2023 (8) TMI 910 - AT - Income Tax

Levying interest on late payment of TDS u/s. 201(1A) - Assessee is a Third Party Administrator for insurance companies and made payments to various hospitals under cashless scheme on behalf of the insurance companies - Intimation u/s. 154 read with section 200A of the Act charged interest on late payments of TDS u/s. 201(1A) - Ld. Commissioner held that section 194J applies to the payments made by the petitioners to juristic or corporate entities that are providing professional services and the provisions of section 194J are clearly applicable in Third Party Administrator (TPA) cases - HELD THAT - As all the contentions of the Assessee raised before the ld. Commissioner have been properly considered by the first appellate authority in the impugned order and even otherwise we do not find any reason and/or material to contradict the decision made by the ld. Commissioner on the merits of the issue. Hence, the impugned order does not call for any interference on this count. Decided against assessee.

Summary

Issues Involved:
1. Levying interest on late payment of TDS under Section 201(1A) of the Income-tax Act, 1961.
2. Dismissal of appeals due to delay in filing.

Summary:

1. Levying Interest on Late Payment of TDS:
The primary issue in these appeals was whether the authorities were justified in levying interest on late payment of TDS under Section 201(1A) of the Income-tax Act, 1961. The Assessee, a Third Party Administrator (TPA) for insurance companies, made payments to various hospitals under a cashless scheme on behalf of insurance companies. The CPC-Bangalore charged interest on late payments of TDS under Section 201(1A) of the Act. The Assessee's first appeal was dismissed by the Commissioner, who upheld the levy of interest, referencing CBDT Circular No. 8/2009 and the Delhi High Court's decision in Writ Petition (Civil) No. 121 of 2010, which clarified that Section 194J applies to payments made by TPAs to hospitals. The Commissioner noted that the Assessee did not provide any documentary evidence to avoid being treated as an assessee-in-default and emphasized that interest under Section 201(1A) is consequential and not subject to financial hardship.

2. Dismissal of Appeals Due to Delay in Filing:
The appeals for assessment years 2014-15 and 2017-18 to 2019-20 were also dismissed as barred by limitation. The Assessee claimed delays were due to the departure of their CFO in 2015 and ongoing efforts to correct significant demands in TRACES. However, the Commissioner found these reasons insufficient, attributing the delay to negligence. The Tribunal noted that once the Commissioner decided the appeals on merits, it implied that the delay was condoned. Citing the Madras High Court's decision in Vijayeswari Textiles Ltd vs. CIT, the Tribunal held that deciding on merits while refusing to condone the delay was erroneous. Nevertheless, the Tribunal upheld the Commissioner's decision on the merits of the case.

Conclusion:
The Tribunal dismissed all appeals, affirming the levy of interest on late payment of TDS and the Commissioner's handling of the delay in filing appeals. The order was pronounced in open court on 29/03/2023.