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TMI Blog2023 (12) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... of News Network, broadcasting and telecasting. The return for the year was electronically filed on 29.11.2014 declaring loss of Rs. 4,47,68,848/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 5. While scrutinizing the return of income the AO noticed sundry payable in the balance sheet and asked the assessee to file confirmation of sundry creditors. The assessee showed its inability to file the confirmation. Notice u/s. 133 (6) of the Act was issued. The AO summarized the situation :- 6. In so far as item at Sr. No. 1 and 3 above where the notice u/s. 133(6) was not served, the AO made the addition of Rs. 6110570/-u/s. 41 of the Act. 7. In so far as item No.2 and 4 are concerned where the parties have confirmed the lesser amount the AO made the addition of Rs. 12908555/- u/s. 41 of the Act. 8. Proceeding further the AO found that the assessee has made payment to contractors on which tax has been deducted at source but the same has not been deposited before the due date. Invoking the provisions of section 40a(ia) of the Act the AO made the addition of Rs. 8852509/-. 9. Proceeding still further since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41(1) of the Act, therefore, contemplates existence of a debt/liability and the remission or cessation thereof in the year under consideration. Therefore, for the purpose of taxing any income on account of remission or cessation of liability, the Assessing Officer has to establish that there was an existing liability and that there was remission or cessation of such liability in the previous year relevant to the assessment year in which such income is sought to be taxed." 15. A similar view was taken by the Hon'ble Punjab and Haryana High Court in the case of Sita Devi Juneja 325 ITR 593 wherein the Hon'ble High Court held as under :- "In view of these facts, the CIT(A) as well as the ITAT have rightly come to the conclusion that the Assessing Officer has wrongly invoked the Explanation l of section 41(1) of the Act and made the aforesaid addition on the basis of presumption, conjectures and surmises. It has been further found that the Assessing Officer failed to show that in any earlier year, allowance of deduction had been in respect of any trading liability incurred by the assessee. It was also not proved that any benefit was obtained by the assessee concerning such trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 12.5.2017 AY 2012-13 Smt Kanta Yadav vs. ITO "6. We have considered rival submissions and find that issue is covered in favour of the assessee by order of ITAT Jaipur Bench in the case of Shri Rajendra Yadav vs. ITO (pages 30-41 of JPB) and Smt. Sonu Khandelwal vs. ITO. In these orders it was held that the disallowance u/s 40(a)(ia) to be restricted to 30% of the addition. In these orders the Tribunal has considered the amended provisions of section 40(a)(ia) of 1.T. Act. In these orders the assessment year's involve was 2007-08 and 2008-09. In the present appeal the assessment year is 2012-13. Therefore facts are identical. In this view of the matter and following the above decisions of Jaipur Bench, we set aside and modify the orders of the authorities below and direct the Assessing Officer to restrict the addition to 30% of the total addition made on account of deduction of TDS u/s 40(a)(ia) of the Act". 22. Similarly in ITA No.1869/M/2014 it has been held as under :- ii) ITA No 1869/M/2014 dated 24.5.2017 AY 2006-07 M/s Asphalt India Corporation vs. DCIT "4. We have heard the rival submissions, perused the material before us. We find that the assessee itself had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.4.2015, in our view the benefit of the amendment should be given to the assessee either by directing the AO to confirm from the contractors, namely, M/s. Garvit Stonex, M/s. Chanda Marbles and M/s. Nidhi Granites as to whether the said parties have deposited the tax or not and further or restrict the addition to 30% of Rs. 7,51,322/-. In our view, it will be tied of justice if the disallowance is only restricted to 30% of Rs. 7,51,322/-. Accordingly, the appeal of the assessee is partly allowed in the above said manner." Further this Tribunal has taken a similar view on this issue by following the above decisions and therefore even if there is divergent view taken by the Hon'ble Kerala High Court the view taken in favour of the assessee by this Tribunal by following the various decisions are to be followed to maintain the rule of consistency. Accordingly, We are of the view the second proviso to section 40(a)(ia) of the Act would be effective retrospective as it was undisputedly inserted to removable the hardship faced by the assesses. Hence, we set aside this issue to the record of the Assessing Officer for limited purpose to verify the fact that the interest income receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notices are as under :- 33. From the above notices it is clear the AO has not specified under which limb of the section he is proposing the levy of penalty. This issue is now been well settled by the Hon'ble Jurisdictional High Court of Delhi in the case of Pr. CIT Vs. Sahara India Life Insurance Company Ltd. ITA 475 of 2019, while deciding the identical issue held as under :- "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of inc me or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) , the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of2016 by order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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