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

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ITA 22/CTK/2019Status: DisposedITAT Cuttack27 January 2020AY 2014-156 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred by admitting additional evidence (Form 26A) without giving the Assessing Officer an opportunity to examine and rebut it, violating Rule 46A of the IT Rules. The matter was set aside for a fresh order.

What were the facts?

The Assessing Officer disallowed expenses for sub-contract works for not deducting TDS. The assessee submitted a Form 26A belatedly before the CIT(A), who deleted the disallowance. The Revenue appealed against the CIT(A)'s order.

What were the issues?

Whether the CIT(A) was justified in admitting additional evidence without providing the AO an opportunity to examine it. Whether the disallowance under Section 40(a)(ia) was correctly deleted based on the belatedly filed Form 26A.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM

For Respondent: Shri J.K.Lenka, DR, Shri B.Tripathy, AR
Hearing: 24/12/2019Pronounced: 27/01/2020

course of appellate proceeding, the impugned order passed by the CIT(A) fails and deserves to be dismissed.

6.

On the other hand, ld. AR relied on the order of CIT(A) and 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.

7.

After hearing both the sides and perusing the entire material on 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

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 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.

8.

In the result, appeal of the Revenue is allowed for statistical 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

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