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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO& SHRI D.S. SUNDER SINGH
आदेश /O R D E R PER D.S. SUNDER SINGH, Accountant Member: This appeal is filed by the assessee against the order of the Pr.Commissioner of Income-Tax (Pr.CIT)-1, Visakhapatnam vide F.No.Pr.CIT-1/VSP/263/2016-17 dated 27.13.2017 for the assessment year 2008-09.
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The assessee filed return of income admitting total income of Rs.3,85,720/-. The assessment was completed u/s 143(3) on total income of Rs.5,58,941/-. Subsequently, the Assessing Officer (AO) issued notice u/s 148, and reopened the assessment u/s 147 and completed the reassessment u/s 143(3) r.w.s. 147 on 23.03.2015 by making the addition of Rs.1,44,139/-. The Ld. Pr.CIT has taken up the assessment order passed u/s 143(3) r.w.s.147 dated 23.03.2015 for revision u/s 263 and observed that the assessee made the contract payments/credited amounts in excess of Rs.50000/- in aggregate to a single party / single lorry and attract the provisions of TDS and consequent disallowance u/s 40(a)(ia) but the AO has not examined the applicability of TDS as per proviso to Section 194(C)(5) of the I.T.Act. The Pr.CIT quantified such amount of payments made at Rs.39,01,357/- as per the order u/s 263 and issued show cause notice to the assessee as to why the assessment u/s 143(3) dated 23.03.2015 should not be revised u/s 263 of I.T.Act. In response to the notice, the assessee filed his explanation stating that the assessee has not deducted the TDS on payment made to sub- contractors in all the cases, where aggregate payments were Rs.50,000/- and above in a single year to a single lorry owner on furnishing From No.15-I from the lorry owners and argued that in view of the second proviso to section 194C(3)(i) of the
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I.T.Act r.w.r. 29D of IT Rules, the assessee is not obliged to deduct the TDS and accordingly disallowance do not attract in the assessee’s case. The Ld.Pr.CIT examined the explanation of the assessee and observed that the assessee has not furnished the evidence such as copies of the said form-15I, names and details of the parties from whom such declarations were stated to have been obtained either before the AO or before the Jurisdictional Pr.CIT. As per sub rule 4 of 29D of Income Tax Rules, the assessee being a contractor, responsible for paying and crediting the sums to sub contractors has to furnish all such details of sub contracts from whom 15-I was received to the jurisdictional Pr.CIT on or before 30th June of the subsequent financial year in Form No.15J prescribed for the said purpose. Since the assessee failed to adduce any evidence regarding the submission of form 15J and in the absence of any evidence to support that the assessee had obtained From 15-I, the Ld.Pr.CIT held that proviso to section 194C sub section 3, clause(i) of the Act r.w.Rule 29D is not applicable in the assessee’s case. Accordingly, the Pr.CIT held that the payment of Rs.39,01,357/- which did not suffer tax at source u/s 194C of I.T.Act require to be disallowed u/s 40(a)(ia) of I.T.Act. Accordingly held that the assessment made u/s 143(3) r.w.s. 147 was erroneous and prejudicial to interest of the revenue and directed the AO to modify the assessment
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order by disallowing the expenditure to the extent of Rs.39,01,357/- claimed as lorry payments u/s 40(a)(ia) of I.T.Act.
Aggrieved by the order of the Ld.Pr.CIT, the assessee is in appeal before us. During the appeal hearing, the Ld.AR submitted that the AO has completed the assessment after making the detailed enquiries and after proper appreciation of the facts hence taken a conscious decision and the Ld.Pr.CIT is incorrect in invoking the jurisdiction u/s 263 of I.T.Act. Ld.AR further submitted that the assessee has not obliged comply with the provisions of Section 194C and accordingly disallowance u/s 40(a)(ia) is unwarranted. Ld.AR also submitted that second proviso to section 40(a)(ia) of I.T.Act is applicable in the assessee’s case, hence no disallowance is warranted. Accordingly requested to set aside the order of 263 and restore the assessment order.
On the other hand, Ld.DR supported the orders of the Ld.CIT.
We have heard both the parties and perused the material placed on record. In this case, the Pr.CIT has invoked the section 263 of I.T.Act and taken up the case for revision u/s 263 for the AO’s failure to examine the
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deductibility of tax u/s 194C in respect of payments made to a single party or a single lorry owner in a year exceeding Rs.50,000/-. As per proviso to section 194C, sub section 5, TDS is applicable in case of payment of Rs.50,000/- and above in a year to single lorry or single party. The assessee had incurred such expenditure of Rs.39,01,357/- on which TDS was not made. The assessee in his explanation submitted that he did not make the TDS and obtained the Form 15-I from the lorry owners and accordingly argued that proviso to section 194C(3)(i) of I.T.Act r.w.Rule 29D of I.T.Rules is applicable. However, as per Sub Rule 4 of 29D, the assessee is required to submit the details of the sub contractors from whom he has received Form 15-I and submit before the jurisdictional Commissioner of Income Tax on or before 30th June of following financial year in Form 15-J prescribed for the said purpose. The assessee has not furnished the details and also did not file From 15-J before the Pr.CIT. The assessee did not furnish the From 15-I stated to have obtained from the various beneficiaries at the time of revision proceedings before the Pr.CIT also. Though the Ld.AR argued that in the assessee’s case, second proviso to section 40(a)(ia) of I.T.Act is applicable, the Ld.AR did not furnish any evidence to establish that beneficiaries have filed the return of income admitting the payments made by the assessee. Similarly, though the Ld.AR
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argued that the assessee is not obliged to deduct TDS u/ s194C, no evidence or material placed before us to substantiate his arguments. On verification of the assessment order it is evident that the Ld.AO has not examined the issue with regard to deducibility of tax in case of payments exceeding 50,000/- per party or single lorry. The AR also did not adduce any evidence to prove that AO has examined the issue at the time assessment proceedings. In view of the foregoing facts we do not find any reason to interfere with the order of the Ld.Pr. CIT, accordingly, we uphold the same and dismiss the appeal of the assessee.
In the result, appeal of the assessee is dismissed.
The above order was pronounced in the open court on 18th Apr, 2018.
Sd/- Sd/- (िी.दुगाा राि) (डड.एस. सुन्दर ससंह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याययक सदस्य/JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER ववशधखधऩटणम /Visakhapatnam ददनधंक /Dated :18.04.2018 L.Rama, SPS
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आदेश की प्रनतलऱवऩ अग्रेवषत/Copy of the order forwarded to:- 1. अपीलाथी / The Appellant- Ghanshyam Sharma, Jakhal Vill & Post, Jhunjhunu District, Rajasthan – 333 305 2. प्रत्यधथी / The Respondent-The Principal Commissioner of Income Tax-1, Visakhapatnam 3. The Joint Commissioner of Income Tax, Range-1, Visakhapatnam 4. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण , ववशधखधऩटणम / DR, ITAT, Visakhapatnam 5.गधर्ाफ़धईऱ / Guard file आदेशधनुसधर / BY ORDER // True Copy //
Sr. Private Secretary ITAT, VISAKHAPATNAM