Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2022 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 748 - HC - Income TaxDisallowance u/s 40(a)(ia) - short deduction of tax in violation of Section 197(1) - ITAT deleted the addition - HELD THAT:- A perusal of the paper book reveals that the Commissioner of Income Tax (Appeals) while disposing of the appeal filed by the assessee had directed the Assessing Officer to verify whether copies of non-deduction of tax/deduction of tax at lower rate were filed by the assessee before passing the assessment order. The ITAT in the impugned order has recorded that the Assessing Officer after verifying the said tax deduction certificate had deleted the disallowance in order giving effect order. Further, this Court is of the opinion that in cases of short deduction of TDS, disallowance under Section 40a(ia) of the Act cannot be made and the correct course of action would have been to invoke Section 201 of the Act. On similar facts, the Calcutta High Court in CIT vs SK Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] dismissed the Revenue’s appeal Disallowance u/s 40A - Also, both the CIT (A) and ITAT have given concurrent findings on facts in favour of the assessee on the issue of remuneration paid to the director Shri Sunil Baijal by observing that higher salary paid to the said director was accepted as remuneration by the assessing officer during the scrutiny assessment in the subsequent assessment year; and that the assessing officer had not brought any evidence/material for making disallowance under Section 40A(2)(b) of the Act. The ITAT also noted that the Assessing Officer, without any reason or material facts, had arbitrarily disallowed 50% of the remuneration. The ITAT further held that the Assessing Officer had not given cogent reasons to conclude that the remuneration paid was not commensurate with the market value of the services rendered by the Managing Director. No substantial question of law.
|