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TMI Blog2016 (6) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source on the payments made to various parties aggregate to Rs. 31,44,113/-. The Assessing Officer had made disallowance of Rs. 9,60,138/- on account of short deduction of tax at source on the payments made to M/s Mangalmurti Roadlines. Aggrieved by the assessment order dated 12.12.2011, the assessee preferred an appeal before the CIT(A). 3. The CIT(A) vide impugned order partly accepted the appeal of the assessee and deleted the addition under section 40(a)(ia) of the Act to the extent of Rs. 93,000/- thereby confirming the disallowance to the tune of Rs. 20,90,575/-. In respect of short deduction of tax on the payments made to Mangalmurti Roadlines, the CIT(A) remitted the matter back to the file of the Assessing Officer for verification of the TDS amount remitted to the Govt. exchequer. The CIT(A) directed the Assessing Officer to restrict the disallowance to the extent of payments/credits not covered by TDS. 4. Aggrieved by the order of the CIT(A), the assessee is in second appeal before Tribunal by raising the following Ground of Appeal :- "1. The learned CIT (A) erred on facts and in law in upholding disallowance of Rs. 16,38,000 being expenditure on obtaining ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (Coch.) and the decision of Delhi Bench of the Tribunal in the case of ACIT vs. Pankaj Bhargava reported as (2013) 36 CCH 343 (Del.-Trib.). 6. On the other hand, Shri S. K. Jadhav representing the Department vehemently supported the findings of the CIT(A) on issue. The ld. DR contended that since the assessee has failed to deduct tax at source on the payments made to the respective parties, the Assessing Officer has rightly invoked the provisions of section 40(a)(ia) of the Act and has rightly made the disallowance on such payments. In respect of payments made to Mangalmurti Roadlines, the assessee has deducted tax at source at Rs. 10,570/- instead of deducting Rs. 20,517/-. It is not the case where short fall in TDS was due to difference of opinion as to the taxability of an item. The assessee was duty bound to deduct tax at source as per the provisions of section 194C of the Act. The provisions of section 40(a)(ia) are attracted even in case of short deduction of tax at source. The ld. DR prayed for dismissing the appeal of the assessee and confirming the impugned order. 7. We have heard the submissions made by the rival parties and perused the orders of the authorities below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal in the case of Antony D. Mundackal vs. ACIT vide ITA No.38/Coch/2013 dated 29.11 .2013 has restored the matter back to the file of the Assessing Officer. In the precedent dated 06.01.2014 (supra), the Tribunal noted that such a plea was raised for the first time before the Tribunal and the correctness or otherwise of the contentions raised was not examined by the lower authorities. Therefore, the Tribunal restored the matter back to the file of the Assessing Officer for examination afresh, following the decision of the Cochin Bench of the Tribunal in the case of Antony D. Mundackal (supra) in a similar circum stance. The Ld. Representative submitted that the matter be restored back to the file of the Assessing Officer in the light of the order of the Tribunal dated 06,01.2014 (supra). The aforesaid plea of the respondent-assessee has not been seriously opposed by the Ld. Departmental Representative appearing for the Revenue. 5. Following the aforesaid precedent, we therefore deem it fit and proper to restore the matter back to the file of the Assessing Officer who shall consider the plea of the assessee based on the second proviso to section 40(a)(ia) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the payments where there is short deduction of tax. Reliance has been placed on the decision rendered in the case of Apollo Tyres Ltd. vs. DCIT (supra). The Cochin Bench of the Tribunal while dealing with the similar issue has held as under :- "8. We have considered the rival submissions on either side and also perused the material available on record. We have also carefully gone through the provisions of section 40(a)(ia) of the Act, which reads as follows: "(ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Andhra Pradesh High Court in P.V. Rajagopal (supra) 10. As rightly pointed out by the ld.senior counsel for the assessee in section 201(1A) the legislature intended to levy interest even in case of short deduction of tax. In other words, if any part of the tax which required to be deducted was found to be not deducted then interest u/s 201(1A) can be levied in respect of that part of the amount which was not deducted. Whereas the language of section 40(a)(ia) does not say that even for short deduction disallowance has to be made proportionately. Therefore, the legislature has clearly envisaged in section 201(1A) for levy of interest on the amount on which tax was not deducted whereas the legislature has omitted to do so in section 40(a)(ia) of the Act. In other words, the provisions of section 40(a) (ia) does not enable the assessing officer to disallow any proportionate amount for short deduction or lesser deduction." 12. Thus, in view of the above decision of the Co-ordinate Bench of the Tribunal and the facts of the present case, we hold that provisions of section 40(a)(ia) are not attracted where there is short deduction of tax. Accordingly, no disallowance under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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