2013 (12) TMI 602 - HC - Income Tax

Whether the ground of appeal not raised before FAA be raised before the Tribunal through miscellaneous petition - Held that - Where the Miscellaneous petition is dismissed the proper course of action is to file appeal against the original order - The appeal cannot be raised against the rejection of miscellaneous petition - The assessee has deducted the tax at source while paying commission - No substantial question of law arises - Decided against Revenue.

Summary

Issues:
Challenging Tribunal's order on disallowance of commission paid by the assessee. Whether TDS deduction was a valid ground for appeal.

Analysis:
The appeal by the Revenue challenges the Tribunal's order rejecting the appeal on the grounds of no mistake in the original order. The assessee, a trader of silk sarees and garments, disclosed an income of Rs.30,53,320 for the assessment year 2007-08. The Assessing Officer disallowed an amount of Rs.1,39,50,088 paid as commission to various parties, permitting only 2% of the commission on the total turnover. The Appellate Authority, after additional evidence and a spot enquiry, allowed the appeal. The Tribunal declined to interfere based on the remand report, leading to the Revenue's appeal. A Misc. Petition was filed later, arguing that the Appellate Authority should have considered TDS deduction before remanding the matter. The Tribunal dismissed this petition, stating the TDS issue was not raised earlier. The Revenue contended that TDS deduction was a legal question that could be raised at any stage. However, the Court found no merit in this, as the provision applies only if TDS is not deducted, which the assessee claimed to have done. The Tribunal's decision not to entertain the Misc. Petition without the TDS issue being raised before the Appellate Authority was deemed justified. The Court clarified that the appeal was against the Misc. petition, not the original order, and dismissed the appeal, stating no substantial question of law was involved.