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TMI Blog2015 (12) TMI 1465X X X X Extracts X X X X X X X X Extracts X X X X ..... oncised below for adjudication:- (i) The Ld. CIT (A) has erred by disallowing interest paid to various parties amounting to Rs. 6,49,919/- by invoking the provisions of section 40(a)(ia) of the Act through the assessee had belatedly filed form 15G before the Ld.A.O and also before the Ld. CIT. 3. The brief facts of the case are that the assessee is an individual, engaged in the business of share trading and service provider, filed his return of income for the assessment year 2010- 11 admitting income as Rs. 18,27,970/-. Initially the return was processed U/s. 143(1) of the Act and subsequently the case was taken for scrutiny through CASS and the assessment U/s. 143(3) was completed on 26.03.2013 wherein the Ld. Assessing Officer made one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a declaration in writing in prescribed Form and verified in the prescribed manner to the effect that tax on his estimated total income is to be included in computing his total income will be NIL, there is no need to deduct tax. The assessee has received such Forms as prescribed from those persons to whom interest was paid/being paid and accordingly no deduction of tax was to be made in such cases. i.e. Once Form 15G/15H was received by the person responsible for deducting tax, there is no liability to deduct tax. Once there is no liability to deduct tax, it cannot be considered that tax is deductible at source under Chapter XVII-B as prescribed u/s 40(a)(ia) can only be invoked in a case where tx is deductible at source and such tax has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, one copy of / the declaration on or before the seventh day of the next month in which the declaration is furnished to him. Since the assessee had failed to furnish proof for submission of Form 15-G declaration before the Commissioner within the due date mentioned above, the assessing officer concluded that the declarations are not valid. In view of this, the disallowance of interest payment of Rs. 6, 46,919/- under section 40(a)(ia) may be sustained. 5.4. Appellant either has to deduct TDS or obtain Form 15G in the prescribed method which envisages that the said forms should filed before the Commissioner of Income Tax before the due date. When Appellant claims that TDS is not deductible as he obtained Form 15G, the onus is on him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the same. 5. We have heard both the parties and carefully perused the materials available on record. From the facts of the case, it appears that the assessee had filed the Form 15G belatedly before the Ld. A.O except from two individuals. Since there were defect in the Form 15G because the same was undated, the Ld. Assessing Officer as well as the Ld. CIT disallowed the interest expenses claimed by the assessee by invoking the provisions of section 40(a)(ia) of the Act. The assessee has relied in the decision of the Jurisdictional High Court in the case of Vijay Hemant Finance & Estates Ltd., cited supra which is identical to the case of the assessee wherein the Hon'ble High Court remitted the matter back to the file of Ld. Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The ITO, however, granted registration to the firm. In such a situation it was equally the duty of the CIT to have given an opportunity to the assessee-firm to remedy the defect in their application. The CIT. in view of this circular, clearly should not have cancelled the renewal of registration of the assessee-firm without giving an opportunity to the assessee-firm to remedy the defect in the application." (p. 463) Following the decision of the Bombay High Court, I hold that it is the duty of the ITO to give an opportunity to rectify the defects in the declarations in Form No. 15H and imposition of tax liability without giving an opportunity to the petitioner to rectify the defects in the declarations in spite of the petitioner aski ..... X X X X Extracts X X X X X X X X Extracts X X X X
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