TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 292
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....Grounds of appeal, but the solitary dispute relates to disallowance of Rs. 18,27,675/- made out of labour charges paid by invoking provisions of Sec. 40(a)(ia) of the Act. 3. At the outset, the learned representative for the assessee submitted that there was a delay in filing of appeal before the Tribunal and referred to the appellant's plea for condonation of delay. In this context, he has referred to an Affidavit of the Managing Director of the Company enumerating the reasons for the delay, which reads as under:- "2. I am looking after day to day management of the company and I receive the daily correspondence etc. from the outsiders. 3. Assessment Order for A.Y. 2009-10 was received by us and the company had filed an appeal before Co....
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....our by the Tribunal in Assessment Year 2008-09 in ITA No. 6673/Mum/2011 vide order dated 22.8.2012 and, therefore, there would not have been any justifiable reason for the assessee to deliberately delay filing of appeal. 5. Considering the reasons advanced, and the fact that the bona fide of the reasons have not been assailed by the Revenue, we deem it fit and proper to condone the delay in filing of appeal following the ratio of the judgment of Hon'ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katiji & Ors., 167 ITR 471 (SC). 6. Coming to the merits of the dispute, the relevant facts can be understood as follows. The assessee before us is engaged in the business of manufacture of chemicals, solvent purification....
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....educt tax at source, but not in cases where there is a mere shortfall in the deduction of tax at source. In this context, he has referred to the decision of Tribunal dated 22.8.2012 (supra), wherein under identical circumstances, the disallowance out of payments made to M/s. Aeromatic & Industrial Chemical Pvt. Ltd. has been set-aside with the following discussion :- "7. We have considered the issue. There is merit in assessee's contention that the amounts paid are not in the nature of technical fees but only reimbursement of expenditure. Without going to the merits of the aspect, whether it is in the nature of technical services or contract payment, assessee has already deducted the tax on this amount under section 194C on which there is ....
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...., we are of the opinion that there is no merit in Revenue's contention that the amount paid to the employees should be disallowed as provisions of section 194J would attract. On the facts of the case, there is no merit in Revenue's appeal. Accordingly the order of the CIT(A) is confirmed". 8. Similar view was also expressed in the case of DCIT vs. DCIT vs. M/s S.K. Tekriwal (ITA No.1135/Kol/2010 dated 21.10.11) vide Para 6 as under: "6. In the present case before us the assessee has deducted tax u/s. 194C(2) of the Act being payments made to sub-contractors and it is not a case of non-deduction of tax or no deduction of tax as is the import of section 40a(ia) of the Act. But the revenue's contention is that the payments are in the natu....
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....e 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, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into 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 a default as the deduction is not as required by or under the Act, but the facts is that this expression, 'on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid ....