ITAT directs to produce CA certificate in prescribed Form 26 to re-adjudicate disallowance made u/s.40(a)(ia) of Income Tax Act [Read Order]

By Aparna. M - On December 10, 2023 8:00 pm - 2 mins read

ITAT directs to produce CA certificate in prescribed Form 26 - re-adjudicate disallowance - Income Tax Act - TAXSCAN

The Income Tax Appellate Tribunal (ITAT), Raipur bench, directed the assessee, Sandeep Surendran Nair, a mechanical contractor in the cement industry, to produce a Chartered Accountant certificate in prescribed Form 26 for the re-adjudication of the disallowance made under Section 40(a)(ia) of the Income Tax Act, 1961.

Sandeep Surendran Nair filed his income tax return for the assessment year 2014-15, declaring an income of Rs.69,30,640 on 29.11.2014. The case was subsequently selected for scrutiny assessment under CASS. The Assessing Officer (AO) framed the assessment order, disallowing Rs.1,54,827 under Sec. 40(a)(ia) for deduction of interest paid to NBFC.
The assessee appealed to the CIT (Appeals) unsuccessfully. During the proceedings, Counsels for the assessee argued that the CA certificate, filed under Rule 29 of the ITAT Rules, 1963, showed that Religare Finvest Ltd. included the interest charges in its return of income for A.Y 2014-15.
The tribunal observed that, despite the CA certificate mentioning the inclusion of interest charges, the prescribed “Form 26A” was not used, rendering the information inaccurate. Therefore, the conclusion that the assessee is not in default under Section 201(1) and Section 40(a)(ia) cannot be drawn.
Taking into account the technical error in providing the accountant certificate in the required format, the bench directed the production of the Chartered Accountant certificate in prescribed Form 26 for the re-adjudication of the disallowance under Section 40(a)(ia) of the Income Tax Act.

The two-member bench consisted of Arun Khodpia (Accountant Member) and Ravish Sood (Judicial Member).

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