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TMI Blog2019 (3) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... es as per that certificate as provided u/s 197 clause (2) of the Act. We further find the learned CIT(A) is absolutely silent upon the applicability of section 197 where he has not at all adjudicated on merits with regard to why in all cases of deduction only 194I will be applicable. The learned CIT(A) has summarily accepted the version of the Income Tax Officer (TDS). The assessee has deducted TDS as per the direction of the Department in form of section 197 certificate issued by the revenue authorities. It is not disputed by the Department. The relevant returns have already been filed. There is no default in paying of taxes and 6 therefore, there is no loss to the Revenue. Even the deductee has filed their returns and the tax effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, Ld. CIT(A) erred in holding the entire amount paid / credited as per Form 16A issued to Bihar State Warehousing Corporation as rent thus holding that such entire amount is subjected to TDS u/s 194I ignoring the fact that amount paid/credited to Bihar State Warehousing Corporation included rake handling charges handling transportation charges which could be subjected to TDS u/s 194C and not under section 194I. Ground No. 12: On the facts and circumstances of the case and in law Ld. CIT(A) erred in holding that the rent so paid to Bihar State Warehousing Corporation was subject to TDS u/s 194I at the rate under that section ignoring the fact that there was an order u/s 197 issued by the ACIT(TDS), Patna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication made by Bihar State Warehousing Corporation u/s 197(1) of the Act for deduction of TDS @5% in case of payment of rent u/s 194I and @0.5% in case of payment by way of contracts. There is no dispute for this year. The Department has accepted the TDS deducted for the assessment year 2007-08. The only issue has cropped up for assessment year 2008-09 and 2009-10 on the basis of certificate issued to the assessee, the tax was deducted from the payments to Bihar State Warehousing Corporation towards rent of warehouse u/s 194I and towards contract receipt on account of handling and transportation charges and rake handling charges u/s 194C of the Act as under: Nature of payments: F.Y. 2007-08/ A.Y. 2008-09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deductee had paid all taxes as per its return of income (copy of assessment order annexed as A-8 in the paper book) and also despite the fact that specific rates of deduction mentioned in that certificate, the Income Tax Officer (TDS) held the assessee in default for tax u/s 201(1) in regard to short deduction of tax on the entire payments made to Bihar State Warehousing Corporation on the presumed liability u/s 194I of the Act and charged consequential interest. Since according to the ITO (TDS) all the payments including handling and transport charges and rake handling charges on account of rent liable for TDS deduction u/s 194I regardless of its treatment as contract receipts liable to TDS u/s 194C as per certificate u/s 197 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the Act, it authorizes the Assessing Officer to prescribe deduction of TDS at any lower rate provided the facts and circumstances justify such deduction. Clause (2) of section 197 of the Act further states that when such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income tax at the rates specified in such certificate or deduct no tax, as the case may be. In this case of the assessee, we find in the paper book a chart is annexed where the assessee has deducted the rates as provided to them by the certificate issued by the revenue authorities u/s 197 of the Act. The relevant certificate for assessment year 2008-09 and 2009-10 are annexed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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