TAPAN KUMAR DUTTA,KOLKATA vs. ITO, WARD 2(4), ASANSOL

At the outset, it is noted that there is a delay of 81 days on the part of the assessee in filing this appeal before the Tribunal. In this regard, the assessee has filed an application seeking condonation of the said delay and keeping in view the reasons given therein, I am satisfied that there was a sufficient cause for the delay of 81 days on the part of the assessee in filing this appeal before the Tribunal. Even the ld. D.R. has not raised any objection in this regard. The delay of 81 days on the part of the assessee in filing this appeal before the Tribunal is, therefore, condoned and this appeal of the assessee is being disposed of on merit.

The assessee has raised the following grounds in this appeal:- “(1)(a) For that the ld. CIT(A) was not justified in confirmi.ng the addition of Rs.37,306/- made by the A.O. on the ground that the contractual receipts did not tally with those shown in the Profit & Loss Account.

At the time of hearing before the Tribunal, the ld. Counsel for the assessee has not pressed Ground No. 1. The same is accordingly dismissed as not pressed.

As regards the issue raised in Ground No. 2 relating to the disallowance made under section 40(a)(ia), the relevant facts are that the assessee is an individual, who is engaged in the business of transportation. The return of income for the year under consideration was filed by him on 30.09.2011 declaring total income of Rs.4,83,540/-. As noticed by the Assessing Officer during the course of assessment proceedings, the assessee had made payment towards truck hire charges to two parties, namely Sharma Transport Agency and Kaushik Sengupta aggregating to Rs.24,63,716/- without deducting tax at source. In this regard, it was submitted on behalf of the assesese that the Permanent Account Numbers of the said two parties were obtained by him and, therefore, the tax at source was not liable to be deducted from the payment of truck hire charges made to them. The Assessing Officer, however, found that the said details regarding the PANs of the concerned

The disallowance made by the Assessing Officer on account of truck hire charges under section 40(a)(ia) was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and the following submission was made on behalf of the assessee before the ld. CIT(Appeals) in support of the assessee’s case on this issue:- “Addition Rs. 24,63,716/-: The A.O. noticed that a sum of Rs.21,92,916/- was paid to Sharma Transport Agency and a sum of Rs.2,70,800/- was paid to Kowsik Sengupta on account of truck hire charges. As these persons furnished their permanent account number, the assessee did not deduct tax at source.

The ld. CIT(Appeals) did not find merit in the submission made on behalf of the assessee and confirmed the disallowance made by the Assessing Officer under section 40(a)(ia) for the following reason given in his impugned order:-

I have heard the arguments of both the sides and also perused the relevant material available on record. As agreed by the ld. Representatives of both the sides, the issue involved in Ground No. 2 on the assessee’s appeal relating to the disallowance under section 40(a)(ia) is squarely covered in favour of the assessee, inter alia, by the decision of Division Bench of this Tribunal in the case of Kali Kinkar Roy –vs.- ITO rendered vide its order dated 31.01.2017 in ITA No. 1676/KOL/2016, wherein a similar disallowance made under section 40(a)(ia) was deleted by the Tribunal for the following reasons given in paragraph no. 8 & 9 of its order:- “8. Heard rival submissions and perused the material available on record. It is an admitted fact that since all the payees submitted their Permanent Account Numbers in the assessment proceedings. The provision contemplated in Sec 194C(6) permits no deduction of TDS shall be made u/s. 194C( 1) if the payee furnishes PAN to the payer. We find that the requirement of Section 194C(6) of the Act submission of Permanent Account Number which enable the payer from no deduction of TDS. The finding of the AO was that the Permanent Account Numbers furnished cannot be accepted as it was not filed with the appropriate authority as required u/s. 194C(7) of the Act and whether such failure attracts and invokes the jurisdiction under Section 40(a)(ia) of the Act. At this juncture, we may refer the order of Coordinate Bench of this Tribunal which held that provisions of section 194C(6) and section 194C(7) are independent to each

As the issue involved in the present case as well as the material facts relevant thereto are similar to the case of Kali Kinkar Roy (supra), I respectfully follow the decision rendered by the Division Bench of this Tribunal in the said case and delete the disallowance made by the Assessing Officer under section 40(a)(ia) and confirmed by the ld. CIT(Appeals). Ground No. 2 of the assessee’s appeal is allowed.

In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on January 28, 2021.