2011 (2) TMI 1420 - AT - Income Tax

Summary

Issues involved: Assessment year 2008-09, Tribunal fee payment discrepancy, Appeal against CIT(A) order, TDS payment liability, Compliance with S.249(4)(a) of the Income Tax Act.

Tribunal Fee Payment Discrepancy:
The Registry pointed out a shortfall in the Tribunal fee paid by the assessee. The assessee argued that the issue is settled in their favor based on precedents from the Hon'ble Karnataka High Court and the Hyderabad Bench of the Tribunal. It was held that the Tribunal fee of Rs. 500 is payable when the appeal is against the CIT(A) order dismissing the appeal in limine. The Tribunal found no merit in the defect raised by the Registry and proceeded to dispose of the appeal on its merits.

Appeal Against CIT(A) Order:
The grounds of appeal by the assessee included contentions that the CIT(A) order was erroneous both on facts and in law, particularly regarding the non-payment of admitted tax. The assessee argued that the tax due was paid, and the balance represented TDS not remitted to the government account. The Tribunal considered these submissions and set aside the CIT(A) order, directing a reevaluation of the appeal on its merits after verifying the TDS payment by the deductor.

TDS Payment Liability:
The dispute arose from the CIT(A) dismissing the appeal due to alleged non-payment of TDS by the deductor, M/s. Demi Realtors. The deductor later deposited the TDS amount to the government and issued Form 16A to the assessee. The Tribunal observed that the liability for TDS deposit lay with the deductor, not the assessee. In light of the evidence provided, the Tribunal set aside the CIT(A) order and instructed a reevaluation of the appeal after considering the TDS payment made by the deductor.

Compliance with S.249(4)(a) of the Income Tax Act:
The Departmental Representative contended that the assessee should have complied with the provisions of S.249(4)(a) before the CIT(A) appeal disposal. However, the Tribunal clarified that the deductor's responsibility for TDS deposit was fulfilled, and the appeal should be decided on its merits. The Tribunal directed the CIT(A) to admit the appeal after verifying the TDS deposit evidence and to proceed with the appeal hearing while ensuring a fair opportunity for both parties.