M/S. AQUA TRANSLINERS PVT. LTD.,KOLKATA vs. DCIT, CIRCLE - 9(1), KOLKATA

- This assessee’s appeal for assessment year 2013-14 arises against the Commissioner of Income Tax (Appeals)-3, Kolkata’s order dated 11.10.2018 passed in case No.CIT(A)- Kolkata-3/10471/16-17 involving proceedings 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex parte. The case is now taken up for hearing on merits.

With the able assistance of learned departmental representative, we notice that the assessee’s sale substantive grievance to that that the CIT(A) has affirmed the Assessing Officer’s action disallowing interest payment of ₹56,74,027/- as well as Assessment Year 2013-14 M/s Aqua Transliners Pvt. Ltd. Vs DCIT, Cir-9(1), Kol. Page 2 audit fees of ₹31,346/- on account of deposit of TDS already deducted within the specified time period as under:- “3. OBSERVATINS AND DECISION: The only issue in this case is the disallowance made by the Assessing Officer us 40(a)(ia) of Rs.5705463/-. The Assessing Officer has observed in the assessment order that tax at source was deductable on the interest payment of Rs.5674027/- u/s. 194A and on the audit fees paid of Rs.31346/- u/s 194J. No documentary evidences regarding the payment, of the tax deducted at source, into the government account was furnished before the Assessing Officer and accordingly he disallowed the said sum of Rs.5705463/- u/s40(a)(ia). Before me the Authorised Representative of the appellant contended that the interest amount of Rs.5674027/- disallowed pertained to earlier previous year i.e. for the F.Y 2011-12 and that the said amount cannot be disallowed in respect to the current previous year i.e. 2012- 13. I have gone through the submissions of the assessee and the findings of the Assessing Officer carefully. The basic facts are that during the previous year the appellant company has claimed to have paid interest of Rs.5674027/- and audit fees of Rs.31436/-.The Authorised Representative of the ape vide order sheet noting dated 11/10/2018 has stated the following:- 1) The tax at source, on the interest payment of Rs.5674027/-, was deducted by the appellant of Rs.567403/- on 31/03/2012. The due date for the payment of the above tax deducted at source into the Government Account was 30/04/2012. It has been admitted by the Authorised Representative of the appellant that the said payment was not made into the Government account by the due date i.e. 30/04/2012. 2) Similarly it has been stated by the Authorised Representative of the appellant that tax of Rs.31/04/2012 was deducted at source on the Audit fees paid by the appellant of Rs.31436/-. Further it has been admitted by the Authorised Representative of the appellant that the above tax deducted at source was not deposited in the Government account by the due date i.e. 30/04/2012. On perusal of the above it can be seem that the appellant has duly deducted tax at source, as admitted by the Authorised Representative, on the interest payment of Rs.5674027/- and on audit fees of Rs31436/-. It is an admitted position that tax was deducted on 31/03/2012 and the due date for deposit of the tax in the Government Account was 30/04/2012. It has been admitted before me that though the tax was deducted it was not deposited in respect to the Government account. One legal argument taken by the Authorised Representative of the appellant is that since the sum on which 40(a)(ia) disallowance has been made pertained to F.Y 2011-12 no disallowance in A.Y 2013-14 should be made under 40(a)(ia). In this regard my observation is that on the interest payment and audit fees payment for the F.Y 2011-12 the appellant had duly deducted tax on 31.03.2012. Therefore there was no default of non- deduction u/s. 40(a)(ia) in the previous year 2011-12. Having deducted the tax the appellant was required to make payment of the said sum in the Government Account by the due date i.e. 30/04/202. However the appellant has failed to deposit this sum in the Government account by the due date. Therefore the default u/s. 40(a)(ia) is of not depositing the tax amount in Govt. account and it took place, after the lapse of the due date, i.e. on 30/04/2012 which falls in the previous year 2012-13 and hence the disallowance u/s. 40(a)(ia) is required to be made in A.Y 2013-14. As admitted by the Authorised Representative the TDS amount has not been deposited in the Government account therefore the disallowance made by the Assessing Officer u/s. 40(a)(ia) is hereby confirmed. However as per the first proviso of section 40(a)(ia) as and when this payment is made by the appellant into the Government Account the deduction would be allowable in the A.Y relating to the previous year of payment.”