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TaxTMI 
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TaxTMI 
2016 (5) TMI 162
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....dupi. However, as per the Ld. AR notice for hearing u/s.143(2) of the Income-tax Act, 1961 ('the Act' in short), was issued by DCIT, Circle -I, Udupi. As per the Ld. AR DCIT, Circle -I, had thereafter completed assessment inter alia making various additions. According to the Ld. AR, it was true that assessee had not objected to the assumption of jurisdiction by DCIT, Circle -I, Udupi. However, according to him, lack of jurisdiction by DCIT, Circle -I, Udupi was pointed out by the assessee in its appeal before the CIT (A). As per the Ld. AR, by virtue of Instruction No.1 of 2011, dt.31.01.2011 of CBDT, DCIT had no power to assess the assessee who fell within the exclusive jurisdiction of ITO, Ward -1, Udupi. Further as per the Ld. DR, CIT (A) had erroneously rejected this contention, taking a view that assessee ought have raised it before the AO within thirty days of notice u/s.143(2) of the Act. Again, as per the Ld. AR, CIT (A) took an erroneous view that it could not raise such objection before the latter. Submission of the Ld. AR was that CIT (A) fell in error in relying on Section 124(3) of the Act which, as per the Ld. AR, applied only to territorial jurisdiction and not with ....
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....a was less than Rs. 15 lakhs. Instruction (supra), as per the Ld. DR was only for distribution of work and a matter of convenience, but did not divest the authority vested in DCIT. 06. We have perused the orders and heard the rival contentions. Case of the assessee is that by virtue of CBDT Instruction No.1/2011, dt.31.01.2011, DCIT was excluded from making an assessment since its income fell below Rs. 15 lakhs. There is no doubt that assessee's declared income was below Rs. 15 lakhs. Relevant Instruction relied on by the assessee is reproduced hereunder for brevity : 07. It is not disputed that DCIT, Circle -I, Udupi Range, who had finally done assessment on the assessee was having territorial jurisdiction over Udupi and assessee was a resident of Udupi. So the question before us, is whether the above Instruction can be deemed to preclude the DCIT from making an assessment of an assessee whose declared income was less than Rs. 15 lakhs. Above Instruction No.1/2011 has been issued u/s.119 of the Act. Section 119 of the Act, is reproduced here under : (1) The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may de....
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....the provisions of Chapter IV or Chapter VI-A, where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely:-- (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee ; and (ii) the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed: 08. There are three types of edicts mentioned in the above section, namely Orders, Instructions or Directions. The grammatical conjunction used between the terms is 'or'. Said instructions has been issued by the Board when references were received from large number of tax payers especially from mofussil areas for assigning cases to Assessing Officers located at areas far from them causing hardship to them. There also exists a subsequent Instruction No.6/2011 (F. No.187/12/2010 - ITA -I), dt.08.04.2011, which reconsidered the Instruction No.1/2011, dt.31.01.2011. In the latter Instruction, it was stated that if the application of limits mentioned in the former one led to substantially uneven ....
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....cer has jurisdiction to assess any person, the question shall be determined by the Director General or the Chief Commissioner or the Commissioner; or where the question is one relating to areas within the jurisdiction of different Directors General or Chief Commissioners or Commissioners, by the Directors General or Chief Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the official Gazette, specify. (3) No person shall be entitled to call in question the jurisdiction of an Assessing officer-- (a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1)....
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....that not only DCIT had the necessary jurisdiction to do an assessment on the assessee, but assessee by virtue of not objecting to such jurisdiction before the DCIT during the course of assessment cannot now turn back and say that the said officer was not having the necessary jurisdiction to assess it. As a result of the above discussion, we dismiss grounds 2 and 3 of the assessee. 11. Vide its ground 4, grievance of the assessee is that CIT(A) confirmed an addition of Rs. 17,83,100/-, made by the AO u/s.68 of the Act. 12. Facts apropos are that assessee had during the relevant previous year in its books of account showed loans totalling to Rs. 17,83,100/- from one Shri. Shravan Naik, who was the brother of one of the partners of the assessee firm, namely, Shri. Sweekar Nayak. Entries in respect of these loans read as under : 30.04.2008 By cash 50,000 11.07.2008 -do- 33,100 25.07.2008 -do- 2,00,000 26.07.2008 Credited to Bank A/c HDFC CA 77 3,00,000 27.09.2008 Credited to Corporation Bank CC A/c 080001 12,00,000 Total Rs.17,83,100 Assessee was required to establish the genuineness of the credits. Explanation of the assessee was that Shri. Shravan ....
