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TMI Blog2012 (7) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... elates to the order of the CIT(A) in upholding the re-assessment proceedings initiated under section 147 of the I.T. Act. 3. Facts of the case, in brief, are that the assessee is engaged in the business of Civil construction in the name and style of M/s. GB Associates as a proprietary concern. Original return of income in this case was filed on 28-10- 2005 declaring total income of Rs. 3,32,538/-. The return was processed u/s. 143(1) on 28-02-2006. Subsequently, the AO issued notice u/s. 148 on 07-09- 2007 on the ground that the assessee's accounts being audited u/s. 44AB, the assessee was supposed to deduct TDS from various payments as well as to deposit the same into Central Government's Account before the stipulated time. However, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments advanced by the assessee. Relying on the decision of the Hon'ble Supreme Court in the case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. reported in 291 ITR 500 he held that the intimation u/s. 143(1)(a) is not an order of assessment and therefore the question of change of opinion does not arise. According to him, the failure to deduct and deposit the TDS within the specified time attracts the provision of section 40(a)(ia). Therefore, the AO had reasons to believe that income chargeable to tax has escaped assessment within the meaning of section 147 of the I.T. Act. Further, there was no assessment u/s. 143(3) and the notice has been issued within four years from the end of the relevant assessment year. Therefore, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the tax u/s. 194C. Additional Ground : On the facts and in the circumstances of the case and without prejudice to Ground No. 1 and 2 and if at all disallowance is warranted u/s. 40(a)(ia) the disallowance can only be made of RS. 9,35,083/- that being the amount payable as on 31-03-2005." 8. Facts of the case, in brief, are that during the course of re-assessment proceedings the AO noted that the assessee has added TDS unpaid at Rs. 53,564/-. According to the AO such amount should have been Rs. 56,90,998/- as per the provisions of section 40(a)(ia) of the I.T. Act. On being questioned by AO, it was submitted that provisions of section 40(a)(ia) are attracted only in respect of amounts payable to a resident or to a sub-contractor and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the Tribunal in the case of Merilyn Shipping and Transport Vs. ACIT vide ITA No. 427/Vizag/2008 for assessment year 2005-06 dated 09-04-2012 he submitted that provisions of section 40(a)(ia) are applicable only to amounts of expenditure which are payable as on 31st March of every year and it cannot be undertaken to disallow expenditure which has been actually paid during the previous year without deduction of TDS. 11. Referring to the summary of creditors outstanding as on 31-03-2005 on which TDS was deducted but not paid, (a copy of which is placed at Paper Book at Page 36) he submitted that such amount of creditors amount to Rs.9,35,083/- only. Therefore, although the assessee was not liable to deduct tax at all since the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the issue to the file of the AO with a direction to verify the accounts and disallow the amount which is payable as on 31st March of the impugned assessment year in the light of the decision of the Visakhapatnam Special Bench of the Tribunal cited (supra). Needless to say the AO shall give due opportunity of being heard to the assessee while determining such disallowance. Additional ground raised by the assessee is accordingly allowed for statistical purpose. 14. The only ground raised by the assessee and the additional ground are as under : " On the facts and in the circumstances of the case and without prejudice to the above ground the CIT(A) has erred in sustaining the disallowance of Rs. 26,80,857/- made u/s. 40(a)(ia) over ..... X X X X Extracts X X X X X X X X Extracts X X X X
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