2023 (8) TMI 226 - HC - Income Tax

Demand u/s 201(1)/201(1A) - demand notice issued u/s 156 - petitioner ought to have deducted tax at source u/s 194I - HELD THAT - As revenue, cannot but accept that the impugned order cannot be sustained, having regard to the judgment rendered in DLF Homes Panchkula Pvt. Ltd 2023 (4) TMI 399 - DELHI HIGH COURT . Having regard to the aforesaid, the impugned order and the demand notice are quashed.

Summary

Issues Involved:
The issues involved in the judgment are challenge to the order u/s 201(1)/201(1A) of the Income Tax Act, 1961 for Financial Year 2015-16 and challenge to the demand notice issued u/s 156 of the Act.

Challenge to Order u/s 201(1)/201(1A) of the Income Tax Act, 1961:
The petitioner challenged the order dated 31.01.2023 passed under Section 201(1)/201(1A) of the Income Tax Act, 1961. The impugned order proceeded on the basis that the petitioner should have deducted tax at source as per the provisions of Section 194I of the Act. The order was quashed by the court as it could not be sustained, citing a judgment by a coordinate bench of the court in a similar case.

Challenge to Demand Notice u/s 156 of the Income Tax Act, 1961:
Apart from challenging the order u/s 201(1)/201(1A) of the Act, the petitioner also challenged the demand notice dated 31.01.2023 issued under Section 156 of the Act. The court, after considering the arguments, quashed both the impugned order and the demand notice.

Conclusion:
The High Court of Delhi, comprising HON'BLE MR. JUSTICE RAJIV SHAKDHER and HON'BLE MR. JUSTICE GIRISH KATHPALIA, disposed of the writ petition in favor of the petitioner. The impugned order and demand notice were quashed as they were found unsustainable based on the legal precedents. Pending applications were closed, and the parties were directed to act based on the digitally signed copy of the order.