TMI Blog2016 (7) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... d followed the jurisdictional tribunal decision while adjudicating the issue of disallowance u/s 40(a)(ia) of the Act though he might not have mentioned the same in his assessment order. In such circumstances, the order passed by the ld AO cannot be construed as erroneous. Moreover, the decision of the tribunal purportedly relied by the ld AO had been approved by the Hon’ble High Court. In these circumstances, we can safely conclude that the ld AO had taken one of the possible view. - Decided in favour of assessee - I.T.A No. 1194/Kol/2014 - - - Dated:- 13-7-2016 - Shri M. Balaganesh, AM Shri S. S. Viswanethra Ravi, JM For The Appellant: Shri Miraj D. Shah, AR For The Respondent: Shri Niraj Kumar, CIT, DR ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and in response to such notice, M/s. Gananayak Vincom Pvt. Ltd. informed that they had received ₹ 6,59,31 ,834/- during the period April, 2008 January, 2009 and the balance ₹ 32,71,803/- in March, 2009. Total bill including Service Tax was ₹ 6,92,03,637/-. M/s Umang Merchandise Pvt. Ltd. had stated to have received ₹ 7,72,99,427/- during April, 2008 January, 2009 and balance ₹ 44,42,642/- in March, 2009. Total bill including Service Tax was ₹ 8,17,42,.051/-. In other words the assessee had made payments of ₹ 6,59,31,854 + ₹ 7,72,99,427 = ₹ 14,32,31,261 between April 2008 and January 2009 ₹ 32,71,803 + ₹ 44,42,642 = ₹ 77,14,445 in March 2009. The assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT. Accordingly he dismissed the preliminary objection raised by the assessee on the assumption of jurisdiction u/s 263 of the Act. The ld CIT observed that since the lower / nil deduction certificate u/s 197(1) of the Act was available only for a limited period of time in a year, the assessee ought to have deducted tax at source on payments made prior to the exemption period u/s 197(1) of the Act and concluded that there was short deduction of tax at source to the tune of ₹ 41,60,372/- warranting proportionate disallowance u/s 40(a)(ia) of the Act. Accordingly he held that the order passed by the ld AO without making this proportionate disallowance u/s 40(a)(ia) for short deduction of TDS as erroneous and prejudicial to the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case the Learned Commissioner of Income Tax failed to appreciate that the assessment order was not erroneous and prejudicial to the interest of revenue and as such the Learned Commissioner of Income Tax had no jurisdiction to interfere with the said assessment order. 6. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 is based on wrong appreciation of facts of the case and is bad in law. 7. For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 failed to consider the correct law applicable to provisions of Section 68 of the IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any case, no prejudice is caused to the interest of the revenue as both the parties to whom payments have been made by the assessee i.e M/s Gananayak Vincom Pvt Ltd and M/s Umang Merchandise Pvt Ltd had duly confirmed to the ld AO about the entire transactions with the assessee u/s 133(6) of the Act and they are also assessed to income tax wherein they had duly disclosed these receipts in their returns. Hence by applying the second proviso to section 40(a)(ia) of the Act which has been held to be retrospective in operation by the decision of the Hon ble Delhi High Court in the case of CIT vs Ansal Land Mark Township P Ltd reported in 377 ITR 635 (Del), no disallowance in any case could be made in the hands of the assessee u/s 40(a)(ia) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the case of DCIT vs S K Tibrewal in ITA No. 1135/Kol/2010 dated 21.10.2011 wherein it was held that in the case of short deduction of tax at source, no disallowance u/s 40(a)(ia) of the Act could be made in the hands of the assessee and the assessee could be proceeded against only under section 201 of the Act in such cases. This decision was admittedly approved by the Hon ble Calcutta High Court in the same case in ITAT NO. 183 of 2012 G.A.No. 2069 of 2012 dated 3.12.2012. We also find that the assessment order was passed u/s 143(3) of the Act on 30.12.2011 which was after the decision rendered by this tribunal on 21.10.2011. Hence, it could be safely concluded that the ld AO had followed the jurisdictional tribunal decision while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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