2017 (4) TMI 1053 - AT - Income Tax

TDS u/s 194J - non deduction of TDS on the amount towards MTNL on account of lease line charges along with interest and VSAT operating charges and transaction charges - ex-parte order - Held that - The notice has been issued to the assessee which was duly served to the assessee but the failed to appear before us, therefore, he was proceeded against ex-parte. The assessee as well as his representative nowhere represented the case. No material of any kind was produced before us to which it can be assumed that the finding of the CIT(A) is wrong against law and facts and is liable to be set aside. It is not in disputed that the assessee paid lease line charges, transaction charges and CDSL Charges but failed to deduct the tax u/s.194J of the Act. The Assessing Officer has rightly deduct the tax along with interest as per law, therefore, we nowhere found any wrong order passed by the Assessing Officer which has been confirmed by the CIT(A) in question. Since no material of any kind was produced before us to differentiate the finding of the CIT(A) in question, therefore, we are of the view that the CIT(A) has decided the matter judiciously and correctly which is not required to be interfere with at this appellate stage. Accordingly, all these issues are decided in favour of the revenue against the assessee.

Summary

Issues:
1. Non-deduction of TDS on professional fees under section 194J of the Income Tax Act, 1961.
2. Challenge against the ex-parte order passed by the CIT(A).
3. Disallowance of payment made to BSE for lease line charges under section 194J of the Act.
4. Confirmation of order by the Assessing Officer under sections 201(1) and 201(1A) of the Act.

Issue 1: The assessee failed to deduct TDS on professional fees under section 194J of the Income Tax Act, resulting in disallowance of the payment under section 40(a)(ia) of the Act. The Assessing Officer calculated the TDS amount and interest under section 201(1A) at ?10,933 and ?5,248 respectively. The CIT(A) confirmed this addition, leading the assessee to appeal. However, the assessee did not appear before the tribunal, and no material was presented to challenge the CIT(A)'s decision. As the Assessing Officer's order was found to be correct and in accordance with the law, the tribunal upheld the decision, ruling in favor of the revenue against the assessee.

Issue 2: The assessee contested the ex-parte order passed by the CIT(A) on the grounds of natural justice and fair play, stating that an adjournment letter was ignored. Despite this claim, the tribunal noted that the assessee and their representative did not appear before them, failing to provide any evidence to dispute the CIT(A)'s decision. As a result, the tribunal found no reason to interfere with the CIT(A)'s order, ultimately dismissing the appeal.

Issue 3: The dispute arose regarding the payment made by the assessee to BSE for lease line charges, VSAT operating charges, and transaction charges, amounting to ?2,12,297. The assessee argued that these payments did not fall under section 194J of the Act. However, both the Assessing Officer and the CIT(A) upheld the disallowance of these payments for non-deduction of tax under section 194J. The tribunal found no merit in the assessee's arguments, as no evidence was presented to challenge the lower authorities' decisions. Consequently, the tribunal ruled in favor of the revenue, dismissing the appeal.

Issue 4: The Assessing Officer's order under sections 201(1) and 201(1A) of the Act, raising a demand for non-deduction of tax on payments made to BSE, was challenged by the assessee. The tribunal observed that the assessee failed to deduct tax on various charges paid to BSE, leading to the Assessing Officer's decision to deduct tax and interest. As the assessee did not provide any material to contest the CIT(A)'s confirmation of the Assessing Officer's order, the tribunal upheld the decision in favor of the revenue, dismissing the appeal.