2023 (10) TMI 1033 - AT - Income Tax

Validity of order passed by the A.O u/s. 201(1) 201(1A) - default for non-deduction of tax at source u/s. 194C and u/s. 194J - HELD THAT - AR had failed to point out any infirmity in the order passed by the CIT(Appeals). Apart from that, it is not the case of the assessee that as respective payees having included the aforementioned amounts in their respective returns of income and paid taxes on the same, it was, thus, not liable to be held as being in default. Having given thoughtful consideration, find no infirmity in the view taken by the CIT(Appeals), who had rightly upheld the liability fastened upon the assessee u/s. 201(1) 201(1A) of the Act by the A.O. Decided against assessee.

Summary

Issues Involved:
The appeal challenges the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi, arising from the order by the Assessing Officer (A.O) u/s 201(1) & 201(1A) of the Income-tax Act, 1961 for the assessment year 2011-12.

Issue 1: Non-deduction of TDS under Section 194C:
The State Government department, as the assessee, underwent a TDS survey u/s. 133A of the Act, where it was found that TDS was not deducted on payments totaling Rs. 42,59,946 as required by Section 194C. Consequently, the A.O. held the assessee in default, imposing a tax liability u/s. 201(1) of Rs. 85,199/- and interest u/s. 201(1A) of Rs. 78,304.

Issue 2: Non-deduction of TDS under Section 194J:
Further, the A.O. noted that the assessee failed to comply with Section 194J by not deducting TDS on payments of Rs. 8,51,117 made to M/s. Creative Architect. This led to the A.O. holding the assessee in default, imposing a tax liability u/s. 201(1) of Rs. 85,112/- and interest u/s. 201(1A) of Rs. 80,856.

Issue 3: Appeal and Condonation of Delay:
The assessee appealed the CIT(Appeals) decision, arguing that the tax and interest levied were illegal, denied adequate opportunity for a hearing, and were unjustified. The appeal was submitted after a delay, which the Authorized Representative sought to condone due to difficulty in collecting required documents within the filing period. The Departmental Representative did not object to condonation, and the delay was considered bona fide and condoned.

Judgment:
The CIT(Appeals) upheld the A.O.'s decision, emphasizing the failure of the assessee to deduct TDS as required, leading to the liability. The appeal before the Judicial Member was dismissed as it failed to demonstrate any flaw in the CIT(Appeals) decision. The Judicial Member found no merit in the appeal, upholding the liability imposed on the assessee u/s 201(1) & 201(1A) of the Act. The reliance on a previous case was deemed inapplicable due to factual distinctions. The appeal was dismissed, with the second ground not pressed, resulting in the dismissal of the assessee's appeal.

This summary provides a detailed breakdown of the issues involved in the legal judgment, including the non-deduction of TDS under different sections, the appeal process, and the final judgment rendered by the Judicial Member.