2015 (12) TMI 688 - AT - Income Tax

TDS u/s 194C - Deduction of TDS on lorry high charges - applicability of provisions of sec.40(a)(ia) - Held that - We are of the opinion that the provisions of Sec.40(a)(ia) of the Act are applicable only when the amount of expenditure is payable and outstanding as on 31st March of the previous year in which the assessee has claimed expenditure. The additional information was filed before the Commissioner of Income Tax (Appeals) and no remand report was called for from Assessing Officer. It is apparent that such statements and information s was not available to the Assessing Officer at the time of assessment. Therefore, we are inclined to set aside the order of the CIT(A) and remit the disputed issue to the Assessing Officer with the direction to verify whether any amount is outstanding or payable as on 31st March of previous year relevant to assessment year so as to attract the provisions of sec 40(a)(ia) of the Act. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against disallowance of TDS on lorry hire charges and applicability of sec.40(a)(ia) of the Income Tax Act.

Analysis:
The Revenue filed an appeal against the Commissioner of Income Tax (Appeals)'s order concerning the deduction of TDS on lorry hire charges and the application of sec.40(a)(ia) of the Income Tax Act for the assessment year 2006-2007. The Revenue contested the disallowance of TDS and argued that tax should be deducted by the assessee regardless of the amount paid or payable. The Commissioner of Income Tax (Appeals) allowed the deduction based on the submission of Form 15I and Form 15J, stating that the expenses were already paid before 31.03.2006 and hence sec.40(a)(ia) did not apply. The Commissioner relied on judicial decisions and the Apex Court's ruling upholding similar cases. The Revenue challenged this decision, arguing that the Commissioner did not verify the evidence adequately and should have called for a remand report. The Tribunal set aside the Commissioner's order, directing the Assessing Officer to verify if any amount was outstanding or payable as of 31st March of the relevant year to determine the applicability of sec.40(a)(ia). The Tribunal emphasized that the assessee should have the opportunity to present their case before a decision is made.

In conclusion, the Tribunal allowed the Revenue's appeal for statistical purposes, highlighting the need for a thorough verification of outstanding or payable amounts before applying sec.40(a)(ia) of the Income Tax Act. The decision emphasized the importance of providing the assessee with a fair opportunity to present their case in such matters.