2023 (9) TMI 205 - AT - Income Tax

Order u/s. 201 (1) r.w.s. 201(1A) - Non deduction of TDS - payees concerned have offered the same to tax and therefore, they duly stand assessed - HELD THAT - We are afraid to accept the assessee s instant sole substantive contention for want of the corresponding records and evidence emanating from the case files. We make it clear that although the legislature has diluted the provisions of the impugned TDS recovery mechanism u/secs. 201(1) r.w.s. 201(1A) subject to only to the condition that it is incumbent for the assessee(s) in-default to file the relevant details to this effect going by sec. 201(1) first proviso introduced in the Act vide Finance Act, 2012 w.e.f. 01.07.2012. This is indeed coupled with the fact that the learned lower authorities have also rejected the assessee s contention for the very reason only as it is evident from the NFAC s above extracted detailed discussion. We thus see no merit in these assessee s identical sole substantive grievance. The same stands rejected.

Summary

Issues involved:
The judgment involves appeals against CIT(A) orders related to proceedings under sec. 201 r.w.s. 201(1A) of the Income Tax Act, 1961 for the assessment year 2017-18.

Details of the Judgment:

Issue 1: TDS non-compliance by the assessee
During a survey, it was found that the assessee did not deposit TDS into the government account after deduction. The Director of the company admitted to the TDS default. The Assessing Officer issued a show cause notice under sec. 201(1) / 201(1A) as TDS provisions were not complied with. The assessee failed to provide plausible explanations for the defaults and did not furnish CA certificates from vendors confirming payment of due taxes. The Assessing Officer computed the total TDS liability and interest under various sections, which the assessee disputed in the appeal.

Issue 2: Lack of response and non-compliance by the appellant
The appellant did not respond to multiple notices issued during the appellate proceedings. Despite opportunities, no written submissions supporting the grounds of appeal were filed. The final notice provided a last chance for the appellant to present their case, but no response was received. Citing legal precedents, it was emphasized that vigilance is essential to claim rights under the law. Due to the appellant's lack of response, the appeal was decided based on the documents submitted with the appeal memo.

Issue 3: Adjudication and dismissal of appeals
The assessee's main contention was that the payees had declared the TDS amounts for taxation, hence the liability should be reduced. However, the Tribunal noted the lack of evidence supporting this claim and rejected the substantive grievance. The provisions of sec. 201(1) r.w.s. 201(1A) were upheld, and the appeals were dismissed for non-compliance and lack of merit.

In conclusion, the appeals by the four assessees were dismissed due to non-compliance, lack of response, and the rejection of the substantive grievance regarding TDS liabilities. The Tribunal upheld the orders passed by the lower authorities and emphasized the importance of vigilance in legal proceedings.