TaxTMI 
TaxTMI 
2016 (2) TMI 509
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.... the Ld. CIT(A) erred in confirming the order of the AO in treating the Appellant as "assessee in default" on short deduction of tax deducted as source without appreciating the facts that the recipient/payee would have already paid taxes on their income and recovering the same again from the Appellant amounts to recovery of tax twice. 2. The CIT(A) failed to appreciate and ought to have held that once the basic information like declaration from the recipients, PAN and income tax acknowledgement number of the recipients are given, the onus to verify whether the recipients have paid taxes on their income shifted to the Department. 3. The Appellant prays that it be held that the Appellant is not 'assesse in default'. Alternativel....
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....t that the assessee instead of deducting tax @ 22.66% as applicable to corporate has applied the rate of 11.33% applicable to non-corporate. It was submitted, such short deduction of tax is in respect of two recipients i.e., G.E. Capital Services India and DSP Merrill Lynch Capital Ltd. However, as both these recipients have given declaration stating that they have filed their return of income for the relevant financial year declaring the amount received as income and paid taxes therefore, the assessee cannot be treated as an assessee in default under section 201(1) and no demand for recovery of the taxes for alleged short deduction can be raised. In support of such contention, assessee also submitted the confirmation / declaration received....
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....ssessment year 2009-10. He submitted, when the deductees have declared the income / receipts on which there was short deduction of tax in their return of income for the assessment