The Income Tax Appellate Tribunal, Gauhati Bench ruled that the finding of the id. CIT(A), acknowledging the provisions of Explanation 2 to Section 15 of the Act that consists of the salary, bonus, commission, or remuneration obtained via partner beneath the head ‘salary’ and considering the provisions of section 192 of the Act specified about the salary provided u/s. 15 of the Act, hence no need beneath the provisions of the act for the deduction of tax at source via the partnership firm on salary, bonus, commission or remuneration, and others or any other name called given or credited to a partner of a firm.
Recommended: Easy Guide to Read & Check Income Tax Intimation U/S 143(1)
The assessee is a partnership firm that is involved in the construction industry, according to the case’s brief facts. for the AY 2017-18, the Income of Rs.1,21,98,600/- was declared in the e-return filed on 16-10-2017. The case was chosen for investigation via CASS for the high ratio of the TDS refund, the large value refund claim, and the large rise in the capital in a year. Valid notices u/s. 143(2) & 142(1) of the Act were provided. On the basis of the non-deduction of tax at source on the commission paid to its partners one of the disallowances was established.
The Ld. Commissioner of Income Tax (Appeals) removed this disallowance, and The ACIT has appealed this decision to the ITAT.
According to ACIT, the Ld. Commissioner of Income Tax(Appeals) erred in ruling that the commission given to partners shall not be treated as Salary under Explanation to Section 15 of the Act and that the Salary-related provision of Section 192 would not apply in this case.
The Ld. Commissioner of Income Tax (Appeals), according to the ACIT, disregarded the fact that commission payments are covered by Section 194H of the Act, which meant the assessee was required to deduct TDS under that Section and in accordance with Section 197(2).
| Case Title | M/s. Dhar Construction Company Vs ACIT |
| Citation | ITA No.181/GAU/2020 |
| Date | 02.01.2023 |
| Appellant By | Shri Gaurav Chandak, FCA, Ld. AR |
| Respondent By | Shri I. Gyaneshori Devi, JCIT, Ld. SR-DR |
| ITAT Gauhati | Read Order |
