Revenue's Appeal Dismissed: Disallowance under Income Tax Act Upheld

The Revenue's appeal against the deletion of disallowance under section 40(a)(ia) of the Income Tax Act, 1961 was dismissed by the Tribunal. The Tribunal upheld the decision of the ld. CIT(A) who had deleted the disallowance after considering that the payee had paid taxes on the income and the appellant had submitted the required certificate. Citing relevant judgments, including that of the Hon'ble Delhi High Court, the Tribunal found no reason to interfere with the ld. CIT(A)'s order, leading to the dismissal of the Revenue's appeal.

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Issues: Disallowance under section 40(a)(ia) of the Income Tax Act, 1961

Issue Analysis:
1. The appeal was filed by the Revenue against the order passed by the ld. Commissioner of Income Tax (Appeals) for the Asst. Year 2013-14 under section 250(6) of the Income Tax Act, 1961.
2. The Tribunal had earlier dismissed the Revenue's appeal due to low tax effect, but the Revenue filed a Misc. Application stating that the case fell under exceptions in a CBDT Circular, leading to the recall of the order.
3. Despite notice, no one appeared on behalf of the assessee, prompting the Tribunal to proceed ex parte.
4. The sole ground raised by the Revenue was the deletion of disallowance of Rs.1,97,194/- under section 40(a)(ia) of the Act by the ld. CIT(A).
5. The ld. CIT(A) deleted the disallowance after considering the submission of the appellant, noting that the payee had paid taxes on the income, and the appellant had submitted the required certificate.
6. The ld. CIT(A) relied on various judgments, including the Hon'ble Delhi High Court's decision, to support the deletion of the disallowance.
7. The Tribunal found no reason to interfere with the ld. CIT(A)'s order, as the payer had paid taxes on the income in question, leading to the dismissal of the Revenue's appeal.
8. Consequently, the appeal of the Revenue was dismissed, and the order was pronounced in the Court on 23rd December 2022 at Ahmedabad.

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