2018 (9) TMI 146

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....f Rs. 5,55,294/- made by the Ld. A.O. by invoking the provisions of section 40(a)(ia) of the I.T. Act, 1961 without appreciating the facts of the case that the payees had included the aggregate amount of interest of Rs. 5,55,294/- in their respective return of income and tax stood already paid by them on their respective income. 2. On the facts stated in the statement of facts, the Ld. CIT(A) was not at all justified in confirming the addition of Rs. 5,55,294/- made by the Ld. A.O. and hence addition so made deserves to be deleted. 3. The Ld. A.O. erred on facts and in law in not providing the appellant the proper adequate or sufficient opportunity to have it say or make necessary compliance of the reasons relied upon by him making ad....

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....that assessee was liable to deduct tax at source which he has not done and, therefore, confirmed the addition of Rs. 5,55,294/-. 5. At the time of hearing before us, ld. A.R. of the assessee vehemently argued that disallowance made under section 40(a)(ia) of the Act in the case of the assessee is not applicable since they are covered by second proviso to section 40(a)(ia) read with first proviso to section 201 of the Act. Ld. A.R. of the assessee, in order to demonstrate the applicability of these provisions through documentary evidence filed before the subordinate authorities, stated that copy of relevant ITRs of each of the three payees along with form No.26A i.e. Certificate of Chartered Accountant have already been filed before the Rev....

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....arly spells out that if an assessee has complied with the conditions laid down in first proviso to section 201 of the Act, then in such case it shall be deemed that assessee has deducted and paid tax on such sum on the date of furnishing of return of income by the recipient payee referred to in first proviso to section 201 of the Act. Therefore, section 40(a)(ia) of the Act is a provision where additions can be made by the Revenue on certain conditions as specified therein and second proviso to section 40(a)(ia) of the Act provides benefit to the assessee stating that if he has fulfilled the conditions of the first proviso to section 201 of the Act, then the rigours or chargeability of section 40(a)(ia) of the Act will not be applicable to ....

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....the payee but since interest income received by the payee was more than exemption limit applicable during that relevant year, therefore, 15G was not allowable to the assessee and hence disallowance was made. None of the authorities have analysed applicability of second proviso to section 40(a)(ia) read with first proviso to section 201 of the Act and whether assessee comes within the purview of beneficiary provisions. We have examined that whatever requirements provided in the first proviso to section 201 of the Act, that has been complied with by the assessee and details have been furnished before the Revenue and once this has done automatically assessee is covered within second proviso to section 40(a)(ia) of the Act. Regarding applicabil....