Tribunal allows assessee's appeals for assessment years 2013-16, directs verification of tax payments

The Tribunal allowed the appeals filed by the assessee for the assessment years 2013-14, 2014-15, and 2015-16 for statistical purposes. It directed the ITO-TDS to verify the assessee's claim regarding the payees having paid taxes on the commission income and to reassess the liability under Sections 201(1) and 201(1A) accordingly. The procedural delay in pronouncing the order was justified due to the exceptional circumstances of the COVID-19 lockdown.

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Issues Involved:
1. Legality and validity of the order passed by the ITO-TDS under Sections 201(1) and 201(1A) of the Income Tax Act, 1961.
2. Obligation of the assessee to deduct TDS under Section 194H on commission payments.
3. Presumption of commission payments for assessment years 2013-14 and 2015-16 based on the assessment year 2014-15.
4. Compliance with the 'first proviso' to Section 201(1) regarding the payees having paid taxes on the commission income.
5. Procedural delay in pronouncement of the order beyond the stipulated 90 days due to exceptional circumstances.

Detailed Analysis:

1. Legality and Validity of the ITO-TDS Order:
The assessee firm challenged the orders passed by the ITO-TDS, Amritsar, under Sections 201(1) and 201(1A) of the Income Tax Act, 1961, arguing that the orders were against the facts and untenable in law. The CIT(A) upheld the ITO-TDS orders, which led to the assessee filing appeals for the assessment years 2013-14, 2014-15, and 2015-16. The Tribunal noted that the ITO-TDS had based its decision on the failure of the assessee to produce purchase bills for the assessment years 2013-14 and 2015-16 and had presumed the same commission payments as in the assessment year 2014-15.

2. Obligation to Deduct TDS under Section 194H:
The core issue revolved around whether the assessee was obligated to deduct tax at source under Section 194H on the commission payments made during the purchase of wheat. The ITO-TDS observed that the assessee had paid commission (dhami) on wheat purchases without deducting TDS, which was admitted by a partner of the assessee firm during the survey proceedings. The assessee, however, contended that it had made outright purchases and that the commission mentioned in the invoices was between the supplier and the farmer, not affecting its transactions.

3. Presumption of Commission Payments for A.Y. 2013-14 and 2015-16:
The ITO-TDS presumed that the assessee had made commission payments in the assessment years 2013-14 and 2015-16 similar to those in the assessment year 2014-15 due to the non-production of purchase bills. The Tribunal found this presumption unjustified and noted that the assessee should not be held in default based on presumptive payments without concrete evidence.

4. Compliance with 'First Proviso' to Section 201(1):
The assessee argued that the respective dealers to whom the commission was paid had accounted for it in their income tax returns and paid the due taxes, thus the assessee should not be treated as in default under Section 201(1). The Tribunal acknowledged this claim and directed the ITO-TDS to verify the certificates (Form 26A) submitted by the assessee, which confirmed that the payees had included the commission in their income and paid the taxes.

5. Procedural Delay in Pronouncement of the Order:
The Tribunal addressed the procedural issue of the delay in pronouncing the order beyond 90 days due to the COVID-19 lockdown. It referenced the ITAT Mumbai's decision in DCIT Vs. JSW Limited & Ors., which allowed for the exclusion of the lockdown period from the 90-day limit due to exceptional circumstances. The Tribunal agreed with this interpretation, noting that the lockdown period should be excluded when calculating the time limit for pronouncement of orders.

Conclusion:
The Tribunal allowed the appeals filed by the assessee for the assessment years 2013-14, 2014-15, and 2015-16 for statistical purposes. It directed the ITO-TDS to verify the assessee's claim regarding the payees having paid taxes on the commission income and to reassess the liability under Sections 201(1) and 201(1A) accordingly. The procedural delay in pronouncing the order was justified due to the exceptional circumstances of the COVID-19 lockdown.

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