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TMI Blog2016 (9) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 purposes. - I.T.A. No. 1919/KOL/ 2013 - - - Dated:- 27-7-2016 - Shri P.M.Jagtap, Accountant Member and Shri S.S. Viswanethra Ravi, Judicial Member For The Assessee : Shri Subhash Agarwal, Advocate For The Department : Shri SallongYaden, Addl.CIT, Sr. D.R. ORDER Per Shri S.S. Viswanethra Ravi :- This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-XXIV, Kolkata dated 15.02.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... don Woodroffe Logistic Ltd being Indian residents to whom payments were made without deducting TDS. According to AO the assessee did not file any certificate to supporting claiming exemption u/sec 194C of the Act, thereby, the AO disallowed ₹ 38,12,856/- against M/s The Shipping Corporation of India and ₹ 25,31,998/- towards M/s Gordon Woodroffe Logistic Ltd U/Sec 40(a)(ia) of the Act . 4. Aggrieved by the assessment order framed by the AO, the assessee preferred an appeal before the CIT-A confirmed the disallowances of ₹ 38,12,856/- made against M/s The Shipping Corporation of India and ₹ 25,31,998/- made towards M/s Gordon Woodroffe Logistic Ltd U/Sec 40(a)(ia) of the Act against which the assessee before us by raising above mentioned grounds of appeal. 5. At the time of hearing, the Ld.AR prayed before us to direct the AO to verify if the payees have declared the receipt from the Assessee in their return of income and if they have so declared then the addition u/s.40(a)(ia) of the Act should be deleted by the AO. The above submission was made in the context of the amendments to the provisions of Sec.40(a)(ia) of the Act by the Finance Act, 2012 w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the onus is on the revenue to demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liability is not discharged that vicarious recovery liability can be invoked. Learned counsel contends that once all the details of the persons to whom payments have been made, it is for the Assessing Officer, who has all the powers to requisition the information from such payers and from the income tax authorities, to ascertain whether or not taxes have been paid by the persons in receipt of the amounts from which taxes have not been withheld. It is learned counsel's submission that as a result of Hon 'ble Allahabad High Court's judgment in the case of Jagran Prakashan Ltd's case (supra), this paradigm shift in the interpretation of Section 201 (1) has been brought about. 8. The plea is indeed well taken. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to make good the shortfall in collection of taxes may thus end up being invoked even when there is no shortfall in fact. On the other hand, once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. It is not the revenue's case before us that, on the facts of this case, such an exercise by the Assessing Officer is not possible. It does put an additional burden on the Assessing Officer before he can invoke Section 201(1) but that's how Hon 'ble High Court has visualized the scheme of Act and that's how, therefore, it meets the end of justice. 10. The matter thus stands restored to the file of the Assessing Officer for fresh adjudication in accordance with the law and in the light of our observations above. While doing so, the Assessing 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. 8. Further submitted that the above decision ITAT Kolkata in the above mentioned case will also apply for the purposes of Section 40( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the disallowance u/s.40(a)(ia) of the Act to the extent sustained by the CIT(A) should be set aside and remanded 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. 10. The learned DR relied on the order of the CIT(A) and submitted that the benefit of the second proviso should not be allowed to the Assessee as the tax deducted at source has not been paid on or before the due date for filing the return of income u/s.139(1) of the Act. 11. Heard rival submissions and perused the relevant material on record. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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