TMI Blog2015 (5) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... has raised the following grounds of appeal : 1. That on the facts and circumstances of the case, the Ld.CIT(A), Kolkata erred in law and in fact in deciding the appeal in favour of the assessee by deleting the addition made u/s 40(a)(ia) of the Income tax Act, 1961 on account of payment against freight charges of ₹ 2,65,48,566/-, where the assessee failed to deduct tax at the time of payment/credit of the same on which the tax was deductible at source under Chapter XVII B of the Act. 2. That the appellant craves leave to add, alter, adduce or amend any ground or grounds of appeal at the time of hearing. 3. The brief facts of the case are that the assessee is engaged in the business of transportation/carriage of goods as transport contractor. The assessee has debited in its profit and loss account an amount of ₹ 3,28,45,317/- on account of freight payment. AO observed that the assessee was required to deduct tax at source u/s 194C of the Act on the total payment of ₹ 2,65,48,566/-. The assessee submitted party wise details and submitted that no TDS is required to be deducted because the truck owners transport the goods without assuming any responsibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying out any contract in pursuance of a contract between the contractor and contractee to deduct tax at source at prescribed rate and the assessee cannot be presumed to be ignorant of the provisions of law. 3.2. As regards the submission of Form 15J and 15I the AO observed that it is a preposterous statement by the assessee just to evade its legal obligation to furnish particulars in Form 15J to the jurisdictional Commissioner of Income Tax by 30th June, 2008. It was further observed from Form 15J filed in the assessment proceedings that they were collected by the assessee in the April, May and June, 2007 but the assessee had claimed to have sent Form 15J to Commissioner of Income tax, Kolkata by under postal certificate on 30.06.2008 after a gap of one year from the month of collecting the alleged declarations in Form 15 I. On verification by the Inspector in the office of Commissioner of Income Tax, Kolkata it was found that no such documents as claimed by the assessee has been received by the CIT's office. Accordingly AO observed that there is no substance in the pleadings of the assessee and it was required to deduct tax at source u/s 194C of the Act and therefore provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 15J/I was found as claimed by the assessee. As against the assessee has filed the postal despatch documents with the AO which has not been proved false by the AO. The same is on record before both the authorities below as well as before us. The non submission before the Commissioner of Income tax was explained by the assessee before AO as well as CIT that the receipt clerk of the CIT's office was not found in the seat on 30th June, 2008. The assessee chose to send Form 15J under postal certificate. However the fact remains that Form 15I was available with the assessee and was submitted to the AO in the month of April to June, 2007 much before the due date i.e. 30th June, 2008 in the present case. Therefore in our view once the specified forms have been collected under Rule 29D(4)(ii) by the assessee even if the same is not submitted to the CIT for one reason or another, the assessee is not required to deduct tax at source u/s 194C of the Act and therefore provisions of section 40(a)(ia) cannot be made applicable. The issue is covered by the decisions of ITAT, Kolkata Benches in the case of ITO vs Rajesh Kumar Garg (supra), Valibhai Khanbhai Mankad, Ahmedabad in ITA No.2228/Ah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of tax shall be made by the assessee. The revenue authorities have doubted the assessee's version because according to them it is only when the Assessing Officer proposed the disallowance of the interest by invoking the section 40(a)(ia) in the course of the assessment proceedings that the assessee filed the declarations claimed to have been submitted to him by the payees of the interest, in the office of the CIT(TDS) as required by sub-section 2 of section 197A. Apart from this inference, there is no other evidence in their possession to hold that the declarations were not submitted by the payees of the interest to the assessee at the time when the payments were made. Without disproving the assessee's claim on the basis of other evidence, except by way of inference, it would not be fair or proper to discard the claim. The Assessing Officer has not recorded any statements from the payees of the interest to the effect that they did not file any declarations with the assessee at the appropriate time or to the effect that they filed the declarations only at the request of the assessee in September /October, 2008. In the absence of any such direct evidence, we are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (4) of section 272A, no penalty can be imposed unless the assessee is given an opportunity of being heard. All these provisions indicate that the failure on the part of the assessee, who is the payer of the interest, to file the declarations given to him by the payees of the interest, within the time limit specified in subsection (2) to section 197A is distinct and separate and merely because there is a failure on the part of the assessee to submit the declarations to the incometax department within the time limit, it cannot be said that the assessee did not have declarations with him at the time when he paid the interest to the payees. That would be a separate matter and separate proof and evidence is required to show that even when the assessee paid the interest, he did not have the -- declarations from the payees with him and therefore he ought to have deducted the tax from the payment. No such evidence or E,roof has been brought by the department. 8. For the aforesaid reasons, we accept the assessee's claim that since he had the declarations of the payees in the prescribed form before him at the time when the interest was paid, he was not liable to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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