9911796707
TMI Blog2013 (11) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed by the assessee challenging the demand raised u/s. 201 & 201(IA) of the Act. 3. The facts relating to the same, which are common in all the three years, are stated in brief. The assessee-Society was started to run a medical college at a place called Pariyaram. It is pertinent to note that the assessee- society is not registered u/s. 12A of the Act. Since it could not invest funds for establishment of a full-fledged hospital, another body by the name Kerala State Co-operative Hospital Complex and Advanced Medical Sciences Ltd. (KCHC Ltd.), a society registered under the Kerala State Co-operative Society Act established full infrastructural facilities including class rooms, furnitures, laboratory equipments, medical equipments etc., along with 500-bed super speciality hospital. These facilities were given to the assessee herein and accordingly it got affiliation from the Medical Council of India for running the medical college. The assessee took possession of class rooms for running the medical college. However, the hospital infrastructure and other the allied services remained with KCHC Ltd., which run the hospital. But the assessee was allowed to have access to the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment years 2008-09 and 2009-10. In both these years, the Assessing Officer held that the income of the assessee is assessable as income from business, since the assessee is not registered as charitable institution u/s. 12A of the Act and further the assessee is seen collecting fees. Accordingly, the Assessing Officer assessed the income of the assessee under the hear income from business. While computing the income for assessment year 2008-09, the Assessing Officer made disallowances u/s. 40((a)(ia) for failure to deduct tax at source and also made disallowance 40A(3) of the Act. In assessment year 2009-10, the AO made disallowance u/s 40(a)(ia) of the Act, disallowance of sundry debtors written off disallowed and disallowance of difference in the account of KCHC Ltd. In both the years, the AO noticed that the assessee did not account for the accrued interest on the bank deposits. Hence the AO assessed the accrued interest in both the years. 7. In the appellate proceedings, the Ld CIT(A) confirmed the orders passed by the AO u/s 201 of the Act and also confirmed the interest charged u/s 201(1A) of the Act. In the quantum assessments, the Ld CIT(A) confirmed the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cut on 31-03-2011. Both the assessee as well as KCHC Ltd. has submitted petitions before the Central Board of Direct Taxes seeking CBDT to condone the delay - in filing the application for registration u/s. 12A of the Act by the assessee and also in filing of income tax returns by KCHC Ltd. Accordingly, he prayed that the impugned appeals may be kept pending till the disposal of applications by the CBDT. 11. The Ld Counsel also submitted the following arguments:- "1. Finance Act 2012 has inserted the following in Sec. 201(1) of the IT Act, 1961. "Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident:- (i) has furnished his return of income u/s. 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect on the present appeals. With regard to the claim of filing of returns of income by KCHC, the Ld D.R submitted that the same has been belatedly and hence they cannot be considered as returns of income filed u/s 139 of the Act. Accordingly she submitted that the amendments brought out by Finance Act 2012 in sec. 201 as well as in sec. 40(a)(ia) shall not apply to the assessee. 13. We have heard the rival contentions and carefully perused the record. Admittedly, the assessee is liable to pay a lease rent of Rs.6.50 lakhs in each of the three years under consideration to KCHC. Though assessee is splitting up the said payment in two main categories viz., payment for use of assets by taking possession of the same and the payment towards use of hospital facilities, in our view, also such a split up may not come to the help of the assessee. Ultimately the liability to make payment arises only on account of use of assets belonging to some other person and hence, in our view, the entire amount of Rs.6.50 crores will fall under the category of rent only. Further, the provisions of sec. 94I are very clear that the TDS liability is not dependent upon actual payment of rent. Hence the p ..... 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