NEW BAL ROADLINES,MUMBAI vs. ITO WD 23(1)(1), MUMBAI

It is seen from the record that the notice for hearing has been sent to the stated address of the appellant by registered post, which has come back as unclaimed. As a consequence I proceed to dispose of the appeal, ex-parte, qua the assessee after hearing Ld. Departmental Representative on merits as per Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.

The only issue in this appeal, is with regard to a disallowance of Rs.5,33,342/- by invoking the provisions of section 40(a)(ia) of the Act on the ground that the requisite tax was not deducted at source.

The relevant facts are that the assessee was found to have paid interest to a Non-banking finance company Rs.5,33,342/-, on which no tax was deducted at source. Accordingly, section 40(a)(ia) of the Act has been invoked and such expenditure has been disallowed. Before the CIT(A), an argument was raised that in terms of second proviso to section 40(a)(ia) introduced by the Finance Act,2012 no disallowance under section 40(a)(ia) is merited where the payee has paid tax on such sum by furnishing the return of income. The claim of the assessee was that such amendment is retrospective and should be applicable in the instant assessment year. The CIT(A), however, noticed that assessee could not be allowed the benefit of the said proviso because the requisite conditions contained therein with reference to the first proviso to section 201(1) of the Act has not been complied with. According to the CIT(A) assessee has not proved with any evidence that such conditions are fulfilled, therefore, the disallowance has been upheld.

Before me, there is no averment which shows that there is any material to suggest any interference in the finding of the CIT(A). As a consequence, the decision of the CIT(A) is hereby affirmed and assessee fails in its appeal.

In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 29/12/2016