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TMI Blog2015 (8) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the matter. The relevant law governing the Cross Objections is found in Sub-Section 4 of Section 253 of the Act, which is re-produced below: "[(4) The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) or the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order77 of the Assessing Officer (in pursuance of the directions of the Dispute Resolution Panel) or Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or sub-section (3A).]" 3. From the above, it is clear that the provisions of the Act does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income at Rs. 4,85,000/-. Later, the Commissioner of Income-Tax, Gutur invoking the provisions of Sec.263 of the I.T.Act required the appellant to state the objections if any. In response to the said notice, the petitioner filed detailed explanation before the learned Commissioner of Income-Tax. The learned CIT passed an order under Section 263 of the I.T.Act on 25.2.2014 and directed the Assessing Officer to modify the assessment. The said order passed U/s. 263 was served on the appellant on 21.4.2014. The period of 60 days expired on 20.6.2014. The appeal is being filed before the Hon'ble Income-Tax Appellate Tribunal, Hyderabad on 14.7.2014. There is a delay of 24 days in filing the appeal. In this regard the petitioner humbly submits that when the order of the CIT was received he was under the bonafide belief that no appeal need be filed against such order and the appeal lies against the order to be passed by the Assessing Officer in consequence to the order U/s. 263 of the I.T.Act. In the mean time, the Assessing Officer passed an order U/s. 143(3) r.w.s. 263 of the I.T.Act. At this stage the petitioner approached an Advocate for filing the appeal against the order U/s. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed before CIT that the proposed revision U/s. 263 may be dropped. The Ld.CIT brushing aside the explanation offered by the appellant had passed an order dt. 25-02-2014 U/s. 263 holding that the assessment order was erroneous and prejudicial the interest of Revenue in as much as the above issues were not considered and added by the AO in the assessment order. Being aggrieved, the appellant had come up with the present appeal before us. 8. The appellant had raised 8 Grounds of Appeal. Ground No. 1 & 8 are general in nature, does not require any adjudication. Appellant in Ground No.2 to 5 challenges the directions of CIT for making addition of Rs. 3,63,720/- in respect of payments made to M/s. Coramandal Fertilizers Ltd., and Rs. 5,54,000/- in respect of payments made to M/s. Ravindra Agro Service Centre, under the provisions of Section 40A(3). In Ground No.6, challenged the directions of Ld.CIT for making addition of Rs. 98,193/- under the provisions of Section 40(a)(ia) of the Act. In Ground No.7 he challenged the very legality of the order passed by CIT U/s. 263 of the Act. We shall now take up the Grounds of Appeal Nos. 2 to 5. 9. It was submitted on behalf of the appellant th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the payees was below the taxable limit hence Form 15H was obtained from them and it was claimed to have been submitted to the CIT, Guntur by post, but no proof in support of the dispatch by post was furnished before the CIT. However, a copy of Form 15H was filed before the AO. This fact has not been disputed by the Revenue. The CIT directed the AO to disallow the same for failure to adduce evidence in support of dispatch of Form 15H by post. The Ld. Counsel submitted that though no proof in support of dispatch of Form 15H to the CIT could be filed, copy of Form 15H was filed before the AO. Hence, he submitted that the provisions of Section 40(a)(ia) cannot be made applicable to the present case. On the other hand, Ld. CIT-DR relied on the order of CIT. 13. We have heard the rival submissions and perused the material on record. Neither the AO nor the CIT disputed the fact of filing copy of Form 15H before the AO. No doubt, it is fact that the appellant failed to produce proof in support of dispatch of Form 15H to the CIT. In our considered opinion, this by itself does not entail any addition. It is only technical breach of law and the act provides for separate penal provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Departmental representative fairly accepted that as per observations made by the Commissioner of Income-tax (Appeals) in the impugned order, the assessee obtained Forms 15G and 15H from the customers to whom payment of interest was made and no tax was deducted at source, at the same time it was the duty of the assessee to deliver these forms before the 7th day of the month next following the month in which form was furnished to it. The Departmental representative supported the orders of the authorities below and submitted that the assessee-bank is duty bound to deliver and submit Forms 15G and 15H to the jurisdictional Commissioner of Income-tax and omission in this regard is attributable to the assessee for which the assessee has no bona fide reason. 7. On careful perusal of record and decisions relied on by the assesseeappellant, at the outset, we observe that undisputedly, the assessee-bank obtainedForms 15G and 15H from the customers to whom the payment of interest was made and no tax was deducted at source. Further, we also observe that these forms were not submitted to the jurisdictional Commissioner of Income-tax, Faridabad, within the prescribed time as per provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med because at the time of paying the interest to the loan creditors, he has to perforce rely upon the declarations filed by the loan creditors and he was not expected to embark upon an enquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. That would be putting an impossible burden on the assessee. That apart subsection (1A) of section 197A merely requires a declaration to be filed by the payee of the interest and once it is filed the payer of the interest has no choice except to desist from deducting tax from the interest. The sub-section uses the word "shall" which leaves no choice to the assessee in the matter. In the case of payment of leave travel concession and conveyance allowance to employees who are liable to deduct tax from the salary paid to the employees under section 192, the Supreme Court has held in CIT v. Larsen & Toubro Ltd. [2009] 313 ITR 1 (SC), that the assessee was under no statutory obligation under the Act or the Rules to collect evidence to show that the employee had actually utilised the money paid towards leave travel concession/conveyance allowance. The position is stronger under section 197A which do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once the assessee has obtained the Form No. 15G from the payee assessee, has no legal obligation to deduct the tax on the payment made to payee. We find no justification in order to sustaining the said addition. Accordingly, the same is deleted." 9. On perusal of the decision of the Income-tax Appellate Tribunal, Mumbai Bench, in the case of Karwat Steel Traders (supra), we observe that the same issue has been dealt in paragraph 4.1 in favour of the assessee which reads as under : "4.1 As can be seen from above provision, the amount cannot be allowed as deduction only in the event when tax is deductible at source under Chapter-XVIIB and such tax has not been deducted or, after deduction has not been paid. In this case, the assessee was to deduct tax under provisions of section 194A. Section 194A is further qualified by the provisions of section 197A(1A) wherein if a person furnishes a declaration in writing in prescribed Form and verified in the prescribed manner to the effect that tax on his estimated total income is to be included in computing his total income will be nil, there is no need to deduct tax. The assessee has received such Forms as prescribed from those persons to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest paid. In this sub-section, the word "shall" has been used by the Legislature which leaves no alternative to the payer in the matter but to accept declaration so filed by the payee. Under section 197A(1A) of the Act if the payee of the interest has filed the prescribed form to the effect that he is not liable to pay any tax in computing the total income, then the payee shall not deduct any tax at source from the interest. This provision does not impose any obligation on the payer to find out the truth of the declaration filed by the payee. Respectfully following the decision of the Income-tax Appellate Tribunal, Mumbai Bench, in the case of Vipin P. Mehta (supra), we are inclined to hold that if the assessee has delayed the filing of declaration with the office of the jurisdictional Commissioner of Income-tax, within the time limit specified in sub-section (2) of section 197A, that is a distinct omission or default for which a penalty is prescribed. As per section 273B of the Act, no penalty shall be imposed under any of the clauses of sub-section (2) of section 272A for the delay, if the assessee proves that there was a reasonable cause for the delay. We further observe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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