2018 (1) TMI 1736 - AT - Income Tax

TDS u/s 194A - Addition u/s 40(a)(ia) - appellant has paid interest to a number of person without deducting tax at source - assessee as stated that the AO in the assessment order has stated that in the instant case under consideration the assessee was not to be treated as assessee in default in view of the first proviso to section 201(1) - HELD THAT - This proviso to Section 201 inserted w.e.f. 01/07/2012 wherein it is stated that the appellant would not be treated as assessee in default if the concerned NBFC has furnished its return of income U/s 139 of the Act and has taken into account such sums for computing income in return of income and the persons furnishes a certificate to this effect from an accountant in such form as prescribed in Form No. 26A After considering both the sides on this issue and considering the decision of Hindustan Coca Cola Beverages (P) Ltd. 2007 (8) TMI 12 - SUPREME COURT and other various other judicial pronouncements the Bench is of the view that this matter needs to be restored back to the file of the Assessing Officer to verify the fulfillment of technical requirement of furnishing certificates of accountant and also to verify the fact that return of income have been filed by payee and paid taxes due thereon. Appeal of the assessee is allowed for statistical purposes only.

Summary

Issues:
1. Disallowance under section 40(a)(ia) of the Income Tax Act
2. Charging of interest under sections 234B, 234C, 234D, and withdrawal of interest under section 244A

Issue 1: Disallowance under section 40(a)(ia) of the Income Tax Act:
The appeal was filed by the assessee against the order of the ld. CIT(A)-I, Jaipur for the A.Y. 2012-13, challenging the addition and disallowances made under section 40(a)(ia) of the Act. The Assessing Officer disallowed Rs. 13,24,082/- for non-deduction of TDS on interest payments made to various parties. The ld. CIT(A) upheld the addition, stating that the appellant failed to furnish Form No. 26A certificates from the concerned persons as required by the first proviso to section 201(1) of the Act. The appellant argued that the amendments to the proviso made by the Finance Act, 2012 were retrospective, citing judicial precedents. The Tribunal, considering various judgments, decided to restore the matter to the Assessing Officer to verify the fulfillment of technical requirements and compliance with the law.

Issue 2: Charging of interest under sections 234B, 234C, 234D, and withdrawal of interest under section 244A:
The appellant denied liability for charging and withdrawing interest under sections 234B, 234C, 234D, and 244A of the Act. The Tribunal, after considering submissions from both sides and precedent cases like Hindustan Coca Cola Beverages (P) Ltd. Vs. CIT, decided to remand the issue back to the Assessing Officer for a fresh decision. The Tribunal emphasized the need to verify the technical requirements and compliance with the law regarding the charging and withdrawal of interest. The appeal was allowed for statistical purposes only, and the matter was directed to be decided de novo after providing the assessee with a fair opportunity to present their case.

In conclusion, the judgment by the Appellate Tribunal ITAT Jaipur addressed the issues of disallowance under section 40(a)(ia) of the Income Tax Act and the charging of interest under relevant sections, emphasizing the importance of compliance with legal provisions and the need for a thorough verification process by the Assessing Officer.