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PCB Enterprise Pvt Ltd, Kolkata Versus ACIT, Central Circle-XXVIII, Kolkata

2015 (6) TMI 277 - ITAT KOLKATA

Disallowance u/s 40(a)(ia) - non deduction of TDS on internal audit fee - Held that:- In each of the case audit fee did not exceed Rs.,20,000/-. The relevant assessment year involved is 2006-07 relevant to financial year 2005-06. In view of the proviso of section 194J of the Act fee for professional or technical services the assessee is not liable to deduct TDS in case the payment does not exceed the monetary limit prescribed i.e. ₹ 20,000/- in that year in each of the case. Thus assessee .....

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deduction of TDS u/s 40(a)(ia) of the Act. - Decided in favour of assessee. - ITA No. 979/Kol/2011 - Dated:- 25-5-2015 - P. K. Bansal, AM And Mahavir Singh, JM,JJ. For the Appellant : Shri M D Shah For the Respondent : Shri Pinaki Mukherjee, JCIT, Sr. DR ORDER Per Mahavir Singh, JM. This appeal of the Revenue is directed against order of the CIT(A)-Central-I, Kolkata in Appeal No.326/CIT(A)C-I/CC-XXVIII/09-10 dated 16.05.2011. Assessment was framed by A.C.I.T., Central Circle-XXVIII, Kolkata u/s .....

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provision of section 40(a)(ia) of the Act. For this assessee has raised the following ground no.3 : "3. For that in the facts and circumstances of the case the assessing officer and the CIT Appeals erred in disallowing ₹ 48,000/- being internal audit fee by invoking the provisions of Section 40(a)(ia) of the Act 1961. Such disallowances is unwarranted, uncalled for and unjustified and hence the same be deleted." 4. We have heard the rival contentions and gone through facts and ci .....

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The relevant assessment year involved is 2006-07 relevant to financial year 2005-06. In view of the proviso of section 194Jof the Act fee for professional or technical services the assessee is not liable to deduct TDS in case the payment does not exceed the monetary limit prescribed i.e. ₹ 20,000/- in that year in each of the case. In view of the proviso the present assessee is not liable to deduct tax as the payment in all the three cases is less than ₹ 20,000/- each. In such circu .....

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the case the assessing officer and the CIT Appeals erred in disallowing ₹ 43,65,432/- being interest by invoking the provisions of Section 40(a)(ia) of the Act 1961. Such disallowance is unwarranted, uncalled for and unjustified and hence the same be deleted." 7. The AO noted that assessee has debited interest on loan in the profit and loss account amounting to ₹ 47,40,432/- and assessee had produced ledger copy and admitted that no TDS has been deducted while crediting such in .....

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submitted were incomplete and none of the Schedule-I & II, III provide relevant information. Even PAN of the respective persons is not given in any of the Form 15G. Further as reported by the AO the Ld. Ar expressed his inability to produce the required information or to produce any of the persons for examination. Hence no credit can be given to the unverifiable form 15G submitted by the assessee in respect of interest payment of Rs. However as reported by the AO that TDS has been duly dedu .....

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e technical hitch that these persons, no doubt have given Form 15G but these are not properly filled up according to CIT(A). These forms are not properly filled up in Schedule I, II and III and even part-II of the form to be filled up by the deductor. According to CIT(A) PAN of the respective persons was not given in Form 15G. It is a fact that assessee has received Form 15G from the respective payees to whom interest has been paid by the assessee. Once the assessee has received Form 15G the onu .....

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IA) provides that notwithstanding anything contained in section 194A no deduction of tax shall be made under the section if the payee of the interest furnished to the person responsible for paying the interest, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that the tax on his estimated total income of the previous year in which the interest is to be included will be nil. Sub-section (2) provides that the person responsible for pa .....

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an be imposed only by the Commissioner or Chief Commissioner of Income Tax as stated in clause (b) of sub-section 3 of Section 272A and sub-section 4 requires that an opportunity shall be given to the assessee before any penalty order is passed. 7. In the present case the claim of the assessee is that at the time of paying the interest to the 34 persons mentioned in the assessment order, he had before him the appropriate declarations in the prescribed form from the payees stating that no tax was .....

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essee'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 n .....

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request of the assessee in September /October, 2008. In the absence of any such direct evidence, we are unable to reject the assessee's claim. The Assessing Officer has stated in para 4.4 of the assessment order that he found that some of the loan creditors were having taxable income but still the assessee had submitted declarations from them in form no. 15G. Unless it is proved that these forms were not in fact submitted by the loan creditors, the assessee cannot be blamed because at the t .....

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o choice except to desist from deducting tax from the interest. The sub-section uses the word "shall" which leaves no choice to the assessee in the matter. In the case of payment of leave travel concession and conveyance allowance to employees who are liable to deduct tax from the salary paid to the employees under section 192, the Supreme Court has held in CIT Vs. Larsen & Toubro Ltd. (2009) 313 ITR 1, that the assessee was under no statutory obligation under the Act or Rules to c .....

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d out the truth of the declarations filed by the payee. Even if the assessee has delayed the filing of the declarations with the office of the CIT / CCIT (TDS) within the time limit specified in sub-section (2) of section 197A, that is a distinct omission or default for which a penalty is prescribed. Section 273B provides that no penalty shall be imposed under any of the clauses of sub-section (2) of section 272A for the delay, if the assessee proves that there was reasonable cause for the same. .....

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