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TMI Blog2023 (8) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income Tax, (Appeals) ( CIT(A) ) Delhi 41 pertaining to Assessment Year ( AY ) 2013-14. 2. The Revenue has raised the following grounds:- 1. Whether on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate the fact and quashed the order and finding on the applicability of TDS on provisions in the balance sheet is not required to be made? Whereas the auditor of the assessee has reported TDS default in the statutory Audit Report i.e.in 3CD. 2. Whether on the facts and circumstances of the case and in law, the CIT(A) failed to appreciate the fact and quashed the order of AO, which is based on the facts mentioned in Audit report i.e. 3CD Report and is covered by the provisions of section 154 of Income Tax Act? 3. That the order of the CIT(A) being erroneous in law and on facts needs to be vacated and the order of the ACIT is to be restored. 4. That the appellant craves leave to add or amend any one or more of the ground of the appeal as stated above as and when need for doing so any arise. 3. In brief the Ld. Assessing Officer ( AO ) found that for Financial Year ( FY ) 2012-13 the assessee deductor was required to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the AO on 27.03.2015 raising demand of Rs. 4,39,84 927/- u/s 194H of the Act on account of discount passed on to the assessee's distributors towards sale of services through RCV etc. In Appeal proceedings against the above order the CIT (A) confirmed the order of the AO vide order dated 18.12.2017. The appellant during the course of hearings has submitted that its appeal against the order of CIT (A) dated 18.12.2017 is pending before the ITAT. However, from the original demand of Rs. 4,39,84,927/- raised by the AO, the assessee has paid Rs. 3,32,34,607/- under protest. 5.3 As per order passed u/s 154 r.w section 201(1) dated 19/02/2018 which is the subject matter of appeal, the AO has determined the following liability in the order. S.No Particular Amount in Rs. 1. Total Liability as per order u/s 201(1)/201(1A) dated 27.03.2015 4,39,84,927/- 2. Interest u/s 220 (2) of the Income Tax Act, 1961@ 1% per month till Feb. 2018 1,53,94,724/- 3. Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished his return of income under section 139: (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed: Provided further that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctification u/s 154: 1. Principal Commissioner of Income Tax v/s Aura Securities Pvt. Ltd. [2018] 96 taxmann.com (Gujarat) 2. Principal Commissioner of Income Tax-14, v/s Vinod Kumar Surana [2017] 87 taxmann.com 347-(Calcutta) 3. Assistant commissioner of Income Tax, Circle- 2(2)(1), Mumbai v/s Mahindra Mahindra Ltd. [2017] 86 taxmann.com 162 (Mumbai-Trib.) 5.8 I find the contention of the appellant supported by judicial precedents convincing that Section 154 of the Act clearly provides to rectify only those mistakes which are apparent from the record and not on debatable issues. 6.1 Regarding the issue of year end provisions I find that the same has been the subject matter of appeal in AY'S 2014-15, 2015-16 2016-17. As per facts of the case, on the basis of enquiry and reference received from the A.O, the concerned Addl. CIT levied penalty u/s 271C vide order dated 30.10.2017 for all three assessment years i.e. 2014-15, 2015-16 and 2016-17. The appeal of the assessee for those years has been allowed by a combined order for all the three years dated 04.09.2018 on the ground that the expenses were only in the nature of year end provisions and as no i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and raised by the AO as per order dated 19.2.2018 is beyond the scope of section 154 proceedings. Accordingly, the said order is quashed and finding on the applicability of TDS on provisions in the balance sheet is not required to be made. 7.1 Further regarding the addition of interest u/s 201(1)/201(1A) on account of year end provisions from the date of deduction till the date of the assessment order under appeal, the same is merely consequential in nature to the issue of year end provisions. Therefore, on the facts and circumstances of the case and following the judicial precedents relied on by the appellant the order passed by Ld. AO u/s 154 of the Act is held to be unjustified and is quashed. 5. Dissatisfied, the Revenue is in appeal before the Tribunal and all the grounds relate thereto. 6. The Ld. CIT-DR relied on AO s order. He submitted that on facts the Ld. AO was justified in resorting to provisions of section 154 of the Act. There is mistake apparent from the record. He further contended that the Ld. CIT(A) has not dealt with the issue on merits. 7. The Ld. AR drew our attention to the observations of the Ld. CIT(A) on the issue of withholding tax on year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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