Rakhi Sawant income tax appeals gets both relief and dismissal from ITAT-dismissal for delay, disallowance us 40(a)(ia) remanded assessee being not covered u/s 44AB
ABCAUS Case Law Citation:
1037 (2016) (10) ITAT
Appeal-1 dismissed for dealy
There was a delay of 704 days for filing the appeal. The assessee admitted that the appellate order of the CIT(A) was served upon her on 15.3.2011 and that the last date for filing the appeal before the Tribunal was 15.5.2011. It was pleaded that her Chartered Accountant who had represented her case in the proceedings before the lower authorities did not co-operate with her in handling the appeal before this Tribunal.
However the ITAT did not find any plausible reasons to justify the long delay of 704 days for filing the appeal. The Tribunal opined that even though earlier Chartered Accountant did not co-operate with her, yet, she was required to file appeal in a reasonable time. The delay of few days for non co-operation of the Authorized Representative/CA can be understood, but what prevented the assessee to engage another representative for a period of above two years remained un-explianed.
Therefore the ITAT not finding any merit in the application for condonation of delay dismissed it and accordingly, the appeal of the assessee was also dismissed being barred by limitation.
Appeal-2 Disallowance u/s 40(a)(ia) remanded
This appeal was preferred against the order of the CIT(A) in relation of the assessment proceedings carried under section 143(3) read with section 263 of the Income Tax Act, 1961.
The only issue raised in the appeal was related to confirmation of addition for payment made to Super Cassette Industries Limited. The Assessing Officer (AO) had disallowed the said expenditure on account of two counts, firstly, that the assessee did not deduct TDS on such payment and hence the expenditure was not allowable under the provisions of section 40(a)(ia), secondly, that the assessee has not established the genuineness of the requirement of payment for the purposes of business /profession of the assessee.
The assessee pleaded that the she was an individual and not at all covered under section 44AB in view of clause (i)(1) to the Explanation to section 194C and also in the light of second proviso to section 194J, the assessee was not liable to deduct TDS either under section 194C or 194J and hence no disallowance could have been made u/s 40(a)(ia).
It was also been pleaded that the payment was made to Super Cassette Industrial Ltd towards video production charges and that the assessee had no control over the company including the selection of Director. Also that the payment was made towards video production charges which was relatable to her business or profession.
Observations made by the Tribunal:
The ITAT observed that the CIT(A) has not discussed about the non applicability of the provisions of section 194C and or 194J and has straightway applied the provisions of TDS u/s 40(a)(ia). Even regarding the genuineness/requirement of the payments for assessee’s profession, the order of CIT(A) was not a speaking one. Therefore the entire matter was required to be looked into afresh by the CIT(A).
The order of the CIT(A) was set aside and the appeal of the assessee was restored back to the file of the CIT(A) to decide the same afresh after providing opportunity of being heard to the assessee.