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Facts
The assessee, SVC Co-operative Bank Ltd., filed its return of income for AY 2012-13. During scrutiny, the AO disallowed expenses totaling Rs. 8,81,85,464/- under Section 40(a)(ia) for alleged non-deduction of TDS. The CIT(A) restricted the disallowance to Rs. 3,21,31,971/-.
Held
The Tribunal noted that the assessee claimed it was a case of short deduction, not non-deduction, and presented new evidence. The Tribunal decided to restore the issue to the AO for fresh adjudication after verifying the supporting evidence presented by the assessee.
Key Issues
Whether the disallowance of expenses under Section 40(a)(ia) for non-deduction or short deduction of TDS is justified, especially in light of new evidence presented by the assessee.
Sections Cited
40(a)(ia)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI RAHUL CHAUDHARY, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by theassessee is preferred against the order dated 19/09/2024 by NFAC Delhi [in short ‘ld. CIT(A)] pertaining to AY 2012- 13.
The grievance of the assessee reads as under :- “On the facts and the circumstances of the case, the Ld. CIT (A), NFAC, Delhi erred in - 1. confirming the disallowance of expenses to the tune of Rs. 3,21,31,971 on the ground that tax was not deducted at source on these amounts in accordance with law and hence, the disallowance made by the Assessing officer u/s. 40(a)(ia)of I. T. Act, 1961 was justified. 2. confirming the above disallowance without appreciating the fact that tax was properly deducted at source on these payments in view of certificate of lower deduction of tax at source issued to the parties by their respective assessing officers. 3. confirming the above disallowance without appreciating the fact that in respect of certain expenses tax at source was not deductible at all since those payments did not attract the provisions applicable to tax deductible at source. And hence, the disallowance of expenses of Rs. 3,21,31,971 u/s. 40(a)(ia) deserves to be deleted in toto.
2 Your Appellant craves leave to add, alter, modify or delete all or any of the grounds of appeal
.”
3. Briefly stated the facts of the case are that the assessee filed its return of income on 28/09/2012 declaring total income at Rs.102,79,65,520/-. The return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. During the course of scrutiny assessment proceedings, the AO noticed that the assessee has debited to the profit and loss account, a sum of Rs.4,09,91,945/- being legal and professional charges, of Rs.3,27,49,392/- being Advertisement and Rs.1,44,44,127/- being networking expenses. The AO found that the assessee has not deducted tax at source on the impugned payments, therefore, invoking provisions of Section 40(a)(ia) of the Act, the AO disallowed Rs.8,81,85,464/-. 3.1. The assessee carried the matter before the ld. CIT(A) and pointed out that it is not the case of non-deduction of tax but it is a case of short deduction of tax at source to which provisions of Section 40(a)(ia) of the Act, do not apply. After considering the facts and submissions, the ld. CIT(A) restricted the disallowance to Rs.3,21,31,971/-.
4. Before us, the ld. Counsel for the assessee drew our attention to a chart containing details of the impugned payments along with remarks for non-deduction/short deduction of tax at source. It is the say of the ld. Counsel that because of inability to furnish necessary evidence before the lower authorities, the assessee could not defend its case properly and since now full details are available with the assessee, the same should be considered.