2015 (8) TMI 927 - HC - Income Tax

TDS liability - Tribunal found that CIT(A) had rightly considered that tax had been deducted and deposited in the Government treasury - Held that - The issue has been decided based on the material placed on record by the assessee before the appellate authorities which has gone into by both the appellate authorities, and it being essentially a finding of fact, in our view no question much less substantial question of law can be said to arise out of the order of Tribunal. However, while dismissing the appeal we direct the Assessing Officer and give liberty to check and verify correctness of the claim as to whether the tax had been deducted and deposited in the Government treasury account, which was claimed on the payment of ₹ 84,56,827/-, and the Assessing Officer is at liberty to initiate proceedings, in case not satisfied with the claim put forward before the appellate authorities, in accordance with law.

Summary

Issues:
1. Whether tax was deducted at source on the claimed expenses by the assessee.
2. Whether the addition made by the Assessing Officer was justified.
3. Whether the CIT(A) and Tribunal correctly considered the evidence provided by the assessee.
4. Whether the Tribunal's decision was based on proper reasoning and evidence.
5. Whether the matter should be restored to the Assessing Officer for further examination.

Analysis:
1. The primary issue in this case revolved around whether tax was deducted at source on the expenses claimed by the assessee. The Assessing Officer had made an addition of a significant amount as the tax was allegedly not deducted at source. However, the CIT(A) and Tribunal found that the assessee had indeed deducted and deposited tax in the Government treasury. The CIT(A) verified the receipted challans showing the tax deposited, leading to the deletion of the addition.

2. The Assessing Officer's decision to make the addition was based on the belief that tax was not deducted at source. However, the CIT(A) and Tribunal, after examining the evidence provided by the assessee, concluded that the tax had been deducted and deposited as required by law. This discrepancy in understanding led to the appeal by the revenue.

3. The CIT(A) and Tribunal considered the evidence presented by the assessee, including the challans showing tax deposits. Both appellate authorities found that the tax had been deducted and deposited correctly. The Tribunal observed that the CIT(A) had verified the challans and dismissed the revenue's appeal based on the evidence presented.

4. The revenue contended that the Tribunal's decision was flawed as it did not provide independent reasoning and merely accepted the CIT(A)'s findings. However, the High Court, after hearing arguments, upheld the decision of the appellate authorities. The High Court found that the issue had been thoroughly examined based on the evidence provided and deemed it a finding of fact.

5. The revenue further argued that the matter should be sent back to the Assessing Officer for a detailed examination. However, the High Court disagreed, stating that the issue had been adequately addressed by the appellate authorities based on the evidence on record. The High Court directed the Assessing Officer to verify the correctness of the tax deduction claim and take appropriate action if discrepancies were found, but did not find any substantial question of law to arise from the Tribunal's order.