Revenue's appeal dismissed: Doctor payments fall under section 194J, not 192; no default under section 201(1) for unidentified payees

The ITAT Delhi dismissed revenue's appeal regarding TDS provisions on payments to doctors. The tribunal held that payments to doctors are covered under section 194J, not section 192, following previous decisions in assessee's favor for assessment years 2009-10 and 2011-12. Additionally, the tribunal ruled that the assessee cannot be treated as assessee in default under section 201(1) for provision expenses where corresponding liability was not credited to vendors' accounts, making payees non-identifiable. The provisions of sections 40(a)(ia) and 201(1)/201(1A) are mutually exclusive, and voluntary disallowance under section 40(a)(ia) does not automatically trigger default provisions.

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Issues Involved:
1. Delay in filing Cross Objections by the assessee.
2. Applicability of TDS provisions under sections 194J vs 192 of the Income Tax Act.
3. Applicability of TDS provisions on year-end provisions for expenses and the treatment of the assessee as "assessee in default" under sections 201(1) and 201(1A).

Summary:

1. Delay in Filing Cross Objections:
The Tribunal condoned the delay of 15 days in filing Cross Objections by the assessee, considering the reasons provided in the condonation petition.

2. Applicability of TDS Provisions under Sections 194J vs 192:
The revenue challenged the CIT(A)'s decision that payments to doctors should be covered under section 194J (TDS on professional fees) instead of section 192 (TDS on salary). The Tribunal upheld the CIT(A)'s decision, referencing the assessee's own case for the assessment year 2009-10 and 2011-12, where it was consistently held that such payments fall under section 194J. Consequently, the grounds raised by the revenue on this issue were dismissed.

3. Applicability of TDS Provisions on Year-End Provisions for Expenses:
The revenue and the assessee contested the applicability of TDS provisions on year-end provisions for expenses. The assessee had voluntarily disallowed the expenses under section 40(a)(ia) in its revised return, arguing that the payees were not identifiable at the year-end. The CIT(A) agreed with the assessee, noting that the AO's remand report confirmed the non-identifiability of payees. However, CIT(A) still held the assessee liable for interest under section 201(1A). The Tribunal, referencing jurisdictional precedents, concluded that the assessee cannot be treated as "assessee in default" under section 201(1) and no interest is chargeable under section 201(1A). Therefore, the grounds raised by the revenue were dismissed, and the cross objection by the assessee was allowed.

Conclusion:
The appeal by the revenue was dismissed, and the cross objection by the assessee was allowed. The Tribunal pronounced the order in the open court on 16/01/2024.

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