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TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 290
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....f Income is below taxable limit. iii) In holding that the interest consolidatively paid at Rs. 2,85,632/- to payee's is disallowable simply because the appellant failed to deduct tax u/s 194A rws 44AB. iv) In disallowing the - interest paid without taking into consideration the provisions of sec. 201 of the LT. Act, 1961 (consequences for failure to deduct or pay). b) Disallowance of claim towards Exemption of Long Term Capital Gain at Rs. 14,68,380/-. i) In denying that the deposit of the entire sales consideration of the plots at Rs. 15,46,OOO/- held in his "Capital Gain Account No. 3183801960" with the State Bank of India, Sindkhedraja is the Long Term Specified Asset u/s 54EC of the LT. Act, 1961. ii) In not considering that the Bond "STDR" issued by the S.B.1. was based on the "Captial Gain Account No. 3183801960". iii) In not considering the submission made that the Bond "STDR" not being the Specified Asset required u/s 54EC was wrongly issued by the Banker. iv) In not appreciating that the appellant is innocent and ignorant to understand that the Bond "STDR" issued by the Bank is not the Specified Asset u/s 54EC. v) In not exercising the discretionary pow....
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....and in law the order passed by Ld. Pr CIT invoking S. 263 of the Act is bad in law and without jurisdiction. The provisions of S. 263 cannot be invoked to set aside/cancel the illegal assessment. The perusal of demand notice u/s 156 would show that it was dt. 24-12-2013 and the assessment was completed on 26-12-2013. In view of the fact that the demand notice was not in consequence of assessment, the assessment order itself is bad in law and without jurisdiction. The order u/s 263 is not sustainable initiated against illegal order. The assessment order and S. 263 order be quashed." We do not find it proper ground for root of the case in the instant appeal and accordingly dismissed the ground. 4. The relevant facts are that the assessee had filed a return of income on 2-4-2012 showing total income of Rs. 9,79,970/- for the year under consideration. Assessment was completed on 26-12-2013 determining the total income at Rs. 10,39,970/-. The case was selected for scrutiny and notice u/s 143(2) was issued to the assessee. The A.O after duly examination of audited books of accounts and other related documents like vouchers, etc. income of the assessee was computed as under: Total inco....
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....The assessee was required to deduct TDS on the payment of interest as per the provisions of sec. 1 94A of the 1. T. Act, 1961: It is undisputed fact that the assessee did not make any such TDS. So the provisions of sec. 40(a)(ia) are fully applicable on the issue. Income of the payee is taxable or not is not a relevant fact for the payer for making deduction uls. 194A. As the assessee failed to deduct tax, the Assessing Officer was required to make disallowance of interest of Rs. 2,85,632/- u/s. 40(a)(ia). He did not do so. He also did not discuss this issue in the assessment order. The assessment order is, therefore, erroneous & prejudicial to the interest of revenue on this issue. The Assessing Officer is directed to make the disallowance of interest of Rs. 2,85,632/ - u/s. 40(a)(ia) on account of non-deduction of TDS. 5. The claim of deduction u/s. 54EC was made on account of STDR with SBI. The STDR with SBI is not a long term specified assessee within the meaning u/s. 54EC. The Assessing Officer did not notice this fact during the course of assessment proceedings and allowed the claim without application of mind. So the order of the Assessing Officer on this issue- .1]50 is e....
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....ment." 13. After going through the assessment order as well as the order of ld. Pr. CIT, it is revealed that although the interest was paid to Yadav Prabhakar Thakre (HUF) of Rs. 1,42,816/- and Ramprasad Prabhakar Thakre (HUF) of Rs. 1,42,816/-, however, the assessee did not deduct tax while disbursing interest to them. As such, the disallowance is to be made u/s 40(a)(ia) of the Act. As regards the other issue, the assessee sold plots amounting to Rs. 15,46,000/-. The long term capital gain from this transaction was shown of Rs. 14,68,380/-. However, the assessee claimed the same as exempt u/s 54EC of the Act. In support of his claim, the assessee submitted that a copy of the STDR with SBI for an amount of Rs. 15,46,000/- was furnished. However, the same is not a long term specified asset within the meaning of sec. 54EC of the Act. The A.O did not examine these facts in depth and discuss this issue in the assessment order. 14. We find that since the assessee failed to deduct tax, the A.O was required to make disallowance of interest of Rs. 2,85,632/- u/s 40(a)(ia) of the Act on account of non-deduction of TDS. The A.O also did not notice that STDR with SBI is not a long term spe....
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....he above issue which comes for our consideration is, did the Assessing Officer consider and examine the claim of the respondent before allowing a claim for deduction under Section 80 BHC of the Act. The respondent- assessee seeks to draw inference from the statement of case that there was an inquiry made before allowing the claim of deduction under Section 80 HHC of the Act at RS.92.81 lakhs. This inference is not justified. Mere using the word "allowed" does not mean examination and enquiry before allowing deduction under section 90HHC of the Act,. The words "due verification" would include within its ambit not only inadequate inquiry verification but also no enquiry/verification. However, in the case the respondent-assessee was of the view that the claim has been examined by the Assessing Officer before allowing it, then respondent-assessee ought to have the statement of case modified/amended so as to bring the aforesaid facts on record, as held by the Apex Court in the case of Calcutta Agency LId. (supra). This not being done and now to draw far fetched inference cannot be accepted. It is now settled in view of Malabar industries (supra) that non- enquiry before allowing the cla....