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2016 (11) TMI 1686 - AT - Income TaxAddition u/s 40(a)(ia) - disallowance of interest expenses - technical error in furnishing the declaration in Form 15G/15H wherein certain columns of the Forms were not filled-up by the payee - HELD THAT:- Genuineness of the deposit received and the payment of interest on the same for the relevant assessment years has never been doubted by the income tax authorities. The declaration has been furnished by the persons who are in receipt of the interest stating that their income is below the threshold limit for taxation and no tax need to be deducted. The disallowance made for the relevant assessment year is for the reasons that there is a technical error in furnishing the declaration in Form 15G/15H wherein certain columns of the Forms were not filled-up by the payee. The mistakes found in the declaration are of technical nature and the assessee could have got it corrected, had he been given an opportunity, instead of taking to the extreme step of adding back the entire interest payment. AO and the CIT(A) instead of giving an opportunity to the assessee to correct the Form 15G/15H had straight away invoked the provisions of section 40(a)(ia) of the Act and disallowed the interest expenditure. Non furnishing of statement to CIT as mentioned in Rule 29C(5) only entails the assessee for penalty u/s 272A(2) of the Act and not for a automatic disallowance of interest expenditure by invoking the provision of section 40(a)(ia). Non filling up of the column in Form 15G/15H by the payee’s are only technical default, which could have been corrected had the assessee been given an opportunity. The assessee should be given an opportunity to correct the technical error with regard to the defaults that is containing in Forms 15G/15H. Therefore, the matter is remitted to the Assessing Officer. The assessee shall produce the corrected Form 15G/15H for the relevant period from the payee and shall submit the same to the Assessing Officer. If the corrected forms in 15G/15H are submitted, there shall be no disallowance of interest expenditure. Appeal filed by the assessee is allowed for statistical purpose.
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