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Income Tax Appellate Tribunal, CAMP BENCH AT JALANDHAR
Before: Sh. N. K. Saini, Hon’ble & Sh. Ravish Sood
IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR Before Sh. N. K. Saini, Hon’ble Vice President and Sh. Ravish Sood, Judicial Member ITA No.425/Asr./2018 : Asstt. Year : 2013-14 M/s Millennium Wires Pvt. Vs Deputy Commissioner of Income Tax, Ltd., D-30, Focal Point, Central Circle-II, Jalandhar Jalandhar (APPELLANT) (RESPONDENT) PAN No. AACCM9631J Assessee by : Sh. Sandip Vijh, CA Revenue by : Sh. Ved Pal Singh, DR Date of Hearing : 07.01.2019 Date of Pronouncement : 08.01.2019
ORDER Per N. K. Saini, Vice President: This is an appeal by the assessee against the order dated 18.05.2018 of ld. CIT(A)-5, Ludhiana.
The only ground raised in this appeal reads as under:
“1. The Learned Commissioner of Income Tax(Appeals), has erred in sustaining the disallowance of Rs.12,40,000/- in respect of payments for which TDS had not been deducted. The submissions made have not been appreciated.” 3. Facts of the case in brief are that the AO during the course of assessment proceedings noticed that the audit report revealed that the auditor had mentioned, the assessee did not deduct TDS on the payment made to advocates totaling to Rs.12,40,000/-. The AO
ITA No. 425/Asr./2018 2 Millennium Wires Pvt. Ltd. asked the assessee to explain the details of the legal expenses and show-cause as to how the same was allowable expenses as no TDS was deducted. In response, the assessee submitted that it was not deemed to be an assessee in default and that the expenditure was eligible for deduction. The AO, however, did not find merit in the submission of the assessee by observing that the assessee had not furnished a certificate given to it by the Chartered Accountant of the recipient in Form No. 26A in accordance with Rule 31ACB of the Income Tax Rules. According to him, the assessee had not deducted TDS on the fees for professional services u/s 194J of the Income Tax Act, 1961 (hereinafter referred to as the Act). He, therefore, made the disallowance of Rs.12,40,000/- u/s 40(a)(ia) of the Act.
Being aggrieved the assessee carried the matter to the ld. CIT(A) who sustained the addition by observing that there was no denial that the assessee was required to deduct TDS on fees paid for professional services u/s 194J of the Act but no TDS was deducted, therefore, the provisions of Section 40(a)(ia) of the Act were rightly attracted in this case. He accordingly confirmed the addition made by the AO.
Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the deductees had already paid the tax, therefore, no disallowance could have been made u/s 40(a)(ia) of the Act. He requested to set aside this issue to the file of the AO for verification and if it is found that the deductees had already paid the tax, no disallowance could have been made.
ITA No. 425/Asr./2018 3 Millennium Wires Pvt. Ltd. 6. In his rival submissions, the ld. DR although supported the orders of the authorities below but could not controvert the contention of the ld. Counsel for the assessee.
We have considered the submissions of both the parties and perused the material available on the record. In the present case, the facts as to whether the deductees had already paid the tax and the Chartered Accountant had certified in Form No. 26A needs verification at the level of the AO. We, therefore, set aside this issue to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 08/01/2019)
Sd/- Sd/- (Ravish Sood) (N. K. Saini) JUDICIAL MEMBER VICE PRESIDENT Dated: 08/01/2019 *Subodh* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR