TMI Blog2020 (10) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the facts of the case are similar to the facts of the case titled Tata Communications Ltd. Vrs. DCIT [ 2019 (12) TMI 442 - ITAT MUMBAI ] as held statutory provisions providing for deduction of tax at source at lower rate is person specific and cannot be extended to the amounts specified by the recipients of the payment while making application for grant of certificate in Form no.13, in terms of section 197 of the Act. Thus, the Tribunal has ultimately held that in such circumstances, if the assessee continues to deduct tax at the rate specified in the certificate, even, in respect of payment made over and above the sum specified in the certificate, it cannot be treated as assessee in default for short deduction of tax. - Decided in favour of assessee. - I.T.A. No. 3194/Mum/2019 - - - Dated:- 7-10-2020 - Shri C. N. Prasad, JM And Shri S. Rifaur Rahman, AM For the Appellant : Smt. Aarti Vissanji, AR For the Respondent : Shri R. Bhoopathi, DR ORDER PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals) - 13 in short referred as Ld. CIT(A) , Mumbai da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on all payments made in that year. However, assessee received short deduction notice in F.Y. 2014-15 wherein, it was stated that due to having exceeded limit in lower deduction certificate, the assessee had to pay the shortfall of TDS along with interest. Therefore, the assessee paid the shortfall of ₹ 1,35,411/- alongwith interest of ₹ 40,623/- during the F.Y. 2014-15. The assessee submitted before Ld. CIT(A) that since there is no non-deduction of TDS, no disallowance can be made u/s 40(a)(ia) of the Act. In support of its arguments, assessee relied on the following decisions:- i) CIT vrs. S. K. Tekriwal (361 ITR 0432) ii) Dish TV India Ltd vrs. ACIT (2017) 60 ITR (T) 162 (Mum-Trib) iii) Three Star Granites (P) Ltd. Vrs. ACIT (204) 32 ITR (T) 398 (Cochin-Trib) iv) Dy. Commissioner of Income Tax -11(2) vrs Chandabhoy Jassobhoy (2012) 49 SOT 448 (Mumbai) v) Apollo Tyres Ltd. Vrs. DCIT 1(1) (2013) 155 TTJ 470 (Cochin Trib) vi) ACIT vrs. Pentagon Systems Services Pvt. Ltd. (ITA No. 6879/Mum/2013) 9. Further it submitted that assessee deducted tax at source as per the certificate issued u/s 197 up to the approved limit of ₹ 7,51,10,831/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and sustained the disallowance made by the AO. 11. Aggrieved with the above order, assessee is in appeal before us on the grounds mentioned below:- 1. The Ld. CIT (A) in the facts and circumstances of the case and in law erred in:- (a) confirming that the amount of ₹ 67,77,550/- was disallowable u/s. 40(a)(ia) of the Act, on account of short-deduction of tax at source as the appellant while making payments had deducted lower tax in respect of part of the amount paid to the deductee. (b) Not following the judicial pronouncements wherein it has been held that mere short deduction of tax would not result into disallowance of expenditure u/s. 40(a)(ia) of the Act. (c) Not following the judicial pronouncement wherein it has been held that if the deduction of tax is made or not made under a bonafide mistake, no disallowance should be made u/s. 40(a)(ia) of the Act. It is humbly prayed that the reliefs as prayed and such other and further reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice, should be granted. The appellant craves leave to amend or alter any ground or add a new grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short deduction certification issued u/s 197 and as per the certificate, the approved limit of short deduction is ₹ 7,51,10,831/-, but assessee continued to deduct the tax at the concessional rate beyond the certificate limit of ₹ 7,51,10,831/- instead of deducting the TDS @ 2%. However, in the subsequent financial year, assessee was brought to the notice of short deduction by the department and assessee has remitted the shortfall amount alongwith interest. However, AO and Ld. CIT(A) has sustained the disasllowance u/s 40(a)(ia) for the above said default on the part of the assessee. Since the facts of the case are similar to the facts of the case titled Tata Communications Ltd. Vrs. DCIT (ITA No. 7084 7085/Mum/2017). For the sake of clarity, which is reproduced below:- 8. We have heard considered rival submissions and perused material on record. We have also carefully examined the decision relied upon by the learned Counsel for the assessee. Insofar as the factual aspect of the issue is concerned, there is no dispute that in terms with section 197(2) of the Act r/w rule 28AA, the Assessing Officer had issued certificates in respect of three parties permitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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