2018 (9) TMI 281 - AT - Income Tax

TDS u/s 194C, 194J and 194I - chargeability of interest u/s. 201(1A) - Held that - For AY 2007-08, it is stated by CIT(A) that effectively, the appeal is now directed against charging of interest u/s. 201(1A) only amounting to ₹ 1,05,73,063/-. Similarly in AY 2008-09 in Para 10 of his order, it is held by CIT(A) that the appeal with regard to charging of tax u/s. 201(1) is treated as allowed and decision in this year also is only regarding chargeability of interest u/s. 201(1A) of IT Act. Hence it is seen that in the impugned orders, CIT(A) has not examined this aspect at all as to whether TDS is deductible u/s. 194J, 194-I and 194C in Assessment Year 2007-08 and u/s. 194C in Assessment Year 2008-09. Under these facts, we feel it proper that this issue should go back to the file of CIT(A) for a decision on this aspect also as to whether the TDS is deductible or not under the relevant provisions of IT Act i.e. 194C in both years and 194J and 194-I in Assessment Year 2007-08 and therefore, we set aside the order of CIT(A) and restore the matter back to his file for fresh decision after examining this aspect also. - Appeals filed by the assessee are allowed for statistical purposes

Summary

Issues:
- Appeal against orders of CIT(A) for Assessment Years 2007-08 and 2008-09 regarding levy of interest u/s.201(1A) of the IT Act.
- Dispute over the obligation to deduct tax at source u/s.194C, 194J, and 194-I.
- Arguments on whether TDS was deductible in both assessment years.
- Reference to a judgment of the Hon'ble Apex Court in support of the contention regarding works contract.

Analysis:

Assessment Year 2007-08:
The assessee raised grounds against the levy of interest u/s.201(1A) by CIT(A) for not deducting tax at source under Sec.194C. The additional grounds challenged the TDS liability on payments to M/s. Suzlon Infrastructure Pvt. Ltd. and M/s. Suzlon Energy Ltd. The appellant contended that TDS was not applicable under Sec.194J and 194-I for these payments. The argument focused on the non-deductibility of TDS under relevant provisions. The Revenue supported CIT(A)'s decision, citing a judgment of the Hon'ble Apex Court. The ITAT observed that CIT(A) did not address the issue of TDS deductibility under Sec.194C, 194J, and 194-I. Consequently, the matter was remanded back to CIT(A) for a fresh decision after considering this aspect. As a result, the appeal was allowed for statistical purposes.

Assessment Year 2008-09:
Similar to the previous year, the appellant contested the levy of interest u/s.201(1A) by CIT(A) for non-deduction of TDS under Sec.194C. The grounds raised questioned the obligation to deduct tax at source under Sec.194C. The appellant argued against the TDS liability for payments made to M/s. Shree Damodar Coach Crafts Pvt. Ltd. The ITAT noted the absence of CIT(A)'s examination of TDS deductibility under relevant provisions. Consequently, the ITAT set aside CIT(A)'s order and remanded the matter back for a fresh decision. Both appeals were allowed for statistical purposes.

In conclusion, the ITAT directed a reevaluation of the TDS deductibility issue by CIT(A) for both assessment years, emphasizing the need for a comprehensive analysis of the relevant provisions. The decision highlighted the importance of considering the applicability of TDS requirements before levying interest under the IT Act.