ITAT directs AO to use judicious approach and call for confirmation U/S 133(6) on grounds of Information not being provided in prescribed format and duly signed by CA [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that Information not being provided in prescribed format and duly signed by CA gives AO authority to use judicious approach and call for confirmation under section 133(6) of the Income Tax Act.

The assessee company filed its return of income for assessment year 2012-13 on 29.09.2012 declaring total income at loss of (-) Rs. 1,65,98,229/-and the case of the assessee was assessed under section 143(3) of the Act. Thereafter reassessment proceedings were initiated by issuing notice under section 148 of the Act on 28.09.2016 after taking necessary approval on the pretext that the assessee has paid interest of Rs. 42,40,572/- to Kotak Mahindra Prime Ltd. on which TDS was not deducted. Therefore, the expenditure of Rs. 42,40,572/- are not allowable as per the provisions of Section 40(a)(ia) of the Income Tax Act.

The Notice under Section 148 dated 28.09.2016 issued was duly served upon the assessee company. In response to the notice under section 148 of the Act the assessee company filed its return of income on 24.10.2016 wherein loss of (-) Rs. 1,65,98,229/- was declared which is as declared in the original return of income filed. Accordingly, notice under Section 143(2) and 142(1) of the Act were issued on 01.02.2017. Conclusively, the AO made addition in the hands of the assessee.

Aggrieved, from the said order of assessment, the assessee filed an appeal before the  CIT(A) who after hearing the contention of the assessee allowed the appeal of the assessee. Aggrieved from the order of the  CIT(A), the Revenue preferred this appeal.

After hearing both the parties, the tribunal noted that the AO has not considered that letter/certificate obtained from Kotak Mahindra Prime Ltd as the same was not furnished in accordance with Rule 31ACB as amended w.e.f. 19-02-2013 and disallowed the claim of interest paid to Kotak Mahindra Prime Ltd for nondeduction of tax at source amounting to Rs.42,40,572/-. The assessee during appellate proceeding submitted that the assessee claims that though the requirement of furnishing the certificate was not in the prescribed format yet the declaration which was provided by Kotak Mahindra Prime Ltd. cannot be rejected as the same had been produced in good faith and intention.

The two member bench consisting of Rathod Kamlesh Jayantbha (Accountant member) and Dr. S. Seethalakshmi (Judicial member) held that the information was not in the prescribed format and duly signed by the Chartered Accountant. The  AR for the assessee fairly submitted that he will substantiate the claim by filing proper evidence and the  AO was directed to use judicious approach and if require may call for the confirmation under Section 133(6) with these observation. Thus the appeal was allowed.

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