Appellate Tribunal affirms re-assessment validity under I.T. Act, restricts disallowance, and partially allows assessee's appeals.

The Appellate Tribunal upheld the validity of re-assessment proceedings under section 147 of the I.T. Act, dismissing the appeal and confirming the legality of the re-assessment. Regarding the disallowance under section 40(a)(ia) for non-deduction of TDS, the Tribunal directed the AO to verify and restrict disallowances to amounts payable as of 31st March of the relevant assessment years. The appeals by the assessee were partly allowed for statistical purposes in both instances.

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Issues:
1. Validity of re-assessment proceedings under section 147 of the I.T. Act.
2. Disallowance under section 40(a)(ia) for non-deduction of TDS.

Issue 1: Validity of re-assessment proceedings under section 147 of the I.T. Act:
The Appellate Tribunal considered the challenge to re-assessment proceedings initiated under section 147 of the I.T. Act. The assessee contended that the re-opening was based on a change of opinion and therefore the notice issued under section 148 was legally flawed. The assessee argued that there was no suppression of facts, and the re-assessment was unjustified. However, the CIT(A) upheld the re-assessment, citing the decision of the Hon'ble Supreme Court in ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. The Tribunal agreed with the CIT(A) that the notice issued within four years from the end of the relevant assessment year was valid. The Tribunal dismissed the appeal, stating that the re-assessment proceedings were legally justified.

Issue 2: Disallowance under section 40(a)(ia) for non-deduction of TDS:
During re-assessment proceedings, the AO noted discrepancies in TDS payments by the assessee. The AO disallowed an amount under section 40(a)(ia) for non-deduction of TDS. The assessee contested this disallowance, arguing that the provisions were applicable only to amounts payable, not already paid. The CIT(A) upheld the AO's decision. The assessee raised an additional ground challenging the disallowance. The Tribunal admitted the additional ground and directed the AO to verify accounts and disallow only the amount payable as of 31st March of the relevant assessment year. The Tribunal allowed the additional ground for statistical purposes. A similar issue arose for another assessment year, and the Tribunal directed the AO to determine the disallowance based on the same principles. Both appeals by the assessee were partly allowed for statistical purposes.

In conclusion, the Appellate Tribunal upheld the validity of re-assessment proceedings under section 147 of the I.T. Act and directed the AO to verify and restrict disallowances under section 40(a)(ia) to amounts payable as of 31st March of the relevant assessment years.

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