2012 (11) TMI 220 - AT - Income Tax

Recalculation of Tax and Interest u/s 201(1A) assessee in default - Held that - Following the decision of court in case of R. Giridhar Vs. CIT, 1981 (4) TMI 58 - KARNATAKA HIGH COURT It would be appropriate if the ITO affixes his signature after the computation of tax is made and below such computation also if it is made separately- Assessing Officer s order is not a speaking order and the CIT(A) has merely directed the Assessing Officer to recalculate the tax payable u/s 201(1) without considering the fact that the order of the Assessing Officer is cryptic - order of the CIT(A) is set aside and restore the issue to the file of the Assessing Officer directing him to pass a speaking order - In the result, appeal of the assessee is allowed for statistical purposes.

Issues involved:
Appeals against orders of CIT(A) for assessment years 2006-07 to 2009-10, common issues, validity of order u/s 201(1A) of Income Tax Act, 1961, absence of details in annexure, signature on the order, compliance with statutory provisions, applicability of sections 194A and 194C, relief for taxes paid by deductees, correctness of CIT(A) order, necessity of speaking order, directions for reassessment by Assessing Officer.

Analysis:

1. Validity of Order u/s 201(1A):
The appeals raised concerns regarding the validity of the order passed by the Assessing Officer (AO) under section 201(1A) of the Income Tax Act, 1961. The contention was that the order lacked essential details and did not comply with statutory provisions. The CIT(A) upheld the order, stating that the annexure formed part of the assessment order, and no further signature or seal was necessary. However, the appellant argued that the order was cryptic and defective, failing to provide reasoning or conclusion, as required by law.

2. Applicability of Sections 194A and 194C:
The CIT(A) examined the grounds on merits related to the invocation of sections 194A and 194C. The appellant's argument that these sections were not applicable due to payments made to non-banking financial institutions for equipment acquisition was dismissed. It was determined that tax deduction obligations remained despite the nature of payments made. The CIT(A) also dismissed additional grounds raised by the appellant due to lack of substantiating evidence.

3. Relief for Taxes Paid by Deductees:
The appellant contended that credit for taxes paid by deductees should be considered in their hands. The CIT(A) directed the AO to re-calculate tax under section 201(1) considering taxes paid by deductees individually. This direction was based on the Supreme Court decision in Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. CIT [2007] 293 ITR 226.

4. Necessity of Speaking Order:
The learned counsel for the appellant argued that the order lacked essential details required for an order under section 201(1), such as nature of payment, TDS details, and interest calculations. The Tribunal found that the AO's order was not a speaking order and directed reassessment, emphasizing the importance of a comprehensive order following legal principles to avoid controversies.

5. Directions for Reassessment:
The Tribunal set aside the CIT(A)'s order and restored the issue to the Assessing Officer for passing a detailed, speaking order in compliance with legal standards. Citing previous court decisions, the Tribunal emphasized the need for a valid and complete assessment order signed by the Assessing Officer. The Assessing Officer was instructed to provide the appellant with a hearing opportunity during the reassessment process.

6. Conclusion:
All appeals were allowed for statistical purposes, with the Tribunal emphasizing the importance of adherence to legal requirements in assessment orders and the necessity of speaking orders to ensure transparency and compliance with statutory provisions. The Assessing Officer was directed to conduct reassessment following the principles laid down by higher courts.

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