By TIOL News Service

BANGALORE, FEB 09, 2017: THE ISSUE IS - Whether mere submission of Form 15J before incorrect authority due to inadvertent human error, is saved by the provision of Section 292B and hence would not render the income tax return as invalid. YES is the verdict.

Facts of the case:

The assessee is engaged in the business of hiring/plying of trucks for transporting the goods. Though its assessment for the A.Y 2008-09 was completed u/s 143(3), however, subsequently, the CIT initiated proceedings against the assessee u/s 263, ostensibly on the ground that the assessment order passed by AO was found to be erroneous as well as prejudicial in the interest of Revenue. Since the assessee had paid truck hire charges of Rs.30,35,515/- to one Mr. Shantinath B. Patravali, and had also paid Rs.17,80,639/- to Smt. Savita S. Patravali, the assessee was required to submit Form No.15J before the appropriate Authority. However, as the assessee had failed to submit the said Forms before the appropriate Authority, it was felt that the payment made to these two persons was in violation of Section 194C(3). After the issuance of notice, the assessment was completed u/s 143(3) r/w/s 263 by determining the revised income at Rs.57,56,290/-, along with other additions, an addition of Rs.48,61,154/- was also made to the total income of the assessee. The latter amount was the amount of disallowance u/s 40(a)(ia). By order, the AO observed that since the assessee had failed to file the Form No.15J, the requirement of Section 194C(3) had not been fulfilled. Therefore, the said amount was disallowed u/s 40(a)(ia).

On appeal, the HC held that,

++ a bare perusal of the impugned order clearly reveals that the assessee had paid the truck hire charges both to Mr. Shantinath Patravali and Smt. Savita Patravali. As mentioned, from both these sub-contractors he had received Form No.15-I. The assessee was required to submit the Form No.15J before the CIT at Bangalore. However, as the Office of Income Tax, and the Office of CIT (TDS) were opposite each other, on the same floor of the building, inadvertently the Form No.15J was submitted before the ITO, instead of CIT (TDS). Thus, a human error had occurred in submitting the Form No.15J before the concerned Authority. The fact that the Form No.15J had been submitted before the incorrect Authority, was noticed even by the AO in the Assessment Order. According to the said order, copies of Form No.15J had been received by him, and were kept in the record. Therefore, merely a human error had occurred. Hence, clearly the case is covered by the provisions of Section 292B;

++ moreover, in the impugned order passed by the Tribunal, it was noticed that u/s 40(a)(ia), payment made towards interest, commission or brokerage, etc., are to be disallowed while computing the total income of assessee under the head "Profits and gains of business or profession", where the tax required to be deducted is not deducted or whereafter such deduction, the same has not been paid on or before due date of filing of the Income Tax return. Thus, the addition u/s 40(a)(ia) can be made only if there is default in deducting tax at source u/s 194C(3). However, the assessee is not required to deduct the tax if the sub-contractors produces the necessary declaration in the prescribed Form and the sub-contractor does not own more than two goods carriages during the previous year. Admittedly, the sub-contractors in the present case did not own more than two goods carriages during the previous year. Thus, the assessee was not required to deduct the tax at source. Merely because the Form No.15J was not filed before the concerned Authority, that too due to human mistake, the disallowance could not be denied to the assessee. Since cogent and convincing reasons have been given by the Tribunal, the substantial questions of law do not arise in the present case for consideration.

(See 2017-TIOL-273-HC-KAR-IT)