COMMISSIONER OF INCOME TAX, KOLKATA Vs. M/S.PEERLESS HOSPITEX HOSPITAL & RESEARCH CENTRE LTD, KOLKATA

JUDGEMENT

(1.) By consent of the learned Advocates appearing for the parties, we are taking up this appeal along with the stay petition for hearing together.

(2.) We shall also take into consideration an application taken out by the respondent-assessee, registered as G.A. No.3461 of 2013. This application is in the nature of an application under order 41 rule 27 of the Code of Civil Procedure and the assessee wants us to examine the written submission filed by it before the Commissioner of Income Tax (Appeals) in connection with the assessment order with which we are concerned in this appeal. The dispute involved in this appeal has its origin in the assessment order passed by the Assessing Officer being the Income Tax Officer, Ward-XI(I), Kolkata. The Assessing Officer, in his order passed on scrutiny assessment, had directed addition of a sum of Rs. 1,02,22,542/-. This figure represents a sum which was paid by the assessee to another unit, National Neuro Science Centre, in respect of services and consultancy. The assessment year involved in the case is 2008-09. The aforesaid sum was paid during the relevant previous year by the assessee. The assessee is engaged, mainly, in operating hospital services. The ground on which such addition to income of the assessee was directed was that the assessee did not deduct TDS in respect of the said sum in terms of section 194C of the Income Tax Act, 1961. Addition was directed under the provisions of section 40(a)(ia) of the 1961 Act.

(3.) The assessee was successful in upturning this order for addition before the Commissioner of Income Tax(Appeals) as also before the Tribunal. Both these statutory fora relied on a Special Bench decision of the Tribunal in the case of Marylene Shipping and Transport v. Additional CIT, ([2012] 20 taxman.com 244) . That decision was delivered on 9th April, 2012 in ITA No.477/Vizag/2008. The Special Bench of the Tribunal held that the provisions of section 40(a)(ia) of the Act are applicable only to the amounts of expenditure which are payable as on 31st March every year and that provision could not be invoked to disallow the expenditure which had actually been paid during the previous year, without deduction of TDS.