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2014 (3) TMI 504 - AT - Income TaxCondonation of delay Proper guidance not provided to the assessee - Held that - The Assessee s counsel while appearing before CIT(A) did not guide the assessee properly and only after when the assessee engaged the present counsel, he has advised him to file the CO - there is no evidence or supporting document to suggest that the earlier counsel has wrongly advised the assessee - There is no confirmation from the earlier counsel what he has advised the assessee - nothing has been brought on record by the assessee with regard to the fact that which counsel has advised the assessee as stated in the affidavit and there is no affidavit or letter from the concerned counsel, who has wrongly advised the assessee. The law assists those who are vigilant, not those who sleep over their rights - The delay cannot be condoned simply because the assessee s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief - The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions - as stated in the affidavit, the reasons advanced by the assessee are not supported by any cogent evidence thus, condonation of delay in filing the appeals of the assessee cannot be accepted on the ground that the assessee was not able to establish that it has prevented by a reasonable cause in filing these appeals belatedly Decided against Assessee. Disallowance u/s 40(a)(ia) of the Act Held that - There was no merit in the appeal of the Revenue - the amount has been taxed in the hands of Kranthi Constructions only - There may be so many reasons for accounting this contract receipt in the hands of the assessee and it was pleaded before us that because of mistake in 26AS issued by the contractor, the entry was made in the books of account of the assessee - the amount was offered for taxation in the hands of Kranthi Constructions and it cannot be brought to tax in the hands of the assessee. Being so there is no question of deduction of TDS by the assessee on the payment received by the Kranthi Constructions. There is insertion of second proviso to section 40(a)(ia) by Finance Act, 2012 w.e.f. 1.4.2013 wherein stated that disallowance u/s. 40(a)(ia) of the Act need not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act it is retrospective in nature since it has been introduced to eliminate unintended consequences which may cause undue hardship to the tax payer Relying upon Antony D. Mundackal vs. ACIT 2013 (12) TMI 67 - ITAT COCHIN thus, there cannot be any disallowance u/s. 40(a)(ia) of the Act the order of the CIT(A) upheld Decided against Revenue.
Issues Involved:
1. Delay in filing the Cross Objection (CO) by the assessee. 2. Disallowance of Rs. 49,70,460 under section 40(a)(ia) of the IT Act. 3. Disallowance of Rs. 1,29,980 under section 40(a)(ia) of the IT Act. 4. Disallowance of Rs. 1,52,09,336 under section 40(a)(ia) of the IT Act. Detailed Analysis: 1. Delay in Filing the Cross Objection (CO): The assessee filed a petition to condone a 48-day delay in filing the CO, citing incorrect professional advice from their previous counsel. The Tribunal observed that the reasons provided were not supported by any cogent evidence, such as an affidavit or letter from the previous counsel. The Tribunal emphasized that the law assists those who are vigilant and that the delay cannot be condoned merely out of sympathy or benevolence. The Tribunal concluded that the assessee failed to establish a reasonable cause for the delay and thus declined to condone it, resulting in the dismissal of the CO. 2. Disallowance of Rs. 49,70,460 under section 40(a)(ia): The CIT(A) noted that the issue of disallowance of Rs. 49,70,460 did not require adjudication since it was consequent to an order under section 263 of the Act, where the assessee admitted that no TDS was made. Consequently, this matter reached finality and was not adjudicated further. 3. Disallowance of Rs. 1,29,980 under section 40(a)(ia): The AO disallowed Rs. 1,29,980 for non-deduction of TDS paid to Babu Tata Hitachi. However, the CIT(A) observed that this issue had already been addressed in a previous Tribunal decision, which had deleted the disallowance. The Tribunal found no merit in the Revenue's appeal on this issue, as it had already been decided in favor of the assessee. 4. Disallowance of Rs. 1,52,09,336 under section 40(a)(ia): The AO disallowed Rs. 1,52,09,336, noting that no TDS was made on the third bill netted at this amount, which was directly paid to M/s Kranthi Constructions. The CIT(A) accepted the assessee's submission that the amount was directly credited to the books of another constituent of the JV, M/s Kranthi Constructions, based on an MOU. The CIT(A) found no reason to disagree with the assessee's claim, supported by bank statements and a confirmation letter from M/s Kranthi Constructions. The Tribunal upheld the CIT(A)'s decision, noting that the amount was taxed in the hands of M/s Kranthi Constructions and thus did not require TDS deduction by the assessee. The Tribunal also referenced the insertion of the second proviso to section 40(a)(ia) by the Finance Act, 2012, which was considered retrospective in nature, eliminating the need for disallowance if the assessee was not deemed in default under section 201(1). Conclusion: The Tribunal dismissed both the Revenue's appeal and the assessee's CO, confirming the CIT(A)'s decisions on the disallowance issues and the rejection of the delay condonation request.
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