2015 (12) TMI 1465 - AT - Income Tax

Disallowance of interest paid to various parties invoking the provisions of section 40(a)(ia) - assessee had belatedly filed form 15G before the Ld.A.O and also before the Ld. CIT. - Held that - From the facts of the case, it appears that the assessee had filed the Form 15G belatedly before the Ld. A.O except from two individuals. Since there were defect in the Form 15G because the same was undated, the Ld. Assessing Officer as well as the Ld. CIT disallowed the interest expenses claimed by the assessee by invoking the provisions of section 40(a)(ia) of the Act. The assessee has relied in the decision of the Jurisdictional High Court in the case of Vijay Hemant Finance & Estates Ltd., 1999 (4) TMI 65 - MADRAS High Court which is identical to the case of the assessee wherein the Hon ble High Court remitted the matter back to the file of Ld. Assessing Officer for providing an opportunity to the assessee to rectify the defects in the Form 15H. Following the aforesaid decision of the Hon ble Jurisdictional High Court, we also hereby remit the matter back to the file of Ld. Assessing Officer with similar direction. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
- Disallowance of interest paid to various parties under section 40(a)(ia) of the Act for not filing Form 15G before the due date.

Analysis:
1. The appellant, an individual engaged in share trading and services, filed an appeal against the order of the Commissioner of Income Tax disallowing interest paid to parties amounting to Rs. 6,49,919 under section 40(a)(ia) of the Act.
2. The Assessing Officer disallowed the interest expenses as TDS was not deducted on the amount claimed. The appellant submitted Form 15G belatedly, but the forms were undated, leading to disallowance under section 40(a)(ia).
3. The CIT (A) upheld the AO's decision, stating that the appellant failed to prove timely submission of Form 15G as required by Rule 29C of IT Rules, 1962. The appellant argued that TDS was not deductible as Form 15G was filed before the authorities.
4. The Tribunal noted defects in the Form 15G submission and the absence of dates on the forms. Citing a High Court decision, the Tribunal remitted the matter back to the Assessing Officer for rectification, emphasizing the need for an opportunity to correct defects.
5. Based on the High Court precedent, the Tribunal allowed the appeal for statistical purposes, directing a reevaluation by the Assessing Officer with proper consideration of the Form 15G submissions.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision based on legal precedents and procedural requirements.