TaxTMI 
TaxTMI 
2013 (1) TMI 810
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....at Rs. 38,960/-. Assessment u/s 143(3) was completed on 19-11-2008 assessing the total income at Rs. 97,670/- after disallowing a sum of Rs. 40,000/- out of labour expenses and 10% out of telephone expenses, petrol expenses and travelling expenses. 3. In exercise of powers conferred by section 263 of the Income-tax Act, the ld. Commissioner of Income-tax called for the records and examined them. He found that the Assessing Officer has completed the assessment without examining the issue in the light of the provisions of section 40(a)(ia). He noticed that a sum of Rs. 70,47,160/- and Rs. 20,82,537/- was paid to M/s. Rajdhani Construction and M/s. Parth Construction without deduction of tax at source. According to him, the AO was required to consider the applicability of section 40 (a)(ia) of the Income-tax Act in respect of the aforesaid two amounts but the AO did not do so while competing the assessment. He therefore set aside the assessment order passed by the AO u/s 143(3) on 19-11-2008, with the following observations: "5. Assessing Officer is directed to disallow the sub-contract payment to M/s. Rajdhani Construction of Rs. 70,47,160/- u/s.40(a)(ia) of the I.T. Act. Similarly....
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....fore no appeal can be filed before CIT (A) u/s.246A of the I.T. Act in respect of directions of CIT-III, Rajkot u/s.263 of the I.T. Act in respect of disallowance of sub contract payment to M/s. Rajdhani Construction of Rs. 7047160/-. The only possibility of filing appeal against the order of the Assessing Officer could arise in respect of the other direction of CIT-III, Rajkot where he directed the Assessing Officer to verify the TDS payment being made in the Govt. Account on or before the due date of filing of return. As far as other directions of CIT-III, Rajkot in respect of sub-contract payment of Rs. 2082537/ to M/s. Parth Construction is concerned, the Assessing Officer verified that the TDS of such payment made in March 2006 was deposited before the due date for filing the return of income in Gujarat Region and therefore did not make any disallowance and therefore the question of filing any appeal before CIT (A) by the appellant does not arise. In nutshell, I find that appellant had accepted the directions of CIT-III, Rajkot in respect of disallowance of sub contract payment to M/s. Rajdhani Construction of Rs. 7047160/- when the order u/s.263 was passed by CIT-III, Rajkot ....
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....ed by I.T.O. for Rs. 71,44,830/- 24-11-2011 Appeal to C.I.T. (Appeals)-IV, Rajkot filed against order dated 28-9-2011 against disallowance of Rs. 70,47,160/- made by the I.T.O. u/s.40(a)(ia). 26-06-2012 Order passed by C.I.T. (Appeals-IV, Rajkot holding the appeal as invalid and hence dismissing it; order received on 11-7-2012 18-09-2012 Direct appeal filed before the Hon'ble Tribunal against order dated 18-3-2011 passed u/s.263 of the Act. 18-09-2012 Parallel appeal filed before Hon'ble Tribunal against order of C.I.T. (Appeals) dismissing the appeal as invalid It is most respectfully submitted in this regard as under: (i) After the passing of order u/s.263 whereby the A.O. was directed to make proper disallowance u/s.40(a)(ia) of the Act after giving due opportunity of being heard to the assessee before framing the fresh assessment order, the I.T.O., Junagadh initiated proceedings for fresh assessments. Letter of inquiry dated 26-8-2011 was also issued by the I.T.O. During the said proceedings, written submissions were filed by the appellant and personal attendance was also made. Thereafter, the I.T.O. passed a speaking order which has been passed u/s.14....
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....pport that the assessee had formed the aforesaid belief bona-fide, it is not possible to condone such inordinate delay. Besides, the ld. Commissioner has merely set aside the order of assessment originally passed by the AO with the direction to pass a fresh assessment order after hearing the assessee. In view of the foregoing, the appeal filed by the assessee is dismissed. 11. In ITA No.523/Rjt/2011, the assessee has taken the following grounds of appeal: 1. The Learned C.I.T.(Appeals)-IV, Rajkot erred in holding that the appeal filed before him against order u/s.143(3) r.w.s..263 of the Act was invalid. 2. The Learned C.I.T.(Appeals)-IV, Rajkot erred in dismissing the appeal filed by the appellant and hence erred in upholding the order u/s.143(3) making addition of Rs. 70,47,160/- u/s.40(a)(ia) of the Act. 12. We have heard both the parties. The appeal filed by the assessee is barred by limitation of 09 days. The period of delay is nominal. The ld. Departmental Representative has also not opposed the prayer of the assessee for condonation of delay. Following the principles laid down in Vedabai alias Vaijayanatabai Baburao Patil (supra), delay of 09 days in filing the appeal is....
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....her case, on or before the last day of the previous year:" Prior to its substitution, the quoted words were substituted by the Finance Act, 2008, w.r.e.f. 1-4-2005. **Substituted by the Finance Act, 2010, w.e.f. 1-4-2010. Prior to its substitution, proviso as substituted by the Finance Act, 2008, w.r.e.f. 1-4-2005, read as under: "Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted (A)during the last month of the previous year but paid after the said due date; or (B)during any other month of the previous year but paid after the end of the said previous year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid." 16. The matter under appeal relates to assessment year 2006-07. The provisions of section 40(a)(ia) as they existed at that time stipulated not only deduction of tax at source but also its deposit with the Government within the same year. The rigours of section 40(a)(ia) were relaxed by the Finance Act, 2010 w.e.f. 1.4.2010 to enable an assessee to pay the tax deducted by him at source under Chapter XVII-B of the Income-tax Act on or before ....
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....Income-tax Act. 18. Bare perusal of the scheme of Chapter XVII-B shows that it mandates the person responsible for paying any sum out of which tax is required to be deducted at source to deduct the requisite amount of tax at source out of the amounts paid/credited by him. Deduction of tax is made out of the amounts paid/credited by the person responsible for paying/crediting the same. They further require the person responsible for deduction of tax at source to furnish a certificate of deduction of tax at source in the prescribed format detailing the date of payment/credit, amount paid/credited, amount of tax deducted at source out of such payments, etc. Section 194 requires deduction of tax at source out of payments made to the deductee. Section 199 provides that any deduction made in accordance with the provisions of Chapter XVII-B of the I-T Act shall be treated as payment of tax on behalf of the person from whose income the deduction is made. It thus follows that tax must be deducted out of the amount paid/credited by the assessee. Though it is stated by the AO that tax has been deducted at source in the present case, it does not come out from his order whether such tax was de....