SHIVAMOGGA DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETY UNION LIMITED,SHIVAMOGGA vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, SHIVAMOGGA

The assessee has raised the following grounds of appeal:

Brief facts of the case are that the assessee is a co- operative society engaged in purchase and sale of milk and milk products and filed the Return of income electronically on 29/09/2013 with total income of Rs.1,00,99,240/- and the Return of income was processed u/s 143(1). Subsequently, the case was selected for scrutiny and notice u/s 143(2) of the Act was issued. In compliance, the learned AR appeared from time to time and filed details. On verification of financial statements, it was found that the assessee has debited Rs.15,25,51,536/- under the head ‘processing and manufacturing expenses’. In particular, AO found that the assessee has filed the details by letter dated 29/3/2016 in respect of non-applicability of provisions of section 194C. AO was not satisfied with the explanation and found that the assessee has violated the provisions of section 194C(6) as no TDS was deducted and the Page 4 of 5 same was disallowed and assessed the total income of Rs.16,26,50,780/- vide order dated 31/3/2016.

Aggrieved by the order, assessee filed an appeal with the CIT(A) where the CIT(A) has confirmed the addition and dismissed the assessee’s appeal.

Aggrieved by the order, the assessee filed an appeal with the Tribunal. At the time of hearing, learned AR submitted that the CIT(A) has not considered the submissions made by the assessee and confirmed the application of the provisions of section 40(a)(ia) of the Act. The assessee filed written submissions explaining the reasons on non-applicability of TDS provisions and statement of contractor name, PAN no and works with judicial decisions and prayed for allowing the appeal. Contra, learned DR relied on the CIT(A) order and prayed for dismissal of the appeal.

We heard the rival submissions and perused the material on record. The only disputed issue envisaged by the learned AR on disallowance of freight charges for non-deduction of tax u/s 194C of the Act. Learned AR’s contention that the CIT(A) has not considered the submissions of the assessee and passed non-speaking order. On perusal of the material filed before the Tribunal, we found that these submissions were not dealt in the Page 5 of 5 appellate proceedings. Therefore, in the interest of substantial justice, we restore the entire disputed issue to the file of the CIT(A) to adjudicate afresh and pass a speaking and reasoned order after providing adequate opportunity of hearing to the assessee and allow the grounds of appeal for statistical purposes.

In the result, the assessee’s appeal is allowed for statistical purposes.