Non-Deduction of TDS: No Addition if deductee has Filed ITR and given Form No 15G/15H

The Assessee filed return of income on 26/09/2012 declaring total income of Rs.12,94,686 and the same was processed u/s 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny. A fresh notice u/s 142(1) along with the questionnaire was issued on 11.08.2014.  In the assessment order, the assessee was disallowed an amount of Rs.5,18,596 on the ground that the assessee has not followed the provision of Section 194A r.w.s. 40(a)(ia) of Income Tax Act, 1961.

Appeal before CIT(A):  Aggrieved by the assessment order the assesse has preferred the appeal before the Ld. CIT(A) and the Ld. CIT(A) partly allowed the appeal by sustaining the addition of Rs.1,64,130. Aggrieved assessee has preferred the present appeal.

After hearing both parties and perusing the tribunal held that both the CIT(A) and the AO have not examined as to whether or not Smt. Kamalabai B. Rathi has taken into account of the income of interest received from the assessee of Rs.1,64,130 while computing the income in her return filed on 29.03.2013 and whether she has paid the tax due on the income declared by her in the return or not in terms of second proviso to Section 40 (i) (ia) r/w first proviso to Section 201(1) of the Act.

Therefore, the Tribunal remanded the matter to the file of Ld. AO to examine whether or not Smt. Kamalabai B. Rathi has taken into account of the income of interest received from the assessee of Rs.1,64,130 while computing the income in her return and has paid the tax due on the income declared by her in the return, on examination of the same, the AO is directed to decide the issue in accordance with the law.

The appeal is allowed and the Assessee shall be provided with the opportunity of being heard and to produce any documents in support of the claim.

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