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Before: Shri Duvvuru RL Reddy & Shri S. Jayaraman
आयकर अपीलीय अिधकरण, ‘‘बी’’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI �ी धु�ु� आर.एल रे�ी, �ाियक सद� एवं �ी एस जयरामन, लेखा सद� के सम� Before Shri Duvvuru RL Reddy, Judicial Member & Shri S. Jayaraman, Accountant Member आयकर अपील सं./I.T.A.No.1417/Chny/2019 िनधा�रण वष�/Assessment Year:2013-14 The Income Tax Officer, M/s. Malar Energy & Infrastructure Corporate Ward 4(1), Vs. Pvt. Ltd., No. 57, Pantheon Road, Chennai 600 034. Egmore, Chennai 600 008. [PAN:AAGCM5674F] (अपीलाथ� /Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri A. Sundararajan, Addl. CIT ��थ� की ओर से/Respondent by : None सुनवाई की तारीख/ Date of hearing : 03.03.2020 घोषणा की तारीख /Date of Pronouncement : 13.03.2020 आदेश /O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 8, Chennai dated 30.01.2019 relevant to the assessment year 2013-14. The effective ground raised by the Revenue is that the ld. CIT(A) has erred in restricting the addition/disallowance made under section 40(a)(ia) of the Income Tax Act, 1961 [“Act” in short] with respect to the TDS default under section 194C and 194H of the Act to ₹.7,29,898/- instead of ₹.3,03,28,445/- by considering fresh evidence in violation of Rule 46A of the IT Rules.
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Brief facts of the case are that the assessee filed its return of income for the assessment year 2013-14 on 25.03.2015 declaring total income of ₹.44,42,310/-. The case was selected for scrutiny and after considering the details and submissions of the assessee, the assessment under section 143(3) of the Act was completed by assessing total income of the assessee at ₹.3,47,70,755/- after making various additions. On appeal, after considering the submissions of the assessee, the ld. CIT(A) restricted the disallowance made under section 40(a)(ia) of the Act with respect to the TDS default under section 194C and 194H of the Act to ₹.7,29,898/- instead of ₹.3,03,28,445/- and partly allowed the appeal of the assessee.
Aggrieved, the Revenue is in appeal before the Tribunal. By relying on the grounds of appeal, the ld. DR has submitted that by accepting fresh evidence, the ld. CIT(A) has restricted the disallowance made under section 40(a)(ia) of the Act in violation of Rule 46A of the IT Rules and pleaded that the matter may be remitted back to the file of the Assessing Officer for detailed verification. Despite service of notice [RPAD], none appeared on behalf of the assessee and hence we proceed to decide the appeal on merits after hearing the ld. DR.
We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. During the
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course of assessment, the Assessing Officer observed from the details furnished by the assessee that the assessee has not deducted TDS on various expenses claimed in the profit and loss account. It was further observed that relevant details of individual cases have not been furnished and in the absence of which, the liability to TDS and regulating the same under the provisions of section 40(a)(ia) of the Act for the appropriate disallowance could not be verified. Further, the Assessing Officer noticed that the advertisement charges, the car hire charges and other expenses categorized as falling under section 194C of the Act are reasonably higher than the threshold limit prescribed and the failed to furnish such details as to establish that the expenses prone to TDS under section 194C of the Act have not been incurred beyond the threshold limit. It was also observed that out of the labour charges of ₹.3,52,09,921/-, the assessee has deducted TDS for a sum of ₹.1,28,95,659/- and the balance expenses of ₹.2,23,14,262/- has been incurred without TDS and the reason put forth was below the threshold limits and not appearing to be the correct position. Despite the Department called for the details, the assessee has not furnished relevant bills, vouchers, books of account, contracts entered into with, in respect of construction of houses under the scheme of the Ministry of Housing and Urban Poverty Alleviation, Govt. of
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India for verification. Thus, various expenses incurred by the assessee to the extent of ₹.2,60,46,425/- was brought to tax.
4.1 Further the Assessing Officer observed that the assessee has paid a common of ₹.46,16,493/- vide column No. 22(ii) of the P&L account of ITR. When details called for at the time of scrutiny, the AR has filed the ledger copy of commission payment which is amounting to ₹.2,78,858 by stating that apart from this, no other commission was paid. When the assessee was asked whether TDS has been made on it, the AR of the assessee filed TDS chart for ₹.3,34,473/- with a TDS of ₹.33,447/- under section 194H of the Act. Thus, the difference of commission payments between the one as per the ITR (₹.46,16,493/-) and the figure furnished at the time of scrutiny proceedings (₹.3,34,473/-) was held as commission paid without effecting TDS and accordingly a sum of ₹.42,82,020/- was brought to tax. On appeal, after considering various submissions, vouchers maintained in respect of the expenses, the ld. CIT(A) restricting the addition/disallowance made under section 40(a)(ia) of the Income Tax Act, 1961 [“Act” in short] with respect to the TDS default under section 194C and 194H of the Act to ₹.7,29,898/- instead of ₹.3,03,28,445/- without obtaining any remand report from the Assessing Officer is in violation of Rule 46A of the IT Rules. Accordingly, we set aside the order of the ld. CIT(A) and remit the matter back to the file of the Assessing Officer examine the details
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as may be furnished by the assessee and decide the issue in accordance with law by affording an opportunity of being heard to the assessee. The assessee is also directed to furnish the complete details before the Assessing Officer as was furnished before the ld. CIT(A) for fresh adjudication.
In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced on the 13th March, 2020 at Chennai.
Sd/- Sd/- (S. JAYARAMAN) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, the 13.03.2020 Vm/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु� (अपील)/CIT(A), 4. आयकर आयु�/CIT, 5. िवभागीय �ितिनिध/DR & 6. गाड� फाईल/GF.