TaxTMI 
TaxTMI 
2016 (1) TMI 1347
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....case and in law, 1. The learned Income Tax Officer, Ward 2(1), Nashik has erred in making addition/ disallowance of Rs. 2,00,377/- and the learned Commissioner of Income Tax (Appeals)-2, Nashik erred in confirming the same. 2. The learned Income Tax Officer, Ward 2(1), Nashik has erred in disallowing an amount of Rs. 2,00,377/- under section 40(a)(ia) of the Act, being non deduction of TDS on interest paid on borrowing to India Bulls Finance Limited, a NBFC (Non banking finance company), and the learned Commissioner of Income Tax (Appeals)-2, Nashik erred in confirming the same. 3. There is an error in ignoring that the assessee firm cannot be treated as assessee in default for non deduction of tax since the recipient had discharged t....
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....) of the Act made on account of non-deduction of tax at source (TDS) on interest paid on borrowings from India Bulls Finance Ltd., a non-banking finance company (NBFC). 5. The assessee is a partnership firm engaged in the business of manufacturing of G.I. and S. S. Wire Meshes. During the assessment year under consideration, assessee filed its return of income on 25.09.2010 declaring total income of Rs. 7,05,168/-. The return was selected under scrutiny. The Assessing Officer finalized the assessment order under section 143(3) of the Act on 04.03.2013 and inter-alia made disallowance of Rs. 3,07,951/- under section 40(a)(ia) of the Act on account of interest paid to non-banking financial companies/institutions owing to non-deduction of tax....
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....ee in the case of The Beed District Central Co-op. Bank Ltd. vs. ACIT in ITA Nos.1108 & 1109/PN/2011, order dated 31.12.2015. The relevant extract of the operative para on the point is reproduced hereunder :- "51. Now, coming to the second aspect of the issue i.e. new legal plea raised by the assessee in view of second proviso to section 40(a)(ia) of the Act, which was inserted by the Finance Act, 2012. The Tribunal in ACIT Vs. Bhavook Chandraprakash Tripathi (2015) 43 CCH 292 (Pune-Trib) while adjudicating similar issue had observed as under:- "4. Following the aforesaid precedent, we hereby reverse the decision of the CIT(A). However, at the time of hearing, the Ld. Representative for the respondent-assessee made a new legal argument ....
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....order of the Tribunal dated 06,01.2014 (supra). The aforesaid plea of the respondent-assessee has not been seriously opposed by the Ld. Departmental Representative appearing for the Revenue. 5. Following the aforesaid precedent, we therefore deem it fit and proper to restore the matter back to the file of the Assessing Officer who shall consider the plea of the assessee based on the second proviso to section 40(a)(ia) of the Act inserted by the Finance Act w.e.f. 01.04.2013 in the light of the directions of the Tribunal contained in its order dated 06.01.2014 (supra). Needless to say, the Assessing Officer shall allow the assessee a reasonable opportunity of being heard before passing an order afresh on this aspect as per law." 10. The i....