9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 164 - AT - Income TaxTDS u/s 192 - Contribution towards PF - short deduction of TDS - allowability of deduction u/s. 80C(2) of Act for contributions to PF - assessee had failed to deduct TDS on salary payments - contribution towards PF constituted u/s. 61 of the Kerala Co-operative Societies Act 1969 is a statutory PF - as per AO notification/document was produced by Assessee nor any documents were produced to show that PF satisfies the other conditions mentioned in Sec. 80C(2) - HELD THAT - The assessee has explained before us that on bonafide belief that contribution towards PF maintained by assessee which falls in category of statutory PF as per section 2(e) of PF Act, 1925 and deducted the sum while computing deduction of TDS on salary of the employees that resulted in short deduction of TDS and there was malafide intention. Because of considering the contribution to PF maintained by the assessee, there was wrong estimation of the salary of its employees. That was resulted in short deduction of TDS and in our opinion, the explanation given by the assessee is bonafide. As such, holding the assessee in default u/s. 201(1) of the Act is unwarranted, thereby including provisions of section 201(1) 201(1A) of the Act is also unwarranted. See MAHATMA GANDHI UNIVERSITY AND (VICE-VERSA) 2019 (5) TMI 1373 - ITAT COCHIN Thus short deduction of TDS is bonafide and invoking provisions of section 201 of the Act is unjustified - Decided in favour of assessee.
Issues involved:
1. Deductibility of contribution towards PF under Section 80C. 2. Tax liability on the concerned party for non-deduction of TDS. 3. Treatment of appellant as assessee in default under Section 201. 4. Eligibility of interest paid by staff towards housing loan for deduction. Analysis: Issue 1: Deductibility of contribution towards PF under Section 80C: The appellant contended that the contribution towards PF constituted under the Kerala Co-operative Societies Act 1969 is a statutory PF eligible for deduction under Section 80C of the Income Tax Act, 1961. However, the Assessing Officer did not accept this claim as no evidence was provided to establish the PF fund's eligibility as a statutory Provident Fund. Consequently, the AO disallowed the deductions claimed under Section 80C, leading to a shortfall in TDS. The appellant argued that the contribution to PF was made in good faith based on the belief that it qualified for deduction. The Tribunal, citing precedents, held that the appellant's explanation was bona fide, and therefore, the provisions of Section 201(1) and 201(1A) were deemed unwarranted. Issue 2: Tax liability on the concerned party for non-deduction of TDS: The AO found discrepancies in the TDS provisions during a survey conducted under Section 133A(2A) of the Income-tax Act, 1961. The appellant failed to deduct TDS on certain payments, resulting in a shortfall. The AO treated the appellant as an assessee in default under Section 201(1) for the unpaid TDS amount. However, the Tribunal, based on the appellant's explanation of a genuine belief in the deductibility of the contributions, held that the appellant should not be considered in default, and the tax liability should lie with the concerned individuals rather than the appellant. Issue 3: Treatment of appellant as assessee in default under Section 201: The Tribunal emphasized that the appellant's failure to deduct TDS was not deliberate but based on a misinterpretation of the PF contributions' deductibility. Relying on previous judgments, the Tribunal concluded that the appellant's actions were in good faith, and therefore, holding the appellant in default under Section 201 was unjustified. Issue 4: Eligibility of interest paid by staff towards housing loan for deduction: The AO noted discrepancies in the verification of interest paid by employees on housing loans for deduction purposes. The Tribunal highlighted the importance of verifying the genuineness and admissibility of such deductions. However, the final decision did not directly address this issue, as the Tribunal's focus was on the appellant's bona fide belief regarding the PF contributions and the subsequent tax liabilities. In conclusion, the Tribunal partly allowed the appeals filed by the assessee, emphasizing the bona fide nature of the appellant's actions in relation to the TDS deductions and contributions towards PF. The stay petitions filed by the assessee were dismissed as infructuous.
|
