Tapas Kumar Sarkar Vs CIT(A) (ITAT Kolkata)
ITAT Kolkata Remands TDS Disallowance Dispute – Advertising Agency Gets Fresh Chance Before CIT(A)
Assessee, an advertising professional, appealed against CIT(A)/NFAC orders confirming disallowances u/s 40(a)(ia) for non-deduction of TDS on advertisement & incentive payments. In AY 2012-13, AO made additions of ₹50.05 lakh (advertisement expenses) & ₹6.24 lakh (incentive payments). In AY 2013-14, ₹81.09 lakh was disallowed on similar grounds.
AO held that TDS was deductible u/s 194C on payments to media & u/s 194J on incentive payments. Assessee contended that he acted merely as an intermediary between clients & media houses, hence no TDS was applicable on such pass-through payments. He relied on CBDT Circulars 715 (1995) & 5/2016, clarifying that advertising agencies acting as intermediaries need not deduct TDS on payments made to media. It was further argued that where recipients have disclosed income & paid tax, no disallowance should be made, & at most, only 30% disallowance could apply post-2015 amendment.
Tribunal found that CIT(A) had not properly considered these submissions & CBDT circulars. Since the matter involved both legal interpretation & factual verification, & Assessee sought a chance to file detailed explanations, ITAT held that the issue required fresh examination on merits.
