TMI Blog2014 (2) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 40(a)(ia) of the Act is not attracted to the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 since the object of introduction of section 40(a)(ia) of the Act is achieved for the reason that the payees / recipients have declared and offered to tax the payments received from the assessee in their respective hands. As regards the issue of non-furnishing of Form No.26A, we are of the view that since the second proviso to section 40(a)(ia) of the Act is held to be retrospective in operation w.e.f. 1.4.2005, similarly, Form 26A was to be filed for an assessee not to be held as an assessee's in default as per proviso to section 201 of the Act. In all fairness, the assessee in the period under consideration i.e. Assessment Year 205-06 could not have contemplated that such a compliance was to be made and therefore in the interest of equity and justice we set aside the order of the learned CIT (Appeals) and remit the matter to the file of the Assessing Officer directing the Assessing Officer to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 4,23,96,500; being the payments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works amounting to ₹ 4,23,96,500 and directed that the entire payments of ₹ 4,23,96,500 be disallowed under section 40(a)(ia) of the Act for non-deduction of tax at source in accordance with the provisions of section 194C of the Act. 2.3 Consequent to the order of the learned CIT dt.31.3.2009 under section 263 of the Act, the Assessing Officer in pursuance of the directions contained therein passed an order under section 143(3) r.w.s. 263 of the Act dt.5.10.2009 wherein the entire payment of ₹ 4,23,96,500 (i.e. ₹ 2,69,21,500 to Sri G. Shankar and ₹ 1,54,75,000 to Sri Ramesh Kotian) was disallowed under section 40(a)(ia) of the Act for non-deduction of tax at source as per the provisions of section 194C of the Act. 2.4 Aggrieved by the order under section 143(3) r.w.s. ;263 of the Act, the assessee preferred an appeal to this Tribunal. The co-ordinate bench of this Tribunal vide order in ITA No.421/Bang/2009 dt.26.4.2010 remanded to the file of the Assessing Officer the question of the applicability of the provisions of section 194C(2) of the Act to the payments made by the assessee to the aforesaid two persons namely; G.Shankar and Ramesh Kotian. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal(supra), in regard to the retrospective application of the newly inserted second proviso to section 40(a)(ia) of the Act w.e.f. 1.4.2005, it is seen that Form No.26A has not been submitted before the Assessing Officer in the case on hand which is a pre-requisite. Therefore, there is no case for allowing the assessee any exemption from the applicability of section 40(a)(ia) of the Act. 3.1 Aggrieved with the order of the CIT (Appeals), Belgaum dt.29.10.2013 for Assessment Year 2005-06, the assessee is in appeal before this Tribunal raising the following grounds :- 1. The order of the learned CIT (Appeals) in so far as it is against the appellant, is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant s case. 2. The appellant denies himself liable to be assessed on a total income of ₹ 6,29,05,440 as determined by the learned Assessing Officer and confirmed by the learned CIT (Appeals) as against the reported income of ₹ 2,05,08,940 by the appellant under the facts and circumstances of the case. 3. The learned CIT (Appeals) is not justified in law in confirming the disallowance of a sum of ₹ 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernable and are wrong on the facts of the case. 9. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 10. In the view of the above and other grounds that maybe urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed in the interest of justice and equity. 3.2.1 At the outset, the learned Authorised Representative of the assessee assailed the order of the learned CIT (Appeals) as being not correct in law in not following the decision of the co-ordinate bench of this Tribunal in the case of Ananda Markala (supra) in respect of its finding on the issue of amounts paid and payable as on 31st March of the concerned year and in this context ought to have deleted the disallowance of ₹ 4,23,96,500 made under section 40(a)(ia) of the Act in respect of payments to Sri G. Shankar and Sri Ramesh Kotian. The learned Authorised Representative, inter alia, submitted that the provisions of section 40(a)(ia) of the Act are not attracted to the facts of the assessee's case since the recipien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit report under section 44AB for both the assessee in the case on hand and the case of the two payees is not only in conformity with the provisions of the section but also in accordance with law. The learned Authorised Representative assailed the observations of the learned CIT (Appeals) in stating that the disallowance section 40(a)(ia) of the Act was in order since Form No.26A was not submitted by the assessee before the Assessing Officer, contending that this requirement of the CIT (Appeals) was impossible to fulfill at the assessment stage for Assessment Year 2005-06 for the reason that such Form was not inexistence as on the date of the original order of assessment. In view of the above, the learned Authorised Representative prayed, that the assessee's appeal ought to be allowed. 3.3 Per contra, the learned Departmental Representative was heard and he supported the orders of the authorities below. 3.4.1 We have heard the rival submissions and perused and carefully considered the material on record. Admittedly, the assessee has not deducted tax at source on the payments made to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000. As p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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