TaxTMI 
TaxTMI 
2016 (9) TMI 389
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....ents made to shipping agents of non-resident ship owners for carriage of goods from the purview of tax deduct ion u/s 194C. (3) For that on the facts and in the circumstances of the case, the ld. CIT(A) was not just i f ied in conf irming the disal lowance of Rs. 38,12,856/ - made by the AO being payments made to M/s. The shipping Corporat ion of India Ltd. by wrongly invoking the provisions of sect ion 40(a)(ia). (4) For that the appel lant assessee was under a bonaf ide bel ief that the impugned payments were not subject to TDS provisions, as such, ld. CIT(A) ought to have deleted addi t ions made u/s 40(a) (ia). (5) For that the ld. CIT(A() ought to have considered the issue of disal lowance u/s 40(a)(ia) on meri t rather than dismissing the assessee's appeal on technical considerat ions relying solely upon Hon'ble Calcut ta High Court 's judgment in the case of CIT -vs.- Md. Jakir Hossain Mondal , ITAT No. 13 of 2013. 2. The only issue in this appeal to be decided is as to whether the CIT-A justified in confirming the disallowances made by the AO U/Sec 40(a)(ia) of the Act in the circumstances of the case. 3. The brief facts of the case are that the Assessee is a....
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....eir respective Assessing Officer. In this regard it was submitted that the assessee would furnish all the relevant details of the payees with their PAN and details of their Assessment Officer. 7. It was pointed out that ITAT, Kolkata in the case of Ramakrishna Vedanta Math v. Income-tax Officer, Ward 59 (1), Kolkata, [2012] 24 taxmann.com 29 (Kol.) has taken a view that once assessee furnishes lawfully maintained information about recipients, Assessing Officer should first ascertain related facts about payment of taxes directly from recipients before invoking section 201 (1). The ITAT in its order held: "5. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable position. 6. Learned counsel's vehement reliance is on Hon'ble Allahabad High Court's judgment in the case of Jagran Prakashan Ltd. v. Dy.CIT (TDS) [2012] 21 taxmann.com 489 wherein Their Lordships have, inter alia, observed as follows: ........... it is clear that deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly. In the present case, the Income ta....
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....liged to maintain under the law, once this information is submitted it is for the Assessing Officer to ascertain whether or not the taxes have been paid by the recipient of income. This approach, in our humble understanding, is in consonance with the law laid down by Hon 'ble Allahabad High Court. 9. It is important to bear in mind that the lapse on account of non deduction of tax at source is to be visited with three different consequences - penal provisions, interest provisions and recovery provisions. The penal provisions in respect of such a lapse are set out in Section 271 C. So far as penal provisions are concerned, the penalty is for lapse on the part of the assessee and it has nothing to do with whether or not the taxes were ultimately recovered through other means. The provisions regarding interest in delay in depositing the taxes are set out in Section 201 (1A). These provisions provide that for any delay in recovery of such taxes is to be compensated by the levy of interest. As far as recovery provisions are concerned, . these provisions are set out in Section 201 (1) which seeks to make good any loss to revenue on account of lapse by the assessee tax deductor. Ho....
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.... u/s. 194C of the act. The AO applied the provisions of section 40(a)(ia) of the Act on the above three payments and made disallowance. Aggrieved, assessee preferred appeal before CIT(A) , who also confirmed the action of AO. Aggrieved, now assessee is in second appeal before us. 4. At the outset, Ld. Counsel for the assessee fairly conceded the grounds but requested only on the issue of applicability of second proviso to section 40(a)(ia) of the Act, which is held to be retrospective by Hon'ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township P. Ltd. (2015) 377 ITR 635 (Del), wherein the AO is directed to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. When this plea of the Ld. Counsel for the assessee was confronted to Ld. Sr. OR, he fairly conceded the position and urged the bench to set aside the matter to the file of the A.O. 5. We have heard rival submissions and gone through facts and circumstances of the case. We are inclined to set aside the issue to the file of the AO and accordingly, we direct the AO to verify whether the recipients have included....