RYATAR SAHAKARI SAKKARE KARKHANE NIYAMIT,MUDHOL vs. THE INCOME TAX OFFICER, WARD- 2, BAGALKOT

PDF · subscribers
ITA 1544/BANG/2019Status: DisposedITAT Bangalore24 June 2020AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that both the AO and the CIT(A) had passed orders without properly addressing the assessee's explanations. Therefore, the Tribunal restored the issue to the AO for fresh examination.

What were the facts?

The assessee, a co-operative sugar mill, made substantial payments for harvesting and transport contractors, and legal/consultation charges without deducting tax at source. The Assessing Officer (AO) disallowed these payments under Section 40(a)(ia) of the Income Tax Act.

What were the issues?

Whether the disallowance of payments for non-deduction of TDS was justified without a proper examination of the assessee's explanations by the tax authorities.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES : “B”, BANGALORE

Before: SHRI N.V.VASUDEVAN & SHRI B.R.BASKARAN

For Respondent: Shri Muzaffar HUssain, CIT

Date of hearing : 24-06-2020 Date of pronouncement : 24-06-2020 O R D E R

PER B.R.BASKARAN, AM

1.

The assessee has filed this appeal challenging the order dated 19-03-2019 passed by Ld CIT(A), Hubbali and it relates to the assessment year 2012-13. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the disallowance made u/s 40(a)(ia) of the Act, 1961.

2.

None appeared on behalf of the assessee, even though the notice of hearing sent to the assessee by registered post was duly 2 acknowledged. Hence we proceed to dispose of the appeal ex- parte, without the presence of the assessee.

3.

We heard Ld D.R and perused the record. The assessee is a Co-operative Society and is engaged in the business of manufacture of sugar. During the course of assessment proceedings, the AO noticed that the assessee has made following payments without deducting tax at source:-

A) NON COMPLIANCE OF TDS U/S 194C – PAYMENT TO CONTRACTORS 1 Payments to 4,67,20,236 harvesting contractor 2 Payments to 15,98,878 harvesting contractor 3 Transport contractors 6,19,75,561 bill payments 4 Transport contractors 17,10,960 11,20,05,635 bill payments B. NON COMPLIANCE OF TDS U/S 194J PROFESSIONAL CHARGES 1 Legal & consultation 2,27,1520 22,71,520 charges Total payments made without making TDS(A+B) 11,42,77,155 On being questioned, the assessee furnished its reply, which has been extracted by the AO at page 3 of the assessment order. However, the AO disallowed the above said payments aggregating to Rs.11.42 crores u/s 40(a)(ia) of the Act by observing that the assessee did not deduct tax at source from the above said payments.

4.

The assessee challenged the above said addition by filing appeal before Ld CIT(A). When the notice of hearing was sent by Ld CIT(A) to the assessee, it took adjournments from time to time on the reasoning that an identical issue is pending before the Hon’ble Supreme Court. Hence the Ld CIT(A) disposed of the 3 appeal ex-parte, confirming the disallowance made by the AO. Aggrieved, the assessee has filed this appeal before the Tribunal.

5.

The Ld D.R supported the order passed by tax authorities. However, on a perusal of the order passed by Ld CIT(A), we notice that the first appellate authority has passed the order ex-parte. Similarly, on perusal of the assessment order, we notice that the assessing officer did not address any of the explanations furnished by the assessee, even though he has extracted gist of explanations in the assessment order and the letter dated 11.08.2014 furnished by the assessee to the AO was made part of assessment order.

6.

Under these set of facts, the Bench proposed to restore the issue to the file of assessing officer for examining the issue afresh. The Ld D.R also accepted to the same. Accordingly, we set aside the order passed by Ld CIT(A) and restore the impugned issue to the file of the AO for examining it afresh by duly considering and also addressing the explanations furnished by the assessee. We also make it clear that the assessee should be given adequate opportunity of being heard. After hearing the assessee, the AO may take appropriate decision in accordance with law.

7.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced on 24-06-2020.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Latest GST High Court judgments

Search GST case law →