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TMI Blog2016 (5) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the same. In this regard we also find that the Assessee has furnished all the details of assessment particulars of the recipients of payment from the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) of the Act and remand the issue to the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no disallowance u/s.40(a)(ia) of the Act should be made by the AO. In case the recipient parties are not cooperating in providing details, the AO should be directed to call for the information u/s. 133(6) or 131 of the Act, for verification of the same. - Decided in favour of assessee for statistical purpose. - S.A.No.08/Kol/2016 (A/o ITA No.1492/Kol/2015), ITA No.1492/Kol/2015 - - - Dated:- 6-4-2016 - Shri P.M.Jagtap, AM Sri N.V.Vasudevan, JM For The Appellant : Shri Miraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08,762 31,088 6 Manmath Kumar Bhutia 48,92,262 48,924 7 Sushant Kumar Behara 9,11,590 9,116 8 Babuli Behera 12,13,786 12,138 9 Dilip Kumar Patra 56,800 568 10 Supreme Industrial 7,65,400 7,654 11 Manoranjan Parida 37,500 375 12 Bijpya Kumar Dehury 10,80,881 10,809 13 Magic Pool 1,90,400 1,904 14 Monalisa Construction 9,30,056 9,301 15 Asha Communication 8,600 86 16 Siba Prasad Satapathy 17,57,486 17,575 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of these parties are as follows :- Parties who gave 26A form (Available as on date) 9. It was submitted that out of 18 parties the assessee collected form 26A from 6 parties where the payment was ₹ 1,14,92,300 and the balance 12 parties where the payment was ₹ 84,38,015 the form 26A could not be collected. This is because the other parties did not cooperate with the assessee and hence the copies of form 26A could not be collected from them. It was also contended that the assessee did not have powers to force the other parties to submit Form 26A and therefore due to lack of statutory powers the assessee could not collect the same. 10. It was argued that the Assessing Officer and first appellate authorities are vested with statutory powers u/s 133(6) or 131 and or other provisions and they could have made inquires with the parties or their respective Assessing Officer. In this regard it was submitted that all the relevant details of the payees were furnished and are available on record with their PAN and AO details. 11. It was pointed out that ITAT, Kolkata in the case of Ramakrishna Vedanta Math v. Income-tax Officer, Ward 59 (1), Kolkata, [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken. Learned counsel is quite right in his submission that, as a result of the judgment of Hon 'ble Allahabad High Court in Jagran Prakashan Ltd.'s case (supra) and in the absence of anything contrary thereto from Hon'ble jurisdictional High Court, there is a paradigm shift in the manner in which recovery provisions under section 201 (1) can be invoked. As observed by Their Lordships, the provisions of Section 201(1) cannot be invoked and the tax deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly . Once this finding about the non payment of taxes by the recipient is held to a condition precedent to invoking Section 201(1), the onus is on the Assessing Officer to demonstrate that the condition is satisfied. No doubt the assessee has to submit all such information about the recipient as he is obliged to maintain under the law, once this information is submitted it is for the Assessing Officer to ascertain whether or not the taxes have been paid by the recipient of income. This approach, in our humble understanding, is in consonance with the law laid down by Hon 'ble Allahabad High Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing officer will give a due and fair opportunity of hearing to the assessee and dispose of the matter by way of a speaking order. We direct so. 12. It was submitted that the above decision ITAT Kolkata in the above mentioned case will also apply for the purposes of Section 40(a)(ia) of the Act. Further reliance was also placed on the decision of the ITAT Kolkata in the case of Vas Electronics Vs. ACIT, ITAT Kolkata in I.T.A No. 662/Kol/2013 dated 24-11-2015 wherein it was held as follows: 3. Briefly stated facts are that assessee has claimed labour charges at ₹ 55, 440/-, carriage inward charges amounting to ₹ 62,07,498/- and hire charges amounting to ₹ 29, 12, 123/- in the P L Account, but no TDS was deducted u/s. 194C of the Act. Ld. Counsel for the assessee before us now clearly admitted that the assessee has not deducted TDS u/s. 194C but he is obliged to deduct TDS u/s. 194C of the act. The AO applied the provisions of section 40(a)(ia) of the Act on the above three payments and made disallowance. Aggrieved, assessee preferred appeal before CIT(A) , who also confirmed the action of AO. Aggrieved, now assessee is in second appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.139(1) of the Act. 15. We have given a very careful consideration to the rival submissions. The CIT(A) has held that the second proviso to Sec.40(a)(ia) of the Act will apply in the present case and that applicability of the second proviso to Sec.40(a)(ia) of the Act which was introduced by the Finance Act, 2012 w.e.f. 1.4.2013 was retrospective in operation and was to apply w.e.f. 1-4-2005, being the date from which sub-clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004. The Hon ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (I) Pvt.Ltd., in ITA No.160/2015 judgment dated 26.8.2015 has taken the view that the insertion of the second proviso to Sec.40(a)(ia) of the Act is retrospective and will apply from 1.4.2005. Once it is held that the Assessee is entitled to the benefit of 2nd proviso to Sec.40(a)(ia) of the Act, the CIT(A) ought to have directed the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. To the extent the recipients from the Assessee have so included the sum in their returns of income and filed the same, no di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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