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TMI Blog2024 (12) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ho are in receipt of payments and are subject to deduction of tax at source shall mandatorily furnish their PAN Numbers to the deductor and if they failed to do so, the deductor shall be liable to deduct tax at higher rate of 20%. Such provisions were brought in the Act to overcome the excuse of the non-availability of PAN or non-quoting of PAN, creating problems in processing of returns of income and in granting credit for tax deducted at source, leading to delay in issue of refunds. Going through the facts of the present case, as the recipient (Seller) has furnished his PAN Number before completion of the transaction, thus, non-availability of PAN or non-quoting of PAN, which was the concern of legislator has been complied with, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, dated 22.01.2021. 2. The grounds of appeal raised by the assessee are as under: 1. On the facts and in the circumstances of the case, the Ld. ACIT(A) has erred in not considering the submission filed by the assessee before the A.O while passing the appellate order. Therefore, the order passed by ACIT(A) is unjustified, unwarranted and uncalled for. 2. On the facts and in the circumstances of the case, the Ld. ACIT(A) has erred in sustaining the assessment order passed by the ITO(TDS), Raipur wherein the ITO(TDS), Raipur, has erred in raising demand Rs. 4,74,261/- on account of short deduction of TDS. The demand raised by the ITO(TDS), Raipur and sustained by ACIT(A) is unjustified, unwarranted and uncalled for. 3. On the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.00 lac, was not having PAN Number, when the part payment of Rs. 25,00,000/- was made out of Rs. 50,00,000/-. A show cause was issued to the assessee stating that since the assessee was not having PAN Number on the date on which the first payment of Rs. 25,00,000/- was made to him, while the deduction of TDS was done at 1% instead of 20% in terms of prescribed provisions of Section 206AA. In response, assessee submitted that the payment made to Shri Babulal Renge on 27.12.2017 was by M/s Avani Traders proprietor Mr. Rajesh Agrawal (husband of assessee) as unsecured loan, however, later on that amount was utilized towards sale consideration for the transaction of purchase of the land by the assessee, wherein Shri Babulal Renge was one of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bikram Jain, have reiterated the facts from the assessment order and also made same clarifications, which the assessee have claimed before the Ld. AO and have requested to accept the contention of the assessee and vacated the entire demand imposed by the Ld. AO. 7. Ld. Sr. DR, Dr. Priyanka Patel, representing the revenue, per contra, submitted that the order of revenue authorities are justifiable, in accordance with law, thus, deserves to be sustained. 8. We have considered the rival submissions and perused the material available on record. The sole controversy involved in the present matter is regarding applicability of TDS @ 1% or 20% in terms of provisions of Section 194IA with a conjoint reading of Section 206AA. Factually, a payment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le with the transferor Shri Babulal Renge, therefore, TDS @1% was correctly deducted by the transferee u/s 194IA. Under such circumstances, provisions of Section 206AA does not attract to hit the case of the assessee. 9. Herein, we would like to discuss the provisions of Section 206AA which were brought in by the legislature under the Finance (No.), 2019 for improving compliances with provisions of quoting PAN through TDS regime. The relevant extracted from the memorandum explaining Finance Bill, 2019, is extracted hereunder for better interpretation of the issue. d. Improving compliance with provisions of quoting PAN through the TDS regime Statutory provisions mandating quoting of Permanent Account Number (PAN) of deductees in Tax Deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible on payments or credits made to them. To ensure that the deductor knows about the correct PAN of the deductee it is also proposed to provide for mandatory quoting of PAN of the deductee by both the deductor and the deductee in all correspondence, bills and vouchers exchanged between them. This amendment will take effect from 1st April, 2010. 10. As per infusion of aforesaid provisions and the intent of the legislature, it can be inferred that higher rate of TDS was introduced to strengthen the PAN mechanism, so that the persons who are in receipt of payments and are subject to deduction of tax at source shall mandatorily furnish their PAN Numbers to the deductor and if they failed to do so, the deductor shall be liable to deduct tax at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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