M/S SOUTH KANARA GOLD SMITH INDUSTRIAL CO-OPERATIVE SOCIETY LTD.,MANGALORE vs. ITO, MANGALORE

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ITA 32/BANG/2015Status: DisposedITAT Bangalore13 November 2015AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the interest of justice would be met by remitting the matter back to the AO for de novo consideration. The assessee should be afforded a reasonable opportunity of being heard.

What were the facts?

A co-operative society engaged in extending credit facilities failed to deduct tax at source on commission payments and contractor payments. A survey was conducted, and the Assessing Officer (AO) treated the assessee as in default under Section 201(1). The assessee did not respond to the show cause notice due to short notice.

What were the issues?

Whether the assessee was rightly treated as in default for failure to deduct TDS. Whether the assessee was denied a reasonable opportunity to present its case.

Which sections of the Income-tax Act were involved?

Section 133A,Section 201(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE ‘A’ BENCH, BANGALORE

Before: SMT ASHA VIJAYARAGHAVAN & SHRI INTURI RAMA RAO

For Appellant: Shri Suresh Muthukrishnan, CA
For Respondent: Dr. P.K.Srihari, Addl.CIT

PER SHRI INTURI RAMA RAO, AM :

1.

These are appeals by the assessee directed against the common orders of the CIT(A), Mysore dated 19-08-2014 for the assessment years :

2009-10, 2010-11 & 2011-12 respectively.

2.

Briefly the facts are that the assessee a co-operative society engaged in the business of extending credit facility to its members. In this case, there was a survey u/s 133A of the IT Act, conducted at the office

ITA Nos.32,33 & 34(B)/2015 premises on 03-12-2013, to verify the compliance with the provisions of Chapter-XVII-B of the IT Act. During the course of verification, it was found that assessee co-operative society had failed to deduct tax at source on the commission payments made to pygmy commission agents and the payments made to contractors who carried out repairs and maintenance/alteration of buildings. Consequently, a show cause notice was issued to the assessee on 19-03-2014 seeking explanation as to why the assessee co-operative society should not be treated as the ‘assessee in default’ and finally it was held by the AO the assessee is in default in terms of Sec.201(1) of the IT Act, and demanded tax of Rs.2,20,693/-. It was found that the assessee had not responded to the show cause notice issued by the AO and the order was passed ex-parte.

3.

Being aggrieved, the assessee filed appeal before the CIT(A). The CIT(A) vide his impugned order dated 19-08-2014 dismissed the appeals filed by the assessee. It was contended before the CIT(A) that due to short notice, assessee could not respond to the show cause notice.

4.

Before us, the learned counsel for the assessee stated since no ITA Nos.32,33 & 34(B)/2015 explanation could be filed by the assessee for want of reasonable time, the matter may be remitted back to the file of the AO for deno-vo consideration.

5.

Learned Senior DR has no serious objection for the same.

Accordingly, we are of the considered opinion, that the interest of justice would be met, if the matter is restored to the file of the AO for deno-vo consideration, after affording a reasonable opportunity of being heard to the assessee. We order accordingly.

6.

In the result, the appeals filed by the assessee are partly allowed for statistical purposes.

Order pronounced in the open court on the 13th November, 2015.

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