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TMI Blog2022 (4) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... The Memorandum explaining amendment made to Section 40(a)(i) and section 201 of the Act by Finance (No.2) Bill, 2019 explains that amendment is to remove anomaly and the rationally of amendment. Second proviso to Section 40(a)(i) has been inserted w.e.f. 01.04.2020 and provide that where assessee fails to deduct the whole or any part of the tax in accordance with the provisions of chapter XVII - B on any such sum but is not deemed to be an assessee in default under the first proviso to Section 201(1) then it shall be deemed that the assessee has deducted and paid the taxes on such sum on the date of furnishing of return of income by the payee referred to in the said proviso. As per proviso to Section 201(1), a payee shall not be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details / documents in support of its claim under second proviso to Sec.40(a)(i) read with proviso to Sec.201(1). The Ld. AO may compute interest, as applicable, in accordance with law. - ITA No.2821/Chny/2018 - - - Dated:- 20-4-2022 - Hon ble Shri Mahavir Singh, Vice President And Hon ble Shri Manoj Kumar Aggarwal, Am For the Appellant : Shri S. Sridhar (Advocate) Shri. N. Arjunraj (CA) Ld. ARs For the Respondent : Shri P. Sajit Kumar (JCIT) Ld. Sr. DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of the order passed by the learned Commissioner of Income Tax (Appeals)-16, Chennai [CIT(A)] dated 14.08.2018 in the matter of an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue. Therefore, a demand was raised against the assessee for interest of ₹ 36.90 Lacs u/s 201(1A). However, Ld. AO did not raise a demand of ₹ 57.66 Lacs, being the amount of tax default @20% u/s 201(1). 4. The Ld. CIT(A) noted the mistake of Ld. AO and issued enhancement notice to the assessee. The assessee submitted that the transaction was completed during financial year 2009-10 itself relevant to AY 2010-11. However, the property was registered during this assessment year and accordingly, the income was assessed in the hands of the seller in this year only vide order dated 30.03.2015. In further appeal by seller, Tribunal had restored the matter back to the file of Ld. AO for fresh adjudication. In the above backgrou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Act by Finance (No.2) Bill, 2019 explains that amendment is to remove anomaly and the rationally of amendment is stated to be as follows: - Relaxing the provisions of sections 201 and 40 of the Act in case of payments to non-residents Section 201 of the Act provides that where any person, including the principal officer of a company or an employer (hereinafter called 'the deductor'), who is required to deduct tax at source on any sum in accordance with the provisions of the Act, does not deduct or does not pay such tax or fails to pay such tax after making the deduction, then such person shall be deemed to be an assessee in default in respect of such tax. The first proviso to sub-section (1) of section 201 specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of the return of income by the payee referred to in that proviso. Thus, there will be no disallowance under section 40 in respect of such payments. This amendment will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years. [Clause 10] Upon perusal of the same, we find that the second proviso to Section 40(a)(i) has been inserted w.e.f. 01.04.2020 and provide that where assessee fails to deduct the whole or any part of the tax in accordance with the provisions of chapter XVII - B on any such sum but is not deemed to be an assessee in default under the first provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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