9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1021 - AT - Income TaxTDS u/s 40(a)(ia) - wrong section had been mentioned - assessee had paid rent - TDS u/s 194C v/s 194I - HELD THAT - Wrong mentioning of section does not amount to wrong application of jurisdiction. Lack of jurisdiction is in respect of procedure of assessment. Once an assessment has been validly initiated, typographical errors could take place in respect of mentioning of particular section. Admittedly, the Assessing Officer has invoked his powers u/s.40(a)(ia) of the Act for the purpose of making the disallowance on account of non-deduction of TDS. Admittedly, reference to the relevant section under which TDS should have been done is wrong. This does not excuse the assessee for non-deduction of TDS. This being so, we are of the view that the findings of the ld CIT(A) in deleting the disallowance is on wrong footing, hence, same stands reversed and the order of the AO on this issue stands restored. TDS u/s 194C - Non-deduction of TDS in respect of payments to transporters - CIT(A) deleted the disallowance by holding that there is no contract between the assessee and the transporters and, therefore, no deduction of TDS u/s.194C of the Act is called for - HELD THAT - In the present case, the assessee has not produced PAN details in respect of the contractors to an extent of Rs.28.74 crores. In this regard, we are of the view that the interest of justice would be served if the assessee is granted another opportunity to produce the PAN details before the AO in the light of sub-clause(6) of the provisions of section 194C. In these circumstances, the order of the ld CIT(A) on this issue stands reversed and the issues are restored to the file of the AO for granting the assessee adequate opportunity to produce the PAN details as required under sub-clause(6) of Section 194C of the Act in respect of the transport contract. TDS u/s 194H - disallowance of commission paid on account of non-deduction of TDS - HELD THAT - AO has asked the assessee to produce the proof. The assessee has produced only handmade vouchers which were not verifiable. A perusal of the order of the ld CIT(A) shows that the ld CIT(A) has given a categorical finding that the assessee has not given even the name and address to whom, the commission has been paid. This being so, we are of the view that the findings of the ld CIT(A) on both the issues are on right footing and does not call for any interference Disallowance of donation paid by the assessee - Coming to the issue of donation to four organizations, an amount is the payment to school. We fail to understand that how a school would block the business of the assessee on account of non-payment. If at all, this payment had been made for non-business requirements These are nothing but gratuitous payments. It is not allowable expenditure. Appeal of the assessee stands dismissed.
Issues Involved:
1. Deletion of disallowance under Section 40(a)(ia) due to wrong section mentioned by the Assessing Officer. 2. Deletion of disallowance for non-deduction of TDS on payments to transporters under Section 40(a)(ia). 3. Disallowance of commission paid due to non-deduction of TDS under Section 194H. 4. Disallowance of donations paid to various organizations. Issue-wise Detailed Analysis: 1. Deletion of Disallowance under Section 40(a)(ia) Due to Wrong Section Mentioned: The revenue appealed against the deletion of disallowance made by the Assessing Officer (AO) under Section 40(a)(ia) for non-deduction of TDS on rent paid, where the AO incorrectly mentioned Section 194C instead of Section 194-I. The CIT(A) deleted the addition on the grounds of the wrong section being mentioned. The Tribunal held that the wrong mentioning of the section does not amount to a wrong application of jurisdiction. The assessment was validly initiated, and typographical errors could occur. The Tribunal reversed the CIT(A)'s decision, restoring the AO's disallowance, emphasizing that the assessee's failure to deduct TDS was not excused by the typographical error. 2. Deletion of Disallowance for Non-deduction of TDS on Payments to Transporters: The revenue challenged the deletion of disallowance under Section 40(a)(ia) for non-deduction of TDS on payments to transporters. The AO disallowed Rs. 28.74 crores due to non-production of PAN details and non-deduction of TDS under Section 194C. The CIT(A) deleted the disallowance, stating no contract existed between the assessee and the transporters. The Tribunal referred to the Supreme Court's decision in Shree Choudhary Transport Company vs. ITO, which held that even if no written contract existed, the nature of transactions indicated an implied contract. The Tribunal found that the transporters raised bills, indicating the existence of a contract. The Tribunal reversed the CIT(A)'s order and restored the issue to the AO for the assessee to produce PAN details as required under Section 194C(6). 3. Disallowance of Commission Paid Due to Non-deduction of TDS under Section 194H: The assessee appealed against the disallowance of commission payments totaling Rs. 45,63,980/- due to non-deduction of TDS under Section 194H. The assessee claimed the commission was paid for obtaining work and provided details to the AO. However, the AO and CIT(A) found the evidence insufficient, noting the absence of verifiable proof and details of the recipients. The Tribunal upheld the CIT(A)'s findings, stating that the assessee failed to substantiate the claim and show that TDS was deducted, thus dismissing the appeal. 4. Disallowance of Donations Paid to Various Organizations: The assessee also appealed against the disallowance of donations totaling Rs. 2,22,654/- made to four organizations. The assessee argued that the donations were welfare measures necessary for business continuity. The Tribunal found no business necessity or exigency for these payments. Specifically, the payment to a school could not be justified as a business requirement. The Tribunal upheld the CIT(A)'s decision, categorizing the donations as gratuitous payments not allowable as expenditure, and dismissed the appeal. Conclusion: The Tribunal partly allowed the revenue's appeal for statistical purposes, reversing the CIT(A)'s deletions and restoring the issues to the AO for further examination. The assessee's appeal was dismissed in its entirety, with the Tribunal upholding the disallowances made by the AO and CIT(A).
|
