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TMI Blog2014 (12) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... wance ought to have been made under section 40(a)(ia) of the Act. In the instant case no tax was deductible at source under section 194-I read with section 204 comprised in Chapter XVII-B from the rent paid by the assessee to KPT. This is because such rent was not to be included in the total income of the KPT and was, therefore, not chargeable under the provisions of the Act. In the case law referred by Ld. Sr. DR the fact relating to the claim of exemption of the income of KPT was not before Tribunal or that issue was not raised but in the instant case, KPT was not required to pay any tax and in turn cannot be treated to be in default within the meaning of section 201(1). Accordingly, we are of the view that no disallowance ought to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(ia) of the Act. Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of AO. Aggrieved, now assessee is in second appeal before ITAT. 4. We have heard rival submissions and gone through facts and circumstances of the case. Facts are admitted and no dispute on the same. Before us, Ld. Sr. Advocate Shri J. P. Khaitan argued that the assessee has paid rent to KPT, which is a Public Charitable Trust registered u/s. 12AA of the Act. His first argument is that income of Public Charitable Trust registered u/s. 12AA of the Act is exempt and once the income is exempted, assessee is not liable to TDS. We find from the order of Tribunal dated June, 8, 2007 passed in ITA No. 2011/Kol/2006 in the case of Kolkata Port T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Section 11 under which Kolkata Port Trust was assessed, inter alia, for the assessment year 2007-08 falls under Chapter III of the Act for incomes which do not form part of total income . We find that when income is not to be included in the total income, it is without a doubt, not chargeable under the provisions of the Act. In view of the above, we here referred to Section 2(45) of the Act, which defines total income and to mean the total amount of income referred to in section 5, computed in the manner laid down in the Act. Section 4 is the charging section and provides for levy of income tax on the total income, whereas, Section 5 lays down the scope of total income. Both sub-sections (1) and (2) of Section 5 of the Act start wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct tax would arise only when the amount is sum chargeable under the provisions of this Act , whether the payee is a resident or non-resident. In respect of payments to residents, each of the provisions requiring tax deduction at source including section 194-I has to be read in conjunction with section 204 and no tax is required to be deducted if the amount payable is not chargeable under the provisions of the Act. The case of payment to a non-resident was considered by the Hon'ble Supreme Court in GE India Technology Centre P. Ltd.v CIT, (2010) 327 ITR 456 (SC), where it was held that provisions relating to tax deduction at source applied only to those sums which were chargeable to tax under the Act. The said case dealt with section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 40(a)(ia) of the Act. But, Ld. Senior DR, Shri Amitava Roy relied on this Tribunal s order of B Bench in ITA No.1091/Kol/2012 dated 14-10-2014 for the AY 2009-10 in the case of ACIT v. Hitech Logistics Ltd. wherein exactly the similar facts were there and the same party that KPT was the recipient of rent without the deduction of TDS and Hon'ble Bench decided the issue vide para-4 of its order as under:- 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the CIT(A) has deleted the disallowance for the reason that the payments made to Kolkata Port Trust do not attract the TDS provision. For this, he observed that I find that the Kolkata Port Trust is under the Ministry of Surfac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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