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TMI Blog2024 (8) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 - ITAT BANGALORE] CIT(A) passed the appellate orders for AY 2014-15 to AY 2017-18 by holding that once the assessee has deducted TDS in subsequent year, the demand u/s. 201(1) cannot be raised and further interest u/s. 201(1A) only can be charged upto the date of deduction and where party is not known, or where transactions have been reversed / cancelled, TDS provisions are not applicable. Hence, CIT(A) has rightly granted the relief to the assessee in as much as the question of TDS payment was concerned and directed the AO to verify the facts and calculate interest upto the date of deduction, which does not need any interference - Appeals filed by the Revenue are dismissed. - Shri Shamim Yahya, Accountant Member, And Shri Sudhir Pareek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act were initiated by the AO. The Assessing Officer in his order has held that the assessee was required to deduct TDS on the provisions made in the books of accounts. It was submitted by the assessee that the provisions were created as per accrual basis of accounting and were therefore reversed in the subsequent assessment year. The TDS compliance was done on such expenses when the actual invoices were booked in the next year. The assessee duly disallowed the expenses in its income tax return in the year provision was made and claimed it as a deduction in the next year. However, the AO passed the orders u/s. 201(1)/201(1A) raising demand for TDS as well as interest upto the date of order as under:- Assessment Years Demand u/s. 201(1) (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the Assessee at the outset brought to our notice that pending disposal of the appeals, the Assessee had furnished before the AO, details regarding the actual payment of TDS in subsequent financial year, on the provisions made in the various financial years. These details were verified by the A. The AO has addressed a letter to the DR in which the AO after verification has found that the Assessee had deducted tax at source at the time when the provision made in one financial year is subsequently reversed and the expense booked in the subsequent financial year... The following are the contents of the said letter (copy filed by DR in Court), in so far as it relates to taxes deductible at source. 3. During the course of appellate pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the IT Act and remitted to the Govt. account. 5. Though, the tax has been deducted at source at the time of payments in respect of provisions made as on 31 March, it is be stated that it was the assessee company's responsibility to deduct tax at source and remit it to the Govt. account as soon as item of expenditure is debited by it in the books of accounts. Reference is invited to sub section 2 of section 194C, which mandates that the any amount credited to any account whether called suspense account or by any other name, in the books of accounts such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. Similar rovisions/explanation is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision of Rs. 8,06,65,1 02/- 6.2.1 The appellant has submitted that in this case, the deductees were unknown; therefore, the TDS provisions are not applicable as TDS is tax of the deductee. Unless the deductee is known, TDS compliance cannot be done by the deductor. After deducting taxes, the deductor is required to report the income and TDS party-wise in the TDS returns. In the absence of the deductee name, this is not possible. 6.2.2 Ld. AO is directed to verify the claim of the appellant. If the same is found to be correct or to the extant it is found to be correct, the ld. AO is directed not to charge the TDS u/s 201 (1) of the Act on such amount. 6.2.3 In view of the above discussion, the appellant gets the relief to that extant. 6.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date on which such tax was deductible to the date on which such tax is deducted; and... 6.4.3 In view of the above provisions, the ld. AO is directed to calculate the interest from the due date to the date of actual payment of the TDS (wherever TDS payment is applicable as discussed in above paras). In the result, the appeal is Partly Allowed. 4. Against the above order of the Ld. CIT(A), Revenue is in appeal before us. We have heard both the parties and perused the records. 5. At the time of hearing, Ld. DR did not controvert the factual matrix of the case. 6. Ld. AR for the assessee submitted that Ld. CIT(A) appreciated the assessee s contention and passed the appellate orders for AY 2014-15 to AY 2017-18 holding that once the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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