Anup Nayak Vs CIT (Appeals) (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) Kolkata has remanded the case of Anup Nayak vs. CIT (Appeals) for reassessment after a ₹12 lakh disallowance under Section 40(a)(ia) of the Income Tax Act. The dispute arose when the Assessing Officer (AO) disallowed interest payments made by the assessee to financial institutions, citing non-deduction of TDS. The assessee argued that the payees had likely included the interest in their taxable income and requested verification via Section 133(6) notices. However, as no response was received, the AO added the amount to the assessee’s total income. The CIT(A) later dismissed the appeal due to non-prosecution.
The ITAT observed that the payees, including established financial institutions, were regular taxpayers, and the possibility that they had declared the interest income could not be ruled out. The Tribunal held that the onus was on the assessee to provide evidence but also acknowledged that he had made efforts to obtain confirmation. In the interest of justice, the ITAT set aside the assessment order and directed the AO to verify the payees’ tax compliance before finalizing the reassessment. The case has been remanded for fresh adjudication, allowing the assessee to present relevant evidence.
