2025 (7) TMI 768

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....ate Tribunal, Dehradun in ITA No.873/DEL/2017 for Assessment Year 2012-2013. 2. Facts of the case, in brief, are that Samsung Heavy Industries Company Limited (respondent herein) filed its return of income under Section 139(1) of the Income Tax Act, 1961 on 29.09.2012, declaring an income of Rs.. 51,79,380/- that the return of income was selected for scrutiny assessment and the notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961 were served upon the respondent; that on 12.05.2015, the Assessing Officer completed the assessment and passed the final assessment order under Section 143(3) of the Income Tax Act at total income of Rs.. 117,11,60,400/- that against the order passed by the Assessing Officer, the assessee (r....

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....the Ld. CIT(A) erred in applying the provisions of Section 40(a)(ia) without appreciating that the same is not applicable in the cases of short deduction of taxes. 1.3. Without prejudice to the above, the CIT(A) failed to understand that provisions of section 40(a)(ia) is applicable only to those expenses which are outstanding at the end of the year." 4. Learned Income Tax Appellate Tribunal vide order dated 22.12.2023 allowed the Appeal filed by the assessee and held as under: - "13. The only issue is to be decided in this appeal of the assessee is whether the provisions of section 40(a)(ia) of the Act could be made applicable for short deduction of tax at source. 14. We have heard the rival submission and perused the material ava....

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....ainst the assessee. As could be seen above, none of the High Court decisions referred are the decisions rendered by the Hon'ble Jurisdictional High Court. The Hon'ble Supreme Court in the case of Vegetable Products Ltd reported in 88 ITR 192 had held that when there are divergent views of various non- Jurisdictional High Courts on an identical issue, the construction that is favourable to the assessee should be considered. Respectfully following the said decision of the Hon'ble Supreme Court, we are inclined to follow the ratio laid down by the Hon'ble Calcutta High Court and decision rendered by the Hon'ble Delhi High Court referred (supra) and hold that section 40(a)(ia) of the Act cannot be made applicable for short deduction of tax ....

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....e, shows that deduction under a wrong provision of law will not save an assessee from Section 40(a)(ia)." 6. Per contra, Mr. Arijit Prasad, learned Senior Counsel assisted by Mr. Pulak Raj Mullick, learned counsel for the respondent (assessee) submitted that the Income Tax Appellate Tribunal has rightly relied on the law laid down by Hon'ble Calcutta High Court in the case of Commissioner of Income Tax Vs. S.K. Tekriwal, reported in [2014] 361 ITR 432 (Calcutta). 7. Learned Senior Counsel for the respondent placed reliance on the judgment rendered by Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs. Vegetable Products Ltd., reported in [1973] 88 ITR 192 (SC), wherein it is held that when there are divergent views of vari....