2023 (4) TMI 632 - AT - Income Tax

Appeal allowed for statistical purposes, interest disallowance issue remanded to Assessing Officer.

The appeal was allowed for statistical purposes, with the issue of disallowance of interest amount u/s 40(a)(ia) being remanded to the Assessing Officer ... TDS provision applicability - Addition being 30% of the amount of interest paid to various depositors by invoking the provisions of section 40(a)(ia) - grievance of the assessee is that it has not been allowed sufficient opportunity to substantiate its case before the lower authorities - HELD THAT:- Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one last opportunity to the assessee to prove that the TDS has been deducted from the interest amount or that the TDS provisions are not applicable. AO shall decide the issue as per fact and law after affording due opportunity of being heard to the assessee. Grounds raised by the assessee are accordingly allowed for statistical purposes. Issues Involved:1. Disallowance of interest amount u/s 40(a)(ia) of the I.T. Act.2. Proper opportunity to substantiate case before lower authorities.Summary of Judgment:Issue 1: Disallowance of interest amount u/s 40(a)(ia) of the I.T. ActThe appeal was against an order relating to A.Y. 2016-17 where the Assessing Officer disallowed Rs.84,79,336/- as 30% of interest paid to depositors due to failure to prove TDS deduction. The CIT (A) confirmed the addition, stating the appellant did not provide necessary details despite multiple opportunities. The Tribunal found that the appellant was not allowed sufficient opportunity to substantiate its case. Consequently, the issue was restored to the Assessing Officer for granting one last opportunity to prove TDS deduction or inapplicability, with directions to decide after due hearing. The appellant was directed to appear and submit required details, failing which appropriate action could be taken.Issue 2: Proper opportunity to substantiate case before lower authoritiesThe Tribunal noted the appellant's grievance of lack of opportunity to present its case. In the interest of justice, the issue was remanded to the Assessing Officer for a final chance to prove TDS deduction or its inapplicability. The Assessing Officer was instructed to decide based on facts and law after giving the appellant a fair hearing. The appellant was directed to provide necessary details and appear before the Assessing Officer, with the liberty for the Assessing Officer to take lawful action in case of non-compliance. The grounds raised by the appellant were allowed for statistical purposes.In conclusion, the appeal filed by the assessee was allowed for statistical purposes, with the issue of disallowance of interest amount u/s 40(a)(ia) being remanded to the Assessing Officer for a final opportunity to prove TDS deduction or inapplicability, ensuring a fair hearing and compliance with legal requirements.