2008 (1) TMI 895 - AT - Income Tax

Summary

Issues involved: Appeal against orders of CIT(A) u/s 201(1) and 201(1A) of the Income Tax Act, 1961 for assessment year 2004-05.

Summary:
The appeals were filed against two separate orders of the CIT(A) for the assessment year 2004-05 under sections 201(1) and 201(1A) of the Income Tax Act, 1961. The Assessing Officer raised demands against the assessee for TDS amounts not remitted to the government. The assessee's explanations were not accepted, leading to the demands and interest being raised. The CIT(A) upheld the Assessing Officer's order. The assessee contended that the TDS liability was no longer valid as entries were reversed in the subsequent financial year and the payee had sufficient losses for set-off. The Departmental Representative argued that the liability to deduct tax remained despite entry reversals and the payee's losses were not the payer's concern. Citing relevant case laws, the Departmental Representative emphasized the assessee's responsibility to deduct tax at source. The Tribunal held that the demand related to rent payments was unjustified as the payee had no tax liability due to significant losses, thus cancelling the demand and interest. However, the demands related to other payments were upheld due to lack of substantial arguments for cancellation.

In conclusion, the appeals were partly allowed, canceling the demand and interest for rent payments but sustaining the demands for other payments.