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.... affidavits were disbelieved. As per the Ld. AR, bank account statement of Shri. Praveen Bhaskar Shetty was available before the AO. Sum of Rs. 2 lakhs dt.25.07.2008 was reflected in the said account placed at paper book page.34, as cash withdrawal, which in turn was used by him for giving money to the assessee. Similarly, according to him, on 26.07.2008, there was an RTGS transfer of Rs. 3 lakhs from the account of Shri. Praveen Bhaskar Shetty to the assessee. Last sum of Rs. 12 lakhs was also reflected in the bank statement of Shri. Praveen Bhaskar Shetty on 27.09.2008. As per the Ld. AR, the sum received by Shri. Praveen Bhaskar Shetty, from Shri. Shravan Nayak, was Rs. 12,00,019/-. Ld. AR pointed out that credit of Rs. 12,00,000/- appeared in the account of the assessee on 27.09.2008 itself when the cheque was presented. This was since assessee resorted to discounting of the said cheque. Without verification of any of these assertions of the assessee, as per the ld. AR, addition was made. Reliance was placed by the Ld. AR on the decision of Hon'ble jurisdictional High Court in the case of Tam Tam Pedda Guruva Reddy v. CIT (291 ITR 44) and of Gauhati High Court in the case....
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....he date of credit and clearing of the cheque, as mentioned by the Ld. AR this could be due to the cheque discounting done by the assessee immediately on receipt of the cheque. There is indeed a cheque discounting charge of Rs. 4,882/- on the very same day appearing in the bank account of the assessee. Affidavit of Shri. Praveen Bhaskar Shetty, say that each one of these amounts were given by him on behalf of Shri. Shravan Nayak. Assessee has also filed affidavit of Shri. Shravan Nayak which say that he had requested Shri. Praveen Bhaskar Shetty to give the above money to the assessee on his behalf. But as mentioned by the Ld. DR why the assessee opted for a circuitous route for getting money from Shri. Shravan Nayak who was brother of one of the partners of the assessee, is something which require deep analysis. As mentioned by the Ld. AR it could be for a reason that Shri. Shravan Nayak was not readily having money with him for giving the loans. In any case what we find is that the AO had not examined Shri. Shravan Nayak nor Shri. Praveen Bhaskar Shetty. Though we cannot say that assessee had discharged its full onus with regard to the credits, it is a matter of fact that it had f....
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.... TDS and a sum of Rs. 2,44,075/- was disallowed for short deduction of tax at source, relying on Section 40(a)(ia) of the Act. 20. Assessee's appeal before the CIT (A) did not meet with any success. 21. Now before us, Ld. AR submitted that Rs. 2,60,000/- was paid during the relevant previous year by virtue of Special Bench of the Tribunal in the case of Merilyn Shipping and Transports v. Addl. CIT [(2012) 16 ITR (Trib) 1], disallowance could not be made of paid amounts. Vis-a-vis the balance according to Ld. AR, there was a deduction of tax by the assessee albeit at a lower rate. Relying on the judgment of Hon'ble Kolkata High Court in the case of CIT v. S. K. Tekriwal (361 ITR 432). Ld. AR submitted that Section 40(a)(ia) would not be attracted for short deduction of tax. 22. Per contra, Ld. DR supported the orders of authorities below. 23. We have perused the orders and heard the rival contentions. In so far as Rs. 2,60,000/- is concerned, it is not disputed that the amounts were paid during the relevant previous year, but without effecting any deduction of tax at source. No doubt the Special Bench in the case of Merilyn Shipping & Transports (supra), had held that disallowan....
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....but tax is not deducted as required under section 40(a)(ia) of the Act. We are of the view that the conditions laid down under section 40(a)(ia) of the Act for making addition is that tax is deductible at source and such tax has not been deducted. If both the conditions are satisfied then such payment can be disallowed under section 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bona fide wrong impression, under wrong provisions of TDS, the provisions of section 40(a)(ia) of the Act cannot be invoked. Here, in the present case before us, the assessee has deducted tax under section 194C(2) of the Act and not under section 194-I of the Act and there is no allegation that this TDS is not deposited with the Government account. We are of the view that the provisions of section 40(a)(ia) of the Act has two limbs one is where, inter alia, the assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into the Government account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is....