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2023 (10) TMI 270 - AT - Income TaxTDS u/s 194C or 194I - tax liability on CAM charges - short deduction of TDS - Demand u/s. 201(1A) holding the Assessee to be 'Assessee in default' - HELD THAT - By respectfully following the order of case of Yum Restaurants India 2022 (10) TMI 256 - ITAT DELHI and also the order passed in Assessee s own case for A.Y 2012-13 2023 (2) TMI 58 - ITAT DELHI we hold that the provisions for rent are governed by Section 194-I and CAM charges by Section 194C of the Act, accordingly, we allow the Grounds of appeals of the Assessee and set aside the impugned order and direct the AO to re-compute the CAM charges, taking into consideration the two sections mentioned above.
Issues involved:
The judgment involves issues related to the applicability of tax provisions on Common Area Maintenance (CAM) charges and the delay in filing the appeals. Issue 1: Applicability of tax provisions on CAM charges The assessee appealed against the order u/s 201(1A) regarding withholding tax liability on CAM charges. The first appellate authority confirmed the finding that the assessee was in default for not deducting tax on CAM charges as per section 194-I of the Act. The assessee argued that CAM charges should be governed by section 194-C, not 194-I. The delay in filing the appeal was condoned due to oversight, as explained by the counsel and supported by an affidavit. The Assessing Officer treated the assessee as in default for not deducting tax on CAM charges, which were considered part of rental activities. The Coordinate Bench's decision in a similar case favored the assessee, holding that CAM charges should be governed by section 194C, not 194-I. The judgment followed the precedent and directed the AO to re-compute the CAM charges accordingly. Issue 2: Delay in filing the appeals There was a delay of 115 days in filing the appeals, which was attributed to oversight on the part of the counsel and communication gap between the counsel and the assessee. The delay was condoned based on the reasons provided in the application for condonation of delay, including the departure of an employee causing the communication gap. The delay was deemed unintentional and condoned to allow the appeals to proceed. In conclusion, the judgment addressed the issues of tax liability on CAM charges and the delay in filing the appeals. It clarified the applicability of tax provisions on CAM charges, ruling in favor of the assessee based on previous decisions and directing the AO to re-compute the charges. Additionally, the delay in filing the appeals was condoned due to genuine oversight and communication issues between the parties.
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