Sandeep Surendran Nair Vs DCIT (ITAT Raipur)
ITAT Raipur restored the matter back to the file of AO in case of disallowance u/s. 40(a)(ia) of the Income Tax Act as the CA certificate submitted was not as per the prescribed form i.e. “Form 26A”. Post submission of CA certificate in prescribed form, disallowance u/s 40(a)(ia) will be vacated.
Facts-
The assessee, who is a mechanical contractor within the cement industry, had filed his return of income for A.Y. 2014-15 on 29.11.2014 declaring an income of Rs.69,30,640/-. Subsequently, the case of the assessee was selected for scrutiny assessment under CASS. Assessment was framed by the A.O vide his order passed u/s.143(3) dated 28.12.2016, determining the income of the assessee at 1,05,18,763/- after making additions in terms of mismatch of receipts as per books and 26AS and disallowance u/s. 40(a)(ia).
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion-
With respect to the disallowance under Sec. 40(a)(ia) of the assessee’s claim for deduction of interest paid to NBFC of Rs.1,54,827/-, the assessee has filed a certificate from a Chartered Accountant. Although the CA certificate refers to the fact that the payee, viz. Religare Finvest Ltd. had included the interest charges of Rs.91,964/- received from Vasava Engineering Construction in its taxable income and had paid the tax on its declared income, but, as the same is not in the prescribed form i.e “Form 26A” w. Rule 31ACB as provided in the “1st proviso” to Sec. 201(1) r.w. Section 40(a)(ia) of the Act, therefore, the same cannot be acted upon for concluding that the assessee is not to be treated as being in default as regards deduction of tax at source u/s 194A of the Act on the interest charges of Rs.91,964/- paid to Religare Finvest Ltd. Considering the technical lapse on the part of the assessee in not furnishing the accountant certificate in the prescribed form i.e “Form 26A”, we, thus, in all fairness restore the issue to the file of the A.O with a liberty to the assessee to furnish the same in the prescribed form in the course of the set-aside proceedings.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals)-II, Raipur dated 30.01.2020, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 28.12.2016 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal:
“1. Whether on the facts and circumstances as well as in question of law the Ld. CIT(A) had erred in confirming the additions made by the Ld. AO on account of mismatch between 26AS and contract receipts.
2. Whether on the facts and circumstances as well as in question of law the Ld. CIT(A) had erred in confirming the additions made by the Ld. AO on account disallowance made u/s.40(a)(ia).
3. Whether on the facts and circumstances as well as in question of law the Ld. CIT(A) had erred in confirming the additions made by the Ld. AO on account of old outstanding creditors.
4. Whether on the facts and circumstances as well as in question of law the Ld. CIT(A) had erred in confirming the additions made by the Ld. AO on account of unpaid “Profession Tax” liability u/s 43B.
5. Any other point to be taken at the time of ”
2. Succinctly stated, the assessee who is a mechanical contractor within the cement industry, had filed his return of income for the assessment year 2014-15 on 29.11.2014 declaring an income of Rs.69,30,640/-. Subsequently, the case of the assessee was selected for scrutiny assessment under CASS.
3. Assessment was framed by the A.O vide his order passed u/s.143(3) dated 28.12.2016, determining the income of the assessee at 1,05,18,763/- after, inter alia, making following additions:
