9911796707
TMI Blog2015 (11) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 18% of remaining TDS (20% (-) 2%) has been demanded from the assessee. Had the assessee been provided an opportunity as per the proviso of subsection (1) of section 201 of the Act referred abve then it may have filed requisite details of the deductee in form of proof of furnishing of return under section 139 of the Act, proof of taking into account such sum for computing income in such return of income of the deductee, proof of tax paid by the deductee and certificate from the Chartered Accountant to this effect that the sum on which deductor was required to deduct TDS has duly been considered in the books of account for computing income of the deductee. Therefore, we accept the second fold of contention of the assessee and hold that the matter may be restored back to the file of CIT(A) with the direction to decide the matter after providing reasonable opportunity of hearing to the assessee so that it can furnish relevant details/information as required by the above said proviso to sec.201(1) of the Act, as discussed above. - Decided in favour of assessee for statistical purposes. - ITA No.1984, 1985, 1986 /Ahd/2015 - - - Dated:- 23-11-2015 - Shri Rajpal Yadav, JM, Manish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted. 2. Without prejudice to the preceding ground, the ld. CIT(A) ought to have directed the Dy. CIT, Centralized Processing Cell-TDS, to verify whether the deductee had furnished its return of income after including the amount paid to it by the appellant and paid the tax due and, if so, to not treat the appellant as an assessee in default in view of the Hon ble Supreme Court s judgment in the case of Hindustan Coca Cola Beverage (P) Ltd. vs. CIT 293 ITR 226, and the proviso to sub-section (1) of section 201, inserted by the Finance Act, 2012 w.e.f. 01.07.2012. 3. The appellant craves permission to add, alter, amend, substitute, delete, and/or modify any ground(s) of appeal before or at the time of hearing. 4. Briefly stated facts are that the appellant-assessee i.e. O.N.G.C. Ltd. is a Public Sector Undertaking and approximately 69% of shares are held by the Government of India and the appellant has been calculating, deducting and depositing income deducted at source as per the provisions of Income-tax Act, 1961 (hereinafter referred to as the Act). 5. During quarters 1, 2 3 of F.Y. 2013-14 assessee deducted tax at source from one of the contractors namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C Ltd. has been regularly deducting and depositing the tax deducted at source and filing its TDS returns regularly and looking to the size of appellant s business there are thousands of deductees of whom the assessee is deducting tax and depositing the same to the Government. The rate of tax prescribed for deduction from payments to contractor i.e. GETCO Ltd. was 2% and the same was duly deducted and deposited but in the TDS return at the place of correct PAN of GETCO Ltd. it was AABCG 4029 R, inadvertently mentioned as AABCG 2412F and due to this small clerical mistake which was done on the part of assessee, differential TDS of 18% was imposed. The ld. AR further submitted that the correction statement was filed to make the correction in the PAN detail but to its surprise due to the internal policy of the Centralized Processing Cell which are not available in the Act and the Rules, the revised PAN details were not accepted as there was change in four numerical characters and one alfa character, whereas the system only allows changes of two alfa characters and two numerical characters. This sort of processing by TDS Centralized Processing Cell of allowing correction upto 4 charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed] Provided [further] that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax.] [(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,- (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the quarterly TDS statement of form no.26Q. The deductee i.e. GETCO Ltd. was holding and possessing valid PAN i.e. AABCG 4029R and regularly filing income-tax return and paying due taxes. However, due to internal processing guidelines between the Income-tax Department and the Centralized Processing Cell which allow rectification of PAN only to the extent f two alfa and two numerical characters but the assessee s correction statement could not bring down the demand because there was change in four numerical characters and one alfa character and for this reason the demand has been created in all the quarters 1, 2 3 of F.Y 2013-14. 11. Before going further let us examine the intention of the Legislature in regard to insertion of provisions relating to tax deduction/collection at source. Through these provisions the duty and responsibility is casted upon certain categories of assessees, to deduct/collect tax on certain types of sum paid/purchases from deductees for the reasons that such deductee either may not file income tax return or may not disclose the actual income or may not/delay in depositing income-tax. As per provisions of the Act deductor is further requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned. The basic reason due to which ld. CIT(A) could not bring any relief to the assessee was due to application of provisions of section 206AA which refers to furnish PAN and this section was introduced w.e.f 1st April, 2010 and reads as below :- 206AA. Requirement to furnish Permanent Account Number.