M/S JBR TECHNOLOGIES PVT. LTD.,LUDHIANA vs. ACIT, C-7, LUDHIANA

The present appeal has been preferred by the assessee against the order dated 20.02.2019 of the Commissioner of Income Tax (Appeals)-3, Ludhiana [hereinafter referred to as ‘CIT(A)’]

The sole issue raised by the assessee is regarding the confirmation of disallowance by the CIT(A) which was made by the Assessing Officer u/s 40(a)(ia) of the Income Tax Act, 1961 (in short -c-2019 M/s JBR Technologies Ltd, Ludhiana 2 'the Act') on account of non-deduction of tax deducted at source (TDS) on remuneration paid to the directors of the assessee company.

At the outset, the Ld. Counsel for the assessee has invited our attention to the amended provisions of section 201(1) and section 40(a)(ia) of the Act to state that as per the amendment made vide Finance Act, 2012, an assessee will not be treated as assessee in default u/s 201(1) of the Act on account of non-deduction of TDS on payment made to a resident, if such a resident has furnished his return of income and has taken into account such sum for computing income in such return of income and has paid the due taxes on the income declared by him in such return and further the assessee furnishes a certificate to this effect from an accountant. Further, that as per the amended provisions of section 40(a)(ia) of the Act, if the assessee is not deemed to be an assessee in default as per the provisions of section 201, then it shall be deemed that such an assessee has debited and paid the tax on such sum on the date of furnishing of return of income by resident payee. The Ld. counsel has submitted that the directors / payees in this case have taken the amount received into account and have furnished their returns of income and have paid due taxes thereupon. He has submitted that the assessee wants to furnish the requisite certificate in this respect which could not be furnished earlier due to some incapacity. The -c-2019 M/s JBR Technologies Ltd, Ludhiana 3 Ld. counsel, therefore, has submitted that the matter may be restored to the file of the Assessing Officer to produce the relevant evidence in this respect.

The Ld. DR has not objected to the same.

In view of the above, the impugned order of the CIT(A) is set aside and the matter is restored to the file of the Assessing Officer for verification of the contentions of the assessee that the remuneration paid to the directors have been taken into account by the said payee in their returns of income and due taxes paid as per the return of income and further a certificate of the accountant to this effect be furnished before the Assessing Officer as per the requirement of the relevant provisions. The Assessing Officer after consideration of the matter will decide the issue in accordance with law.