2025 (3) TMI 1439 - HC - Income Tax

State-Owned Corporation Challenges TDS Assessment; Conditional Stay Granted to Contest Rectification Petition Rejection

The Madras HC addressed a Writ Petition challenging the rejection of a Rectification Petition by the first respondent. The petitioner, a state-owned ... Rejection of the Rectification Petition - entire alleged TDS default are covered by Form 26 AS and relevant circulars, notification, issued under the Act - Stay petition - HELD THAT:- As petitioner is a state Owned Corporation and it plays an anchor role to the development of Power Sector Projects in the State of Tamil Nadu, and it is the specific claim of the petitioner that the money/funds received by the petitioner-Corporation from various depositors such as Universities, Temples, Government Companies, are all Statutory Bodies, exempted from payment of TDS, and also taking into consideration of the suggestion made by the learned Senior Counsel for the petitioner that the petitioner has voluntarily come forward to deposit Rs. 30 Crores, passed a conditional order, staying the operations of the Assessment Order passed by the Assessing Officer, till the disposals of the Appeals filed by the petitioners before the Appellate Authority. Thus, present Writ Petition is disposed of granting liberty to the petitioner to agitate the issue with regard to the rejection of the Rectification Petition filed by the petitioner before the Appellate Authority, which shall entertained by the Appellate Authority, while dealing with the Appeals and pass orders in accordance with law. The Madras High Court, presided over by Honourable Mr. Justice Krishnan Ramasamy, addressed a Writ Petition challenging the rejection of a Rectification Petition by the first respondent, dated 07.02.2025. The petitioner, represented by Mr. P.S. Raman, Senior Counsel, contested an Assessment Order labeling them as an 'assessee in default.' The petitioner had filed appeals and a Rectification Petition under Section 154 of the Act, arguing that the alleged TDS defaults were covered by Form 26 AS and relevant circulars and notifications.The Rectification Petition was rejected, and the Stay petitions were also denied by the respondent-Department, which required a 20% payment of the disputed tax. The petitioner, a state-owned corporation involved in power sector projects, argued that funds received from statutory bodies were exempt from TDS. The court, acknowledging the petitioner's role and voluntary deposit of Rs. 30 Crores, issued a conditional order staying the Assessment Order until the appeals' resolution.The court disposed of the current Writ Petition, allowing the petitioner to contest the Rectification Petition's rejection before the Appellate Authority, which must consider the issue while addressing the appeals. No costs were ordered, and the connected Miscellaneous Petition was closed.