Brief of the Case: In the case of Malineni Babulu (HUF) vs ITO, ITAT Hyderabad inter-alia held that the appellant failed to produce proof in support of dispatch of Form 15H to the CIT, this by itself does not entail any addition. It was only technical breach of law and the act provides for separate penal provisions for such default. Therefore, no disallowance can be made under the provisions of Section 40(a)(ia) of the IT Act.
Facts of the Case: The appellant was a HUF. The return of income for the AY. 2009-10 was filed on 30-09-2009 declaring net income of Rs.2,35,000/-. As against this return of income, assessment was completed u/s.143(3) vide order dated 21-12-2011 at a total income of Rs.4,85,000/- after making addition of Rs.2,50,000/- on estimate basis.
Thereafter, the CIT, Guntur had issued a show cause notice dated 20-01-2014 u/s.263 of the IT Act requiring the appellant to show cause as to why the assessment order cannot be revised to make additions u/s.40A(3) in respect of payment made to M/s. Coramandal Fertilizers Ltd., and M/s. Ravindra Agro Service Centre, Gudur and addition of interest expenditure of Rs.98,193/- under the provisions of Section 40(a)(ia) for non-deduction of TDS.
In response to show cause notice, the appellant had submitted vide its letter dated 24-02-2014 contending that the provisions of Section 40A(3) are not applicable and in respect of the addition under the provisions of 40(a)(ia), it was submitted that the appellant had obtained Form 15H from the respective parties and the same was claimed to have been filed before the CIT and copy of which was filed before the AO. Hence, it was contended that provisions of Section 40(a)(ia) are not applicable.
CIT rejected the claim of the Assessee. Being aggrieved, the assessee filed the appeal before ITAT.
Grounds for appeal by assessee before ITAT: The assessee raised the following Grounds of Appeal challenging the order passed u/s. 263 of the IT Act:
