DCIT, CIRCLE-1(1), CUTTACK vs. M/S. H.L.INFRASTURE, KEONJHAR

per the said Rule 31ACB, the certificate in Form No.26A should be

furnished to the DGlT(System) or the person authorised by the

DGIT(System) in accordance with the specified procedures, formats

and standards and not before the C1T(A). Since the Form No.26A has

not been filed before the DGIT(System), the assessee did not deserve

any relief on this issue. Therefore, ld. DR submitted that the AO has

rightly made disallowance of expenses made under the head 'sub-

contract works' in contravention of provisions of section 40(a)(ia)

r.w.s. 194C of the IT. Act, 1961 in absence of any corroborative

4 ITA No.22/CTK/2019 evidence produced during the course of assessment proceeding.

Accordingly, ld. DR submitted that without providing any opportunity

to AO to verify the additional evidence filed by the assessee during the

course of appellate proceeding, the impugned order passed by the

CIT(A) fails and deserves to be dismissed.

submitted that since the assessee is not deemed to be an assessee in

default under the first proviso to sub-section (1) of section 201 of the

I.T.Act, 1962, the for the purposes of section40(a)(ia) of the Act also it

shall be deemed that the assessee has deducted and paid the tax on

such income and therefore, no disallowance u/s.40(a)(ia) is warranted.

Accordingly, ld. AR submitted that the appeal of the Revenue deserves

to be dismissed and the addition deleted by the CIT(A) may kindly be

upheld.

record along with the observations made by both the authorities below

in their respective orders, we find that the AO on perusal of the ledger

account of the assessee found that the assessee has not deducted tax at

source from the credits/payments made to the parties, accordingly, he

made disallowance u/s.40(a)(ia) of the Act. Before the CIT(A) the

assessee furnished a certificate from his accountant in the prescribed

Form 26A, certifying that the amount of Rs.1,70,40,107/- paid to Shri

5 ITA No.22/CTK/2019 Satyendra Kumar Mishra by the assessee has been taken into account

of by Shri Satyendra Kumar Mishra while computing his taxable income

for A.Y.2014-2015, on the basis of which the CIT(A) observed that the

assessee is not in default in respect of Section 201(1) of the Act deemed

to have deducted and paid the tax on the amount in question to Shri

Satyendra Kumar Mishra by virtue of the second proviso to section

40(a)(ia) of the Act. Accordingly, the CIT(A) deleted the disallowance

made by the AO u/s.40(a)(ia) of the Act. Now, before us, the contention

of the ld. DR is that when the assessee has filed additional evidence i.e.

Form No.26A before the CIT(A), it was the duty of the CIT(A) to provide

an opportunity to AO for examination of the evidence so filed by the

assessee for the first time in the appellate proceedings to avoid

violation of provisions of Rule 46A of the I.T.Rules, 1962. On perusal of

the assessment order, we do not find any mention by the AO that the

assessee has produced above evidence during the course of assessment

proceedings. Considering the above facts and circumstances of the case,

we are in agreement with the contention of ld. DR that definitely the AO

has deprived of opportunity to verify and examine the additional

evidence on which basis the CIT(A) has deleted the addition, which

amounts to violation of Rules 46A of the I.T.Rules, 1962. In view of the

above, we set aside the impugned order and direct the CIT(A) to pass a

fresh order after giving due opportunity to the AO. Needless to say, the

6 ITA No.22/CTK/2019 assessee shall be given reasonable opportunity of being heard.

Accordingly, we allow the ground No.1 raised by the Revenue for

statistical purposes. Since we have set aside the matter to the file of

CIT(A) for fresh order, other grounds on merit are not adjudicated

upon.

purposes.

Order pronounced in the open court on 27/01/2020.

Sd/- Sd/- (C.M.GARG) (L.P.SAHU) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 27/01/2020 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीऱाथी / The Appellant- 1. DCIT, Circle-1(1), Cuttack प्रत्यथी / The Respondent- 2. M/s H.L. Infrastructure, Salapada, Ghastipur, Keonjhar-758020 आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. ववभागीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, 5. Cuttack गार्ा पाईऱ / Guard file. 6. सत्यावऩत प्रनत //True Copy// आदेशािुसार/ BY ORDER,

(Senior Private Secretary) ITAT Cuttack Bench, Cuttack