2013 (4) TMI 805 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition u/s 40(a)(ia) for non-deduction of TDS.

Summary:
The Appellate Tribunal ITAT Chennai heard the Revenue's appeal against the order of the Commissioner of Income Tax (Appeals)-IX, Chennai, related to assessment year 2005-06 u/s 147 r.w.s. 143(3) of the Income Tax Act 1961. The Revenue's grievance was the deletion of addition of Rs. 19,07,798/- for commission amount due to non-deduction of TDS u/s 40(a)(ia) by the Assessing Officer.

The DR for the Revenue argued that the deletion of the addition was improper, citing a case law overruling the Special Bench's decision. Despite no representation from the assessee, written arguments supporting the CIT(A)'s order were submitted. The Tribunal proceeded ex-parte against the assessee and considered the Revenue's argument regarding the non-deduction of TDS leading to the disallowance of the commission payments.

After reviewing the case file and arguments, the Tribunal found the Revenue's argument valid in light of the recent decision by the Calcutta High Court overruling the Special Bench. As there were no other issues, the Tribunal allowed the appeal and reinstated the addition made by the Assessing Officer. Consequently, the appeal of the Revenue was allowed, and the order was pronounced on April 18, 2013, in Chennai.