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2014 (3) TMI 644 - AT - Income TaxDeduction u/s 201(1) of the Act - Levy of interest u/s 201(1A) of the Act Proper verification of documents not made Held that The Revenue rightly contended that CIT(A) has erred in just considering that the books of accounts, vouchers and bills which was produced before the regular A.O. of the Co. Circle to delete the demand without properly appreciating the facts of the case, the material on record as contained in the order, passed by the A.O. and without examining the books of accounts, which were not produced before the A.O., while creating demand u/s 201(1) and interest u/s 201(1A) of the I. T. Act, 1961 for all the four years. Certain discrepancies were there in the order of the AO and also in the order of CIT(A), who has just relied upon the books of accounts produced before the AO in regular assessment of the assessee without either calling for the books of accounts and examining them himself - there are serious infirmities and flaws in both the orders the order set aside and the matter remitted back to the AO for readjudication Decided in favour of Revenue.
Issues:
Challenging deduction u/s 201(1) and interest u/s 201(1A) for different years. Analysis: The judgment involves four appeals by the Department against a consolidated order passed by Ld. CIT(A) relevant to assessment years 2004-05, 2005-06, 2006-07, and 2007-08. The appeals raised identical facts and issues, leading to a single order for convenience. The dispute centered around the deduction u/s 201(1) and levy of interest u/s 201(1A) on various amounts. The assessee challenged these before the first appellate authority, disputing the AO's conclusions on TDS deductions. The AO had initiated proceedings under sections 201(1) and 201(1A) based on surveys and notices issued, alleging default in TDS deductions under section 194-C of the Income Tax Act, 1961. The Ld. CIT(A) analyzed the submissions and survey records, noting the appellant's denial of TDS liability on various expenses. The CIT(A) observed discrepancies in the AO's approach, highlighting the lack of adverse material on record to support the TDS deductions. The CIT(A) emphasized the importance of proper communication between the AO (TDS) and the regular AO to ensure accurate assessments and tax collections. The CIT(A) found that the appellant had produced books of accounts and vouchers in scrutiny assessments, indicating compliance with TDS provisions. The CIT(A) criticized the AO (TDS) for not gathering sufficient information before alleging TDS defaults, emphasizing the need for coordination and thorough examination of accounts. The Department appealed against the CIT(A)'s order of deletion of demand, arguing for restoration of the AO's order. The Department contended that the CIT(A) erred in relying solely on the books of accounts produced before the regular AO without examining the books not presented before the AO. The counsel for the assessee defended the CIT(A)'s detailed order, asserting that all aspects were explained with documentary evidence. The Tribunal, after considering the arguments and material on record, identified discrepancies in both the AO's and CIT(A)'s orders. Consequently, the Tribunal set aside the orders of both authorities for all four years, directing a fresh adjudication by the AO with proper opportunity for the assessee. In conclusion, the Tribunal allowed all the Department's appeals for statistical purposes, emphasizing the need for a thorough reevaluation of the issues by the AO. The judgment underscores the importance of proper communication, coordination, and examination of evidence in tax assessments to ensure fair and accurate determinations.
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