TDS liability dispute on reimbursable expenses sent back for fresh consideration after documentary evidence was not examined.

A demand order under Section 201 and Section 201(1A) of the Income-tax Act was set aside because the petitioner claimed the payments were reimbursable expenses not subject to tax deduction at source, but no supporting documentary material had been produced before the assessing or revisional authority. The Court found the existing record insufficient for a final determination on non-liability and held that the matter required reconsideration after examination of documents. The consequential revisional order was also set aside, and the matter was remanded for fresh consideration with a personal hearing.

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Issues: Whether the demand order under Section 201 and Section 201(1A) of the Income-tax Act, 1961 and the consequential revisional order were liable to be set aside and the matter remanded for fresh consideration in view of the petitioner's claim that it had not been given adequate opportunity to substantiate non-liability to deduct tax at source.

Analysis: The petitioner asserted that the amounts represented reimbursable expenses and that no tax deduction at source was required, but no supporting documentary material had been produced before the assessing authority or the revisional authority to substantiate that claim. In these circumstances, the Court found that the existing record was insufficient for a final determination on the liability issue. To afford a further opportunity and to enable the authorities to examine the documentary evidence, the Court considered remand appropriate in the interests of justice.

Conclusion: The impugned demand order was set aside and the matter was remanded to the assessing authority for fresh consideration after receipt of documents and affording personal hearing, and the consequential revisional order was also set aside.

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