The assessee’s prime grievance is the non-examination by the Assessing Officer of the material adduced before Commissioner (Appeals) for the first time. At the same time, there has been, without doubt, a clear violation of rule 46A. The question of consideration of the additional evidence/s by the Commissioner (Appeals) comes only subsequent to first qualifying for admission in terms of rule 46A, which is mandatory in nature.
No doubt the provisions of section 153 requires that assessment order shall not be passed after the expiry of two years from the end of the assessment year in which the income was first assessable. This is applicable to this case. There is no requirement that service must be effected before the expiry date but there must be evidences to show that assessment order was indeed passed before the limitation.
Learned counsel was specifically asked whether he is in a position to produce, or has produced at any stage, evidences for services having been rendered by the persons, who have been paid the commission. While learned Counsel referred to the fact that these incomes are duly disclosed in the hands of the recipient that the same commission was allowed deduction in the other years, he was not in a position to produce any evidence for services rendered, nor such evidence was produced before the authorities below.
Even though the privity of contract may be between the assessee (whose obligation it is for the transportation of goods) and the transporter, rather, irrespective of whether the contract is between the assessee and the transporter or the principal and the transporter – the payment in either case being only in pursuance to a contract; the liability under section 194C being on the person responsible for making the payment
After going through the order of CIT(A), We find that CIT(A) has passed a non-speaking order by following the decision of ITAT in the case of Multiplan India (Pvt.) Ltd. (supra). We are of the view that where appeal has been disposed of even though on merits without a speaking order, the order of CIT(A) cannot be sustained.
No doubt in a normal situation, so far as matters capable of two views being taken will be outside the ambit of section 154. However, right now, we are dealing with interpretation of section 10(10C) and so far as this interpretation is concerned, law laid down by Hon’ble Calcutta High Court is that an interpretation in favour of the assessee is to be adopted.
At the time of hearing the ld. Counsel appearing on behalf of assessee by referring to the paper book at page nos.9 to 31 which contain copies of Kishanlal M.Dayama’s I.T.Return Ack., P&L A/c Capital A/c, Balance Sheet and Banker’s Certificate, Copies of Rajesh Kaishchand Vyasa’s I.T.Return Ack; Brokerage A/c, Interest A/c., Capital A/c, Balance Sheet and PAN Card, Banker’s Certificate
Once it is not in dispute that the facts of the case are materially similar to the facts of ISG Traders Ltd. vs. CIT, WB-II, Kolkata (I.T,A No.264 of 2003-2011- TIOL-621-HC-KOL-IT). And that the said decision applies in this case, the computation of disallowance has to be done on the same basis as was accepted by Their Lordships in ISG Traders Ltd.’s case (supra).
So far as pre June 2008 position is concerned, tax withholding obligations under section 194 C in respect of an individual only in cases where the payments were made to a sub contractor for carrying out a part off work, or the work itself, undertaken by the assessee and that too when such individual’s turnover from business or profession exceeded threshold specified in section 44AB.
Admittedly, assessee has produced a register, which contained payments to various labourers. Admittedly, this register does not contain the addresses of the labourers nor it contains revenue stamp, nor is it signed by the Labour Department, no PF has also been deducted. Does all these wrongs in its entirety or individuality make the expenses incurred by the assessee deniable? Can this defect be held to be changing the mode of payment of the assessee from one mode to another? Here we would answer ‘no’.
