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TMI Blog2023 (2) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... main thrust of sub-section 1A of section 206C thus is to make a declaration as prescribed, upon which, the liability to collect tax at source under sub-section (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere minor delay in filing the said declaration would not defeat the very claim. The Tribunal therefore, viewed such delay liberally and in essence held that there was substantial compliance with the requirement of filing the declaration - Decided against revenue. - ITA No. 15 /JPR/2023 ITA No.16 /JPR/2023 - - - Dated:- 20-2-2023 - DR. S. SEETHALAKSHMI , JM And SHRI RATHOD KAMLESH JAYANTBHAI , AM For the Revenue : Sh. Jadish ( JCIT ) For the Assesseeby : Sh. Neeraj Jain ( C. A. ) ORDER PER : RATHOD KAMLESH JAYANTBHAI , AM These are two appeals filed by the revenue aggrieved from the order of the National Faceless Appeal Centre, Delhi (herein after referred as ld. NFAC/ ld. CIT(A) ) for the assessment years 2018-19 2019-20 dated 23.11.2022, which in turn arises from the order passed by the Income Tax Officer(TDS), Kota pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of case, the Ld. CIT(A), NFAC, Delhi has erred in accepting the additional evidence in Form 26A (a certificate from an Accountant as required under the 1st proviso of section u/s 201(1) of the IT Act 1961) which had not stood the test of enquires in assessment proceedings u/s 201(1) and 201(IA) of the Income Tax Act 1961. 6. The facts as culled out from the records is that the assessee is a State Government Agency. The AO conducted spot verification at the office premises of Additional Chief Engineer, Zila Parishad, Sawaimadhopur on 12.06.2019. During the verification, the AO noticed that the appellant paid interest of Rs. 5,22,15,920/- during the financial year 2017-18 relevant to assessment year 2018-19 and had not deducted the TDS on the above interest paid to HUDCO. The AO computed short deduction u/s 201(1) and interest u/s 201(1A) amounting to Rs. 52,21,592/- and Rs. 11,80,483/- respectively totaling to Rs. 64,02,075/-. 7. Being aggrieved, from the order of the ITO, TDS the assessee carried the matter in appeal before the ld CIT(A) and ld. CIT(A) after hearing the parties given his relevant findings on the issue, which reads are as under:- 52. The order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1) and charge interest u/s.201(1A) for the default, as per the provisions of Section 201(1A), Hence, the Ground No. 1 is partly allowed. 6. Ground No.2 relate to raising demand of Rs.1,492 for nondeduction of tax at source u/s.194C and Rs.298 charging of interest u/s.201(1A). The appellant deductor failed to deduct tax at source u/s.194C on the payment of Rs.74,593/- made to Rajasthan Patrika Pvt Ltd. The AO treated the appellant deductor as assessee in default for non-deduction of tax at source on the payment made to the above entity and raised the demand u/s.201(1) Rs.1,492/- and u/s.201(1A) Rs.298. The appellant submitted that in connection with demand raised under section 156, it had paid the demand on 09.08.2019 within the designated 30 days. Since the demand raised by the AO was paid after passing the order u/s.201(1)/201(1A), the demand cannot be deleted but the AO can reduce the demand to that effect as tax paid in compliance to demand notice u/s. 156. Hence the Ground No.2 is dismissed. 8. Revenue aggrieved from the order of the ld. NFAC has carried the matter before us on the grounds as raised in para 5 above. To support the grounds taken by the revenue the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest thereon 298 total Rs. 1,790. Thus, the total demand of Rs. 6403865 was raised while passing the order u/s 201(1)201(1A) on dated 15.07.2019. Ground No.1 That under the facts and circumstances of the case, the learned Assessing Officer has erred in raising the TDS liabilities on Interest payment to Housing and Urban Development Corporation Ltd. Jaipur (HUDCO) during the F.Y. 2017-18 of Rs.52,21,592 and further erred in charging the interest thereon of Rs. 11,80,483 total Rs.64,02,075 while passing the order u/s 201(1) and 201(1A) of the Income Tax Act. The appellant Zila Parishad is a government department and regular in compliance requirements under the Income-tax Act, 1961. The appellant has paid the interest of Rs. 5,22,15,920 during the financial year 2017-18. The appellant has not deducted the TDS on the above interest as the payment was made to HUDCO as it was the Public Sector Undertaking and 100% shares were held by the President of India through the then Ministry of Housing Urban Poverty Alleviation, which was exempt from TDS on Interest other than interest on securities u/s 194A of the Income-tax Act, 1961. However, vide letter No. 220 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 201 of the Income-tax Act, 1961 wherein it has been certified that HUDCO has already paid the tax on the interest income received for the financial year 2017-18 (enclosed as Annexure-2). Further, it shall be noted HUDCO being the recipient of the interest income has already paid the tax due on the income. The appellant did not raise any dispute about it being the assessee in default however, tax due has been recovered from it by the department and therefore, no further tax could have been collected from the appellant. The contention was that since the tax to be recovered by the department on the income has already been paid by the HUDCO, no further tax should be recovered from the appellant on the same income. The recovery could not once again be made from the tax deductor where the payee included the income on which tax was alleged to have been short deducted in its taxable income and paid taxes thereon. Furthermore, as per the Circular No. 275/201/95- IT(B) dated 29.1.1997 issued by the Central Board of Direct Taxes, in our considered opinion, should put end to the controversy. The circular declares no demand visualized under Section 201 (1) of the Incometax Act s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In addition to the above submission the ld. AR of the assessee submitted that the required form 26Abeing the certificate of chartered accountant as per sub-section 1 of section 201 of the Act, could not be submitted before the assessing officer because the order has been passed before the relevant due date of filling the ITR and the assessee has requested the assessing officer to keep the proceeding pending till the HUDCO file the ITR and give the relevant certificate in form no. 26A, from where in the relevant details required in the form can be filed up but the since the order has been passed without giving the time to the assessee as requested, assessee has no option but to file the said form no 26A before the ld. CIT(A) and the same was not filed before the ld. AO. The ld. AR of the assessee relied upon the order of Hon ble Supreme Court in case of Hindustan Coca-cola Beverages Pvt. Ltd 293 ITR 226 contending that when the tax due has already been paid by the receipt the same cannot be recovered by the assessee. Based on that arguments the appeal of the assessee has rightly been allowed by the NFAC and therefore, the appeal of the revenue merely the form was not filed with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section 1 would not be made, if the buyer furnishes to the person responsible for the tax a declaration in writing in prescribed form declaring that the goods in question are to be utilized for the purposes of manufacturing process or producing articles or things or for the purpose of generation of power and not for trading purposes. The declaration to be made in sub-section (1A) of section 206C thus would enable the Revenue authorities to, as and when the need so arises make proper verifications. This sub-section itself does not provide for any time limit within which, such declaration is to be made. The time limit, of course, would be found in Rule 37C of Income Tax Rules, 1962. The main thrust of sub-section 1A of section 206C thus is to make a declaration as prescribed, upon which, the liability to collect tax at source under sub-section (1) would not apply. When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere minor delay in filing the said declaration would not defeat the very claim. The Tribunal therefore, viewed such delay liberally and in essence held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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