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2017 (11) TMI 191 - ITAT HYDERABADTDS u/s 194C OR 194J - nature of technical services - short deduction of tds - levy of tax u/s. 201(1) and levy of interest u/s. 201(1A) - Held that:- Whether the tax is to be deducted u/s. 194C or 194J, it does not matter, so long as the demand u/s. 201(1) cannot be raised as per the provisions of the Act, on the fact that deductees have paid taxes thereon on the incomes. CIT(A) has considered that assessee has correctly deducted tax u/s. 194C and the issue of demand u/s. 201(1) was considered as an alternative plea. However, we noticed that certain amounts are to be considered u/s. 194J. Therefore, this issue of considering the amounts u/s. 194C or 194J of various services rendered is to be restored to the file of AO for verification afresh keeping in mind the services rendered, the principles of law involved and the facts of the case. In case assessee satisfies that the deductees have paid taxes, the proviso to Section 201(1) may apply and no further demand u/s. 201(1) can be raised. The so called Chartered Accountant’s certificate, filed before the CIT(A) can also be examined, keeping in mind the observations of the CIT(A) in the alternate, plea discussed in para 12 of the order of the CIT(A). Therefore, AO is directed to examine about the nature of services and which of the services are coming u/s. 194J, then examine whether a demand u/s. 201(1) can be raised in AYs. 2013-14 and 2015-16. If assessee satisfies that the deductees have paid taxes thereon on the incomes, no demand u/s. 201(1) can be raised. We are of the opinion that to the extent of levy of interest u/s. 201(1A) is concerned, the issue is to be examined whether any of these services are required to be considered u/s. 194J. In case any of the services are considered to be covered u/s. 194J, then AO is statutorily required to levy interest u/s. 201(1A) even though no demand is raised u/s. 201(1). This requires a separate consideration by the AO. The issue of levy of interest u/s. 201(1A) for the duration of interregnum period i.e., from the date of payment on which TDS was to be made and to the dates payment of tax by the deductees is required to be levied after due examination of the facts. AO is directed to examine the facts and consider the principles of law before levying interest u/s. 201(1A). Assessee should be given due opportunity before deciding the issue. Assessee is also directed to furnish necessary details to examine the services which may be covered u/s. 194C/194J. With these observations, the issues in these appeals are restored to the file of AO, for which purpose the orders of the CIT(A) and AO which were originally passed are hereby set aside with a direction to reexamine the issue as stated above.
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