IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER Assessment Year : 2023-24

M/s. Shore Dwellings Pvt. Ltd. #C-5 5/1, Rich Homes, Richmond Road, Richmond Town, Bengaluru – 560 025. PAN: AAACZ3029P	Vs.	The Income Tax Officer, Ward – 6[1][1], Bengaluru.
APPELLANT		RESPONDENT

Assessee by : Shri V. Srinivasan, Advocate Revenue by : Smt. Srinandini Das, CIT-DR Date of Hearing : 14-08-2025 Date of Pronouncement : 10-11-2025

ORDER

PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the Ld.Addl/JCIT(A)-3, Chennai dated 07/03/2025 in respect of the A.Y. 2023-

24.

2. The brief facts of the case are that the assessee filed their return of income on 31/10/2023. Thereafter, filed a revised return of income on 29/12/2023 and declared a loss of Rs. 211,32,58,126/-. Along with the said return, the assessee also filed the tax audit report in form 3CA and form 3CD on 27/12/2023. The return was processed u/s. 143(1) in which the CPC had determined the total income at Rs. 130,41,54,330/-.

3. In the said intimation, the CPC had disallowed an expenditure u/s. 40(a)(i)(ib). The CPC had disallowed the said expenditure for the reason that the assessee had not deducted the tax at source while making the payments towards the interest to various parties. The assessee also furnished the form 26A. The assessee therefore submitted that the disallowance in spite of the form 26A provided by the parties is not correct. As against the said disallowance, the assessee filed an appeal before the Ld.CIT(A) and contended that the assessee is in possession of form 26A as required under the first proviso to sub-section(1) of section 201 of the Act. At the time of hearing, the assessee also submitted that there was an inadvertent error while filing the form 3CD in which the provision has been wrongly mentioned as 40(a)(i)(ib) instead of 40(a)(ia) of the Act. The Ld.CIT(A) had also considered the disallowance u/s. 40(a)(ia) of the Act. The Ld.CIT(A) had observed that the form 26A was submitted manually and not filed through online as required by the Notification No. 11/2016 in F.No. DGIT(S)/CPC(TDS)/Notification / 2016-17 dated 02/12/2016 in which it was mandated that from A.Y. 2017-18, form 26A ought to have filed through online. The assessee submitted that the said form 26A was filed on 04/03/2025 and also produced the acknowledgement receipt to the effect that the form 26A was filed through online. The Ld.CIT(A) thereafter observed that in form 26A, annexure –A has not been filed and therefore concluded that the assessee had not complied with Rule 31ACB r.w. Notification No. 11/2016. Finally, the Ld.CIT(A) had confirmed the disallowance made u/s. 40(a)(ia) of the Act on the ground that the assessee had not furnished the required certificate in form 26A through online. The Ld.CIT(A) further observed that the assessee had not furnished the relevant annexure – A to form 26A through online. The Ld.CIT(A) also pointed out some discrepancies in the amounts to the form 26A and the report in form 3CD and therefore confirmed the disallowance made by the CPC. Insofar as the consequential levy of interest, the Ld.CIT(A) had remitted the same to the AO for considering the issue afresh and in accordance with law.

4. As against the said order, the present appeal has been filed by the assessee before this Tribunal.

5. At the time of hearing, the Ld.AR submitted that the disallowance of expenditure u/s. 40(a)(ia) of the Act is not correct. The Ld.AR further submitted that there was an error in form 3CD in which a higher figure of interest payable as against the correct amount recorded in the books of accounts, was also not considered by the Ld.CIT(A). Further, the Ld.AR submitted that the non-deduction of TDS on the fees for professional services, payment to Director, commission and brokerage is unwarranted since the

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