NARAYAN DASS (DECEASED) THROUGH LEGAL HEIR SON MANOJ KUMAR,KAITHAL vs. ITO, KAITHAL

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ITA 181/DEL/2018Status: DisposedITAT Delhi29 January 2020AY 2007-084 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that individual payments of commission were below Rs. 2,500/-, the threshold for TDS under Section 194H. Therefore, the assessee was not liable for TDS on these payments.

What were the facts?

The assessee paid Rs. 18,21,221/- as commission. The CIT invoked Section 263, holding that tax deduction at source under Section 194H was required as the total commission exceeded Rs. 2,500/-. The AO made the addition, which was upheld by the CIT(A).

What were the issues?

Whether the disallowance of commission paid was justified when individual payments were below the TDS threshold, and whether interest under Section 234B was leviable.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194H,Section 263,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: MS. SUSHMA CHOWLA

Hearing: 02.12.2019Pronounced: 29.01.2020

आदेश / ORDER आदेश आदेश आदेश

PER SUSHMA CHOWLA, VP The present appeal filed by assessee is against order of CIT(A), Karnal dated 15.12.2017 relating to assessment year 2007-08 against order passed under section 143(3)/263 of the Act.

2.

The limited issue which is raised in the present appeal is against the addition of Rs. 18,21,221/- by invoking the provisions of section 40(a)(ia) of the Act.

3.

Briefly in the facts of the case, the Commissioner invoked his jurisdiction under section 263 of the Act and vide order dated 13.03.2012 noted that the assessee had paid a sum of Rs. 18,21,221/- as commission to different parties. He was of the view that since the commission exceeded prescribed limit, there was requirement to deduct tax at source under section 194H of the Act and since the assessee had not deducted tax at source, the said amounts were disallowable in the hands of the assessee. The plea of the assessee that the payments were below Rs. 2,500/- was noted and the matter was remanded to the AO to carry out necessary enquiries in this regard. The assessee furnished the details of commission paid to various persons and the details were furnished on 123 pages. However, the same were not accepted and addition was made in the hands of the assessee which was upheld by the CIT(A). The assessee is in appeal against the same.

4.

On the perusal of record and after hearing both the authorized representatives, we find that the alleged commission totaling Rs. 18,21,221/- had been paid to different parties and the details were furnished at pages totaling 123. The perusal of the details reflects the payments being made to different persons and none of the payment was more than Rs. 2,500/-. The requirement of section 194H of the Act is where commission is paid exceeding Rs. 2,500/-, then there is requirement for tax deduction at source. However, in the absence of the same, the assessee cannot be held liable for tax deduction at source.

1.

Accordingly, we delete the aforesaid addition of Rs. 18,21,221/-. The ground of appeal raised by the assessee in this regard is thus allowed.

5.

The next ground of appeal regarding charging of interest under section 234B of the Act is consequential and hence the same is dismissed.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 29th January 2020.

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