source u/s 194J of the Act. We therefore, set aside the finding of ld. CIT (A) and delete the impugned disallowance of ₹1,44,000/- and allow, the effective ground of appeal raised by the assessee is allowed.

8.

In the result, the appeal of the assessee is allowed.

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