Lottery TDS verification under section 194B required transaction-wise scrutiny before liability under sections 201(1) and 201(1A).

Relief granted by the CIT(A) in a tax-deduction dispute over lottery winnings could not be sustained without proper verification of the identity and genuineness of the prize winners and without examining, transaction-wise, the applicability of section 194B and the resulting exposure under sections 201(1) and 201(1A). As the factual matrix had not been adequately verified, the matter required fresh consideration. The ITAT remanded the case to the CIT(A) for de novo adjudication after proper fact-finding and after affording the assessee an opportunity of hearing, and the Revenue's appeals were allowed for statistical purposes.

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Issues: Whether the relief granted by the CIT(A) could be sustained without examining the identity and genuineness of the prize winners and without verifying, on a transaction-wise basis, the applicability of section 194B and the consequential liability under sections 201(1) and 201(1A) of the Income-tax Act, 1961.

Analysis: The appeals arose from an order granting relief to the assessee in proceedings treating it as an assessee in default for failure to deduct tax at source on lottery winnings. The matter turned on whether the relevant factual matrix had been properly verified, including the identity and genuineness of the prize winners and whether the statutory threshold and liability were to be examined transaction-wise. Since such verification had not been adequately undertaken, the issue required fresh consideration by the first appellate authority.

Conclusion: The matter was remanded to the CIT(A) for fresh adjudication after proper verification of facts and after affording an opportunity of hearing; the Revenue's appeals were therefore allowed for statistical purposes.

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