2023 (9) TMI 1623 - AT - Income Tax

Order u/s 201 201(1A) - assessee in default for non-deduction of TDS - As argued assessee was not liable to deduct TDS under its TAN as they centralized system of deducting TDS - second issue raised by the assessee was pertaining to deduction of TDS @1% u/s 194C of the Act whereas the same should be @20% when the PAN number of the contractor are not available - also issue of AR was pertaining to treating the assessee in default in respect certain amount without appreciating that the said deductee/payee had discharged the income tax liability due therein and filed the return of income without considering the provisions of Section 4, 191, 202 and 205 of the Income Tax Act, 1961 - additional evidences submitted by the assessee were accepted by the Tribunal and such evidences were not available before the authorities below. HELD THAT - On perusal of additional evidences, it is observed that all additional evidence with reference to the contentions raised in the grounds of appeal are subject to verification of facts emanating from such additional evidence. Under such circumstances, without going into the merits of the issues, with the concession of Departmental representative, after fair agreement by both the parties to restore the issues back to the files of AO for verification as well as examination of evidences furnished before us, which were not available before the lower authorities for their perusal, thus, in the interest of substantial justice, we find it appropriate to restore the issues back to the files of AO for re-adjudication of the same afresh. Assessee shall be provided with reasonable opportunity of being heard, liberty is granted to the assessee to furnish all such information/evidences which are necessary / significant in deciding the issues and to assist the proceedings before the Learned AO, failing which Learned AO would be at liberty to decide the issue in accordance with law.

Issues Involved:

1. Treatment of the assessee as "assessee in default" for non-deduction of TDS.
2. Computation of TDS at incorrect rates due to non-availability of PAN.
3. Calculation of interest on the alleged default amounts.
4. Treatment of the assessee as "assessee in default" despite the deductee/payee having discharged tax liabilities.
5. Admission of additional evidence under Rule 29 of the Income-Tax (Appellate Tribunal) Rules, 1963.

Detailed Analysis:

1. Treatment as "Assessee in Default":
The primary issue raised by the assessee was the incorrect classification as "assessee in default" concerning payments made for catering services and other transactions. The assessee argued that TDS was deducted and deposited by the head office under a centralized TAN system. The Tribunal noted that the assessee had indeed deducted and deposited the TDS, but the quarterly TDS statement under Section 200(3) lacked specific details, leading to the penalty under Section 272A(2)(k). The Tribunal decided to restore this issue to the Assessing Officer (AO) for re-evaluation, as additional evidence was presented that was not available during the initial proceedings.

2. Computation of TDS at Incorrect Rates:
The second issue involved the computation of TDS at 20% under Section 206AA due to the non-availability of PAN, which the assessee contended should have been at 1% as per Section 194C. The assessee claimed that PAN was submitted at a later date, and thus, the higher rate was not applicable. The Tribunal acknowledged the contention and decided to remit this issue back to the AO for reconsideration, allowing the assessee to provide additional evidence to support their claim.

3. Calculation of Interest:
The assessee disputed the interest calculation on the alleged TDS defaults. The Tribunal, considering the acceptance of additional evidence and the need for further verification, decided to remit this issue back to the AO for a fresh examination in light of the new evidence presented.

4. Discharge of Tax Liabilities by Deductee/Payee:
The assessee argued that they should not be treated as "assessee in default" because the deductee/payee had already discharged their tax liabilities and filed returns. The Tribunal noted that this contention required verification against the additional evidence provided and remitted the issue back to the AO for re-assessment.

5. Admission of Additional Evidence:
The Tribunal accepted the additional evidence submitted by the assessee under Rule 29 of the Income-Tax (Appellate Tribunal) Rules, 1963. It was determined that these documents were crucial for a fair adjudication of the issues, as they were not available to the lower authorities. The Tribunal emphasized the need for a thorough verification of these documents by the AO, thereby restoring the issues to the AO for a comprehensive re-evaluation.

Conclusion:
The Tribunal, after considering the arguments and additional evidence, decided to set aside the orders of the CIT(A) and remand the issues back to the AO for re-adjudication. The AO was instructed to provide the assessee with a reasonable opportunity to present their case and submit necessary evidence. Consequently, the appeals were partly allowed for statistical purposes, with the Tribunal emphasizing the need for a just and thorough examination of all relevant facts and evidence.

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