TaxTMI 
TaxTMI 
2020 (8) TMI 596
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....to appreciate that the provision 40(a)(ia) of the Act is inserted in the year 2014 thus the said provision is not applicable to the appellant case, thus disallowed the claim of the appellant by the assessing authority is against the law and liable to be set aside. 3. On fact of the circumstances of the case, the learned Commissioner of Income Tax (Appeals) ought to have appreciated that the appellant made payment to artist and claimed benefit under the Act are correct, thus the disallowance made by the appellant is against the principle of natural justice and made additions are liable to be set aside. 4.On fact of the circumstances of the case, the learned Commissioner of Income Tax (Appeals) ought to have appreciated that the judgment relied by the appellant which are squarely applicable in the appellant case and judgment relied by the CIT(A) and fact of the case is difference from of appellant fact of the case, thus the learned CIT(A) ought to have been allowed the appeal in the interest of justice. 5. Without considering the fact and merit of the case the learned CIT(A) confirming the disallowances made by the assessing authority and confirming interes....
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....ecide the issue in the light of the decision in Anand Markala's case. He further pointed out that in the same para of his order, it is noted by learned CIT(A) that the assessee has not produced the relevant evidences in support of the assessee's claim mainly the certificate of the Chartered Accountant as required. He submitted that earlier the assessee was not properly advised by the counsel and the assessee has come to the present counsel very recently and thereafter, the assessee was advised by the present counsel to bring on record various documents / evidences mainly the CA's certificate but because of the ongoing Covid pandemic since March 2020, no evidence could be brought on record by the assessee. He submitted that under these facts and in the interest of justice, the assessee should be provided with one more opportunity to bring these evidences on record and the matter may be restored back to the file of the AO for a fresh decision. As against this, learned DR of the Revenue supported the order of CIT(A). He also submitted that the issue was already restored back by the Tribunal earlier and therefore no further opportunity should be provided to the assessee. 3. We have ....
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....ions filed by the appellant and also perused the assessment order. The appellant has raised a solitary ground on disallowance of Rs. 51.90,549/- made by the Assessing Officer invoking the provisions of Sec.40(a)(ia) of the Act, 1961 on the ground of failure to deduct tax at source. During the appellate proceedings the appellant submitted that Sec.191 of the Act provides, for direct payment of income tax by the assessee ire cases where provision for deduction of tax at source is not made under the Chapter XVII-B. The liability of deducting at source is in the nature of vicarious liability which pre-supposes existence of primary liability. The said liability is a vicarious liability and the principal liability is of the person who is taxable. Thus, both the conditions i e.,(i) in the case of income in respect of which provision is not made under Chapter XVII for deducting income tax at the time of payment and (ii) in case where income tax has not been deducted in accordance with the provisions of Chapter XVII, the deductor is deemed to be assessee in default within the meaning of Sub-Sec (1) of Sec.201 in respect of such tax. The explanation to Sec.191 thus has to be read into Sec.20....
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....e provisions of Chapter XV1i-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub section (11 of section 201, then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident. payee referred to in the said proviso Proviso to Sec.201(1): Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a -:.certificate to this effect from an accountant in such form as may be prescribed: Provided further that no penalty shall be charged un....
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....ovisions of Chapter XVI1-B of the Income Tax Act 1961 or not is to be decided before invoking provisions of Sec.40(a)(ia) which is the cause of action. In the present case it is an undisputed fact that the appellant was having obligation to withhold tax while making payment of certain payments as reported in Tax Audit Report vide clause No.21B(iiA). Now the proviso to the Sec.4e(a)(ia) inserted by Finance Act, 2012, w.e.f.01-04-2013 applicable for A.Y.2013-14 which is subservient to the main provision which says that the assessee is not deemed to be an assessee in default uls.201(1) of the Act on fulfilling certain conditions, it shall he deemed that the assessee has deducted and paid the tax on such sum, would be the subsequent event which has to be read separately and in consonance with the main provision. Now the proviso under sub-section (1) to Sec.201 clearly says that the assessee shall not be deemed to be an assessee in default in respect of such tax if such resident (i) has furnished his return of income under section 139; 00 has taken into account such sure for computing income in such return of income; and (iii) has paid the tax due on the income declared by him ....
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....ceived from the appellant and taxes paid thereon and most importantly could not furnish the certificate to this effect from an accountant. During the appellate proceedings on confrontation the AR of the appellant expressed his inability to furnish those certificates from the accountant. Therefore, even on account of factual matrix of the case 1 hold that the Assessing Officer has rightly invoked the provisions of Sec.40(a)(ia) of the Act and disallowed the same based on the tax audit report. In view of the same the appeal on this ground is hereby dismissed both on legal ground as well as factual ground." 4. From the above paras reproduced from the order of CIT(A), it is seen that this is the finding of learned CIT(A) in para 5.4 of his order that although the assessee has submitted confirmation letter from the deductees but mere submission of confirmation letter is not enough and the assessee is required to establish that the deductees have filed the return of income showing the payments received from the assessee and taxes are paid thereon and most importantly, the assessee could not furnish the certificate to this effect from the Accountant. Hence, it is seen that the main rea....