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Income Tax Appellate Tribunal, “E” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)& Ramlal Negi (JM)
O R D E R Per B.R. Baskaran (AM) :-
The appeal filed by the Revenue is directed against the order dated 22.1.2013 passed by learned CIT(A)-21, Mumbai and it relates to A.Y. 2009-10.
The revenue is aggrieved by the decision of learned CIT(A) in deleting the disallowance made by the Assessing Officer u/s. 40(a)(ia) of the I.T. Act by admitting additional evidence in violation of Rule 46A of the I.T. Rules.
None appeared on behalf of the assessee and we noticed that all the notices issued by the Registry have been returned back by the Postal Department with the noting “left”. Hence, we proceed to dispose of the appeal ex-parte, without presence of the assessee.
We heard learned Departmental Representative and perused the record. We noticed that the assessee did not cooperate with the Assessing Officer and hence the Assessing Officer was constrained to pass the assessment order to 2 M/s. Euclid Solutions P. Ltd.
the best of his judgement u/s. 144 of the Act. The Assessing Officer noticed that the assessee has claimed an amount of ` 90,86,800/- as professional charges. Since the assessee did not furnish any evidence to show that TDS has been deducted from the above said payment and deposited within time, the Assessing Officer disallowed above said expenditure u/s. 40(a)(ia) of the Act.
Learned CIT(A), however, deleted the addition with the following observations :-
3.2 I have considered the facts of the case, submissions of the appellant and evidence filed before me. The A.O. had disallowed the professional fees amounting to Rs.90,86,800/- as there was no evidence in the material available before him. I had verified the account copy, TDS payments and challans filed by the appellant. On all other amounts TDS was deducted and paid in time except for two payments on which TDS was paid on 29.09.2009. With regard to date of payment of TDS deducted on 01.01.2009 and 01.02.2009, TDS was paid on 29.09.2009. For these two payments the appellant relied on Calcutta High Court in the case of CIT vs. Virgin Creations Ltd. where Calcutta High Court held that newly inserted provisions of sec.40(a)(ia) substituted by Finance Act, 2010 has to be considered retrospective in nature. The amendment clearly states that TDS paid till the filing of the return, provisions of sec. 40(a)(1a) disallowance is not applicable. Following the above evidence filed by the appellant before me and also relying on the decision of Calcutta High Court, A.O's addition is deleted. These grounds of appeal are allowed.
6. Contention of the Revenue is that learned CIT(A) did not confront with the AO, the additional evidences furnished before him by the assessee and hence there is violation of Rule 46A of the I.T. Rules. Perusal of the order passed by learned CIT(A) shows that the Ld CIT(A) has observed that the assessee has deducted TDS from the professional fee of ` 90,86,800/- and paid the same in time except for two payments. Those two payments have also been paid before due date of filing the return of income. Accordingly, learned CIT(A) has deleted the disallowance by following the decision rendered by Hon'ble Calcutta High Court in the case of CIT Vs. Virgin Creations Ltd.
3 M/s. Euclid Solutions P. Ltd.
We noticed that though there is no infirmity in the decision rendered by learned CIT(A), yet details of deduction of TDS and payment thereof have not been properly brought on record by learned CIT(A). Hence, for the purpose of verification of those details, we are of the view that this issue needs to be set aside to the file of the Assessing Officer. Accordingly, we set aside the order passed by learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with the direction to verify the details of deduction and remittance of TDS and decide the issue in accordance with the decision rendered by Hon'ble Calcutta High Court in the case of Virgin Creations Ltd.
In the result, appeal filed by the Revenue is treated as allowed for statistical purposes. Order has been pronounced in the Court on 26.9.2016.