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Facts
The assessee's appeal for AY 2018-19 arose from an order invoking Section 40(a)(ia) disallowance of Rs.4,08,417/- for failure to deduct TDS on freight and clearing charges. The lower authorities made this disallowance.
Held
The Tribunal found no reason to sustain the impugned disallowance because the lower authorities' findings did not specifically discuss whether the recipients were taxable in India. Therefore, the disallowance was deleted.
Key Issues
Whether disallowance under Section 40(a)(ia) is sustainable when the lower authorities failed to establish the taxability of the recipients in India.
Sections Cited
143(3), 40(a)(ia)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2018-19 Touche Digital Pvt. Ltd., Vs Income Tax Officer, A-5, Chottey Lal Park, Opp. Bank of Ward-25(3), India, Kirti Nagar, New Delhi-110002 New Delhi-110015 (APPELLANT) (RESPONDENT) PAN No. AAECT4378D Assessee by: None Revenue by : Sh. Yogeshwar Sharma, Sr. DR Date of Hearing: 15.05.2025 Date of Pronouncement: 15.05.2025 ORDER
This assessee’s appeal for Assessment Year 2018-19, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1071543825(1) dated 24.12.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
It emerges during the course of hearing with the able assistance coming from the Revenue side represented by learned departmental representative Sh. Yogeshwar Sharma, both the lower authorities herein have invoked section 40(a)(ia) disallowance; as the case may be, in the assessee’s Touche Digital Pvt. Ltd. case to the tune of Rs.4,08,417/- after holding it not to have deducted TDS on freight & clearing charges etc., involving varying sums, paid to five parties in question.
The Revenue vehemently argues that the impugned disallowance has been rightly made in the assessee’s hands on account of it’s failure in not ensuring compliance to above TDS deduction provision.
I have given my thoughtful consideration to the assessee’s pleadings all along and the Revenue’s foregoing vehement submissions. I find no reason to sustain the impugned disallowance. This is for the precise reason that there is not even a specific discussion in either of the learned lower authorities’ respective findings holding the corresponding recipients as taxable in India, so as to attract TDS deduction going by GE India Technology Centre vs. CIT (2024)469 ITR 389 (SC). That being the case, I hereby deleted the impugned disallowance in very terms.