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TMI Blog2016 (12) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... pients have furnished declarations in form 15G/15H before the due date of payment of TDS to the credit of the Government account. Since, the recipient has furnished statutory forms in form 15G/15H, the assessee need not to deduct TDS u/s 194A of the Act, consequently, no disallowance can be made u/s 40(a)(ia) of the Act, accordingly, there is no prejudice is caused to the interest of revenue. Since, the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, the CIT was incorrect in assuming jurisdiction u/s 263 of the Act. Therefore, we set aside the order passed by the CIT u/s 263 of the Act and restore the assessment order passed by the A.O. u/s 143(3) of the Act. - Decided in favour of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of section 263 of the Act. The CIT proposed to revise the order for the reason that on verification of assessment records, it is noticed that the A.O. failed to make additions u/s 40(a)(ia) of the Act, towards interest expenditure even though the assessee failed to deduct TDS u/s 194A of the Act. The CIT further observed that the assessee has paid interest of ₹ 5,91,601/-, however, failed to deduct TDS u/s 194A of the Act. Therefore, opined that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. 4. In response to show cause notice, the assessee filed a written submission and contended that the assessment order passed by the A.O. is neither errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest to the respective party s account. As the assessee has no declaration in its hands as on the date of crediting interest, it should have complied with section 194A of the Act. Since, there is no compliance, the provisions of section 40(a)(ia) of the Act came into operation calling for disallowance of entire interest credited/paid by the assessee. Since, the A.O. failed to examine the issue, the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue and accordingly the assessment order passed by the A.O. is set aside and directed the A.O. to modify the assessment order as per the directions given above with an opportunity of hearing to the assessee. Aggrieved by the CIT order, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of disallowance of interest u/s 40(a)(ia) of the Act, for non deduction of tax at source and accordingly CIT rightly assumed jurisdiction to revise the assessment order and his order should be upheld. 8. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT assumed jurisdiction to revise the assessment order for the reason that the A.O. has failed to make additions towards interest payments under the provisions of section 40(a)(ia) of the Act, for non-deduction of tax at source u/s 194A of the Act. The CIT further observed that though the assessee has furnished declarations in form no.15G/15H to the CIT(TDS), Hyderabad, the forms submitted by the recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts as on 31.3.2009, as per the provisions of section 194A of the Act, the assessee is having time to deposit TDS to the credit of the Government account up to 5th May of succeeding financial year. Since, the assessee has received declarations before the due date of payment of TDS u/s 194A of the Ac, even though TDS is deducted at the time of making credit to the accounts of the payees, the assessee always can reverse TDS before the due date of payment of TDS to the credit of Government account, if the recipients have furnished declarations in form 15G/15H of the Act. In the present case on hand, on perusal of the materials available on record, we find that the recipients have furnished declarations in form 15G/15H before the due date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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