Speaking order required for TDS default determination; cryptic computation led to remand for fresh adjudication.

A TDS default determination under sections 201(1) and 201(1A) must rest on a speaking order with proper computation and recorded reasons. Where the Assessing Officer's order is cryptic and the appellate authority has not cured that defect, the determination is unsustainable. The Tribunal therefore set aside the impugned appellate order and restored the matter to the Assessing Officer for fresh adjudication after granting the assessee an effective opportunity of hearing and passing a speaking order in accordance with procedure.

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Issues: Whether the order treating the assessee as in default and levying interest under sections 201(1) and 201(1A) of the Income-tax Act, 1961 was vitiated for want of a speaking order and proper computation, and whether the matter required remand for fresh consideration.

Analysis: The order passed by the Assessing Officer was found to be cryptic and lacking a proper speaking basis. The appellate authority had directed recalculation of tax after giving credit for tax paid by the deductees, but had not addressed the basic defect in the Assessing Officer's order. The Tribunal relied on the requirement that computation and demand must be properly recorded and that the assessee must be given an effective opportunity before a valid determination is made. In these circumstances, the Tribunal held that the matter should be restored to the Assessing Officer for passing a speaking order after following the proper procedure and affording hearing to the assessee.

Conclusion: The impugned appellate order was set aside and the matter was remanded to the Assessing Officer for fresh adjudication, with directions to pass a speaking order after giving the assessee an opportunity of hearing.

Ratio Decidendi: A TDS default determination must be supported by a speaking order containing proper computation and reasons, and where the order is cryptic, the matter is liable to be remanded for fresh decision after affording hearing.

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