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2020 (12) TMI 1025 - AT - Income TaxTDS u/s 194H - Default u/ss. 201(1)/201(1A) - non deduction of tds - payment of dhami/commission by the assessee - HELD THAT - As the requisite purchase bills for A.Y. 2013-14 and A.Y. 2015-16 were not produced by the assessee, therefore, the ITO(TDS) had presumed that the assessee in the said years also must have paid dhami/commission of the same amount as in A.Y. 2014-15, de hors deduction of tax at source. We would mince no words in saying that we are unable to persuade ourselves to subscribe to the basis as per which the assessee had been held to be in default U/ss. 201(1)/201(1A) of the Act, in respect of a presumptive payment of dhami/commission by the assessee in A.Y. 2013-14 and A.Y. 2015-16 It is the claim of the Ld. A.R. that as the respective payees i.e. the dealers in wheat to whom the aforesaid sum had been paid/credited had taken into account the impugned sum of dhami/commission while computing their income in their returns of income filed under Sec. 139 for the captioned years under consideration, and have also paid the taxes on the income declared in such respective returns of income, therefore, the assessee cannot be treated as being in default as per the 'first proviso' to Sec. 201(1). Also, it has been stated by the Ld. A.R., that certificates from the accountant in the prescribed form i.e. 'Form No. 26A' verifying the aforesaid facts had been obtained by the assessee. On the basis of the aforesaid facts, we are of the considered view that the matter in all fairness requires to be restored to the file of the ITO(TDS) for verifying the veracity of the aforesaid claim of the assessee. In the course of the 'set aside' proceedings, the ITO(TDS) shall verify the maintainability of the claim of the assessee that now when the requisite conditions envisaged in the 'first proviso' to Sec. 201(1) of the Act had been complied on its part, it cannot be treated as being in default and consequentially be saddled with the liability U/ss. 201(1)/201(1A) of the Act. Before parting, we may herein clarify that the assessee shall in the course of the 'set aside' proceedings furnish the requisite details as would be called for by the ITO(TDS) for the purpose of giving effect to our aforesaid directions.
Issues Involved:
1. Legality and validity of the order passed by the ITO-TDS under Sections 201(1) and 201(1A) of the Income Tax Act, 1961. 2. Obligation of the assessee to deduct TDS under Section 194H on commission payments. 3. Presumption of commission payments for assessment years 2013-14 and 2015-16 based on the assessment year 2014-15. 4. Compliance with the 'first proviso' to Section 201(1) regarding the payees having paid taxes on the commission income. 5. Procedural delay in pronouncement of the order beyond the stipulated 90 days due to exceptional circumstances. Detailed Analysis: 1. Legality and Validity of the ITO-TDS Order: The assessee firm challenged the orders passed by the ITO-TDS, Amritsar, under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, arguing that the orders were against the facts and untenable in law. The CIT(A) upheld the ITO-TDS orders, which led to the assessee filing appeals for the assessment years 2013-14, 2014-15, and 2015-16. The Tribunal noted that the ITO-TDS had based its decision on the failure of the assessee to produce purchase bills for the assessment years 2013-14 and 2015-16 and had presumed the same commission payments as in the assessment year 2014-15. 2. Obligation to Deduct TDS under Section 194H: The core issue revolved around whether the assessee was obligated to deduct tax at source under Section 194H on the commission payments made during the purchase of wheat. The ITO-TDS observed that the assessee had paid commission (dhami) on wheat purchases without deducting TDS, which was admitted by a partner of the assessee firm during the survey proceedings. The assessee, however, contended that it had made outright purchases and that the commission mentioned in the invoices was between the supplier and the farmer, not affecting its transactions. 3. Presumption of Commission Payments for A.Y. 2013-14 and 2015-16: The ITO-TDS presumed that the assessee had made commission payments in the assessment years 2013-14 and 2015-16 similar to those in the assessment year 2014-15 due to the non-production of purchase bills. The Tribunal found this presumption unjustified and noted that the assessee should not be held in default based on presumptive payments without concrete evidence. 4. Compliance with 'First Proviso' to Section 201(1): The assessee argued that the respective dealers to whom the commission was paid had accounted for it in their income tax returns and paid the due taxes, thus the assessee should not be treated as in default under Section 201(1). The Tribunal acknowledged this claim and directed the ITO-TDS to verify the certificates (Form 26A) submitted by the assessee, which confirmed that the payees had included the commission in their income and paid the taxes. 5. Procedural Delay in Pronouncement of the Order: The Tribunal addressed the procedural issue of the delay in pronouncing the order beyond 90 days due to the COVID-19 lockdown. It referenced the ITAT Mumbai's decision in DCIT Vs. JSW Limited & Ors., which allowed for the exclusion of the lockdown period from the 90-day limit due to exceptional circumstances. The Tribunal agreed with this interpretation, noting that the lockdown period should be excluded when calculating the time limit for pronouncement of orders. Conclusion: The Tribunal allowed the appeals filed by the assessee for the assessment years 2013-14, 2014-15, and 2015-16 for statistical purposes. It directed the ITO-TDS to verify the assessee's claim regarding the payees having paid taxes on the commission income and to reassess the liability under Sections 201(1) and 201(1A) accordingly. The procedural delay in pronouncing the order was justified due to the exceptional circumstances of the COVID-19 lockdown.
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