The Kolkata bench of Income Tax Appellate Tribunal (ITAT) has recently held that the landlord is not liable for deduction of Tax Deduction at Source (TDS) under wrong provision of the Income Tax Act by the tenant.
Assessee Bengal Shelter Housing Development Limited is a joint sector company promoted by West Bengal Housing Board, Government of West Bengal and Shelter Project Ltd. Both the entities have a contribution of 50% each towards paid up capital of the assessee company. Assesee filed an appeal before ITAT on the ground of passing an ex-parte order against the assessee by CIT (A) without providing opportunity of hearing.
Counsel for the assessee Sidhharth Agarwal submitted that, both the impugned orders are ex-parte orders. The assessment order is passed under section 144 of Income Tax Act 1961 according to the best judgment of the Assessing Officer. He took us through the records and pointed out how the Assessing Officer has committed an error in passing the best judgment assessment.
Ghayasuddin counsel for the revenue submitted that the Assessing Officer determined the income of the assessee on the basis of the best of his judgment.
The division bench of the Kolkata tribunal comprising Rajpal Yadav, (Vice-President) and Dr. Manish Borad, (Accountant Member) while allowing the appeal of the assessee observed that in making a best judgment assessment the Assessing Officer must not act dishonestly or vindictively. He must make what he honestly believes to be a fair estimate of proper figure of assessment and for this purpose he must be able to take into consideration local knowledge, business of the assessee and his own knowledge of the previous return of income by the assessee.
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