-(1) Notwithstanding anything contained in any other provisions of this Act, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall furnish his Permanent Account Number to the person responsible for deducting such tax (hereafter referred to as deductor), failing which tax shall be deducted at the higher of the following rates, namely:- (i) at the rate specified in the relevant provision of this Act; or (ii) at the rate or rates in force; or (iii) at the rate of twenty per cent. (2) No declaration under sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A shall be valid unless the person furnishes his Permanent Account Number in such declaration. (3) In case any declaration becomes invalid under sub-section (2), the deductor shall deduct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and processing of TDS returns. This scheme discusses about furnishing of correction statement of tax deducted at source, processing of statement and rectification of mistake and the relevant portion of this scheme in this regard are mentioned herein below :- Furnishing of correction statement of tax deducted at source 4. (1) A deductor shall furnish the correction statement of tax deducted at source in the form specified by the Director General- (a) at the authorised agency through electronic mode; or (b) online through the portal. (2) The correction statement referred to in sub-paragraph (1) shall be furnished under digital signature or verified through a process in accordance with the procedure, formats, and standards specified by the Director General. Processing of statements 5. (1) The Cell shall process the statement of tax deducted at source furnished by a deductor in the manner specified under sub-section (1) of section 200A of the Act after taking into account the information contained in the correction statement of tax deducted at source, if any, furnished by the deductor before the date of processing. (2) The Commissioner may- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of the system being appraised by the Director General and authorised agencies. 14. This scheme of Centralized Processing of statement of TDS clearly gives an option to the deductor to correct the quarterly return(s) filed by it and this correction has not been restricted to any particular correction. Therefore, correction can be made by way of deleting the entry, adding of a deductee, change in details mentioned about the deductee including his PAN, adding of TDS challans etc. meaning thereby that deductor can rectify any kind of mistake which has been inadvertently made by it at the time of filing original return and also this correction statement can also be filed for multiple times. Applying the facts of the case of assessee to the above discussion made by us we are of a clear view that refusal of the various agencies not to accept change in character in PAN details filed by deductee in its correction statement was not correct and justifiable. So much so that the deductee should be given further opportunity of filing the correction statement to the correct PAN details which needs to be accepted. Even from the perusal of the intimation under section 200A issued by TDS Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deductees t the assessee. The assessee had rectified the mistake by furnishing the correct PAN as soon as it came to its notice. The revised PAN and the revised statement were accordingly filed. Following findings recorded by the Tribunal may be read :- 6. In the instant case, the only question before us is whether there was reasonable cause for alleged failure on the part of the assessee. In the instant case, the ITO (TDS) while going through the quarterly return in form no.26Q filed by the assessee noted that it has omitted to quote PAN/had quoted invalid PAN in 196 cases. As regards the reasonable cause, it was pleaded on behalf of the assessee that TDS was deducted and deposited in time in government Treasury. The default is only with regard to the wrong quoting of PAN of 196 of the deductees, such deductees quoted wrong PAN. However, correct PAN was given as soon as default was brought to the notice of the assessee. In this case, the CIT(A) has categorically observed that the assessee deducted TDS correctly and revised PAN and filed the revised statement on form no.26G, hence there was sufficient compliance of the provisions of section 139A. There is no dispute that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w we take up the issue in the light of second fold of contention of the ld. AR of assessee which refers to the application of proviso to sub-section (1) of section 201 of the Act. Even if we we have already allowed the appeal with reference to the ld. AR first fold of contention, we now examine the applicability of second fold of contention. For reference we again mention below the proviso to subsection (1) of section 201- 201. [(1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: [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 credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
