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TMI Blog2023 (8) TMI 1500X X X X Extracts X X X X X X X X Extracts X X X X ..... terest incomes in their respective returns of income for the year under consideration and paid taxes on the same, had however failed to substantiate the same in the manner required under law, therefore, we find no infirmity in the view taken by the lower authorities who had rightly made/sustained the disallowance u/s.40(a)(ia). The assessee company had not only failed to file both before the AO and the CIT(A) the certificates of the accountants in the prescribed form i.e in Form 26A r.w 31ACB, certifying that the respective payees had fulfilled all the conditions mentioned in the 1st proviso to Sub-section (1) to Section 201 of the Act, but the Ld. AR on being queried during the course of hearing of the appeal had candidly admitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order on the following grounds of appeal before us : 1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals), NFAC has erred in confirming disallowance of Rs.15,89,324/- u/s.40(a)(ia) of the Income-tax Act, 1961. 2. In the facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeals) has erred in not giving proper opportunity while deciding the appeal especially by relying on the notices issued during pandemic Covid-19. 3. The impugned order is bad in law and on facts. 4. The appellant reserves the right to add, alter or omit all or any of the grounds of appeal in the interest of justice. 2. Controversy involved in the present appeal lies in a narrow compass, i.e. as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, the appeal is disposed after considering the submission of the appellant, facts on record and position of law. During the course of assessment proceedings, the assessing officer has observed that assessee company has paid interest amounting to Rs.52,97,748.56/- to Reliance Capital and DHFL. The assessing officer has issued show cause notice in respect of the non-deduction of TDS to the assessee. However, the assessee failed to submit any supporting document during the course of assessment proceedings. During the appellate proceedings, I have observed that the assessee has not filed any record or evidence. It is the settled proposition of laws that onus is on the assessee to prove the deduction of TDS. The assessee has not prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid amount of interest paid to the NBFC s, thus triggered the provisions of Section 40(a)(ia) of the Act and worked out a disallowance of Rs.15.89 lacs (supra). 8. Although we principally concur with the Ld. AR that in case the interest paid by the assessee company to the aforementioned NBFCs was included by them in their respective returns of income for the year under consideration and subjected to tax in their hands, then the assessee company could not be deemed as an assessee-in-default, but at the same time in absence of any supporting material cannot summarily accept the said unsubstantiated claim on the very face of it. At this stage, we may herein observe that though the 2nd proviso to Section 40(a)(ia) of the Act r.w the 1st Proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: On a conjoint perusal of the aforesaid statutory provisions, it transpires that the concession carved out in the 2nd proviso to Section 40(a)(ia) of the Act, i.e for not treating the assessee as being in default pre-supposes a cumulative satisfaction of the aforementioned set of three conditions laid down in the 1st proviso to Section 201 of the Act, viz. (i) that the payee has furnished his return of income u/s.139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the said certificates had till date have not been obtained by the assessee from the said payees. In so far the reliance placed by the ld. AR on the order passed by the ITAT in the case of RKP Company Vs. ITO, Ward-1, Korba, ITA No. 106/RPR/2016, dated 24.06.2016, the same being distinguishable on facts would not assist the case of the assessee company. We, say so, for the reason that a perusal of the record in the present case before us, reveals that both the lower authorities had categorically observed that the assessee had failed to produce the certificates/evidence in support of its claim that the respective payees companies i.e NBFC s had included the amount of interests in their respective returns of income and paid tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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