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TMI Blog2015 (4) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... A) has correctly decided the issue because if an organization is exempted then same is not liable to tax and therefore there is no need for deduction of tax. Therefore we find nothing wrong in the order of Ld. CIT(A) and confirm the same. Non TDS on interest paid to PEC University of Technology (Pension Fund Trust) - Held that:- The scheme of the provisions for deduction of tax at source applied not only to the amount paid, which bears the character of “income”, such as salaries, dividends, interest on securities, etc., but also to gross sums, the whole of which may not be income or profits in the hands of the recipient, such as payment to contractors or sub-contractors. The purpose of the provisions for deduction of tax at source in Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Ld. CIT(A) has erred in deleting the addition made on account of interest paid on FDR s without deduction of tax at source (TDS) u/s 194A. 2. That during the relevant period of time, the assessee bank had no documentary evidence in the form of Lower Deduction Certificate u/s 197 etc. on the basis of which the bank came ot the conclusion that there was no requirement of deduction of tax, as required u/s 194A of the I.T. Act. 1961. 3. After hearing both the parties we find that a survey / TDS inspection was conducted in the premises of assessee and it was noted that interest has been paid to the following parties: (i) Director, PEC University of Technology, Chandigarh (Salary Account) (ii) Director, PEC University ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PEC University of Technology (Pension Fund Trust) the assessee has also applied for exemption under section 10(23AAA). (iv) In case of Punjab Infrastructure Development Board assessee has been notified under section 10(23C)(iv) so the total income was exempted. In case of three individuals whom commission was paid for daily collection the same was treated as salary income and tax deducted accordingly, in view of the clarification issued by the Central Board of Direct Taxes. It was further submitted that if no tax was due then interest could not be charged and in this regard Reliance was placed on the decision of Hon ble ITAT, Chandigarh in case of M/s. Q.C. Residential (P) Ltd. in ITA No. 1286/Chd/2012. 6. The Ld. CIT(A) conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) has correctly decided the issue because if an organization is exempted then same is not liable to tax and therefore there is no need for deduction of tax. Therefore we find nothing wrong in the order of Ld. CIT(A) and confirm the same. 10. In the result appeal of the Revenue is dismissed. ITA No. 14/Chd/2015 11. In this appeal assessee has raised following grounds: 1. That on the facts and in circumstances of the case and in law, the impugned order is contrary to law and facts of the case. 2. Violation of principles of natural justice: That on the fact and in the circumstances of the case and in law, the Ld. CIT(A) was not justified to negate the contention of the appellant that principles of natural justice were gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above noted paras and the Ld. CIT (A) has decided the same which is as under: 5.2 PEC University of Technology (Pension Fund Trust) is not exempt from tax u/s 10(23AAA) as on date, and so tax was required to be deducted on interest paid to this person. 5.3 In view of the above discussion, PR is to be treated as assessee in default in respect of the payment made to PEC University of Technology (Pension Fund Trust). Therefore, the demand created u/s 201(1)/1A) of ₹ 12,56,023/- in respect of interest payment to PEC University of Technology (Pension Fund Trust) is confirmed and the appellant gets relief of rest of the demand of ₹ 62,46,541/-(75,02,564 12,56,023). 12. Before us Ld. Counsel for the assessee submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II-B of the Income-tax Act, 1961, is to see that from the sum which is chargeable under section 4 for levy and collection of income-tax, the payer should deduct tax thereon at the rates in force, if the amount is to be paid to a non-resident. They are meant for tentative deduction of income-tax subject to regular assessment. Thus from above it is clear that normally a person making payment is required to deduct the tax as per the provisions of the Act because this is a tentative deduction. The case of Jagran Prakashan Ltd. Vs. DCIT (supra) is also distinguishable on facts because in that case the issue was whether trade discount allowed by the publisher of news paper to advertising agency was not a discount and whether tax is deductib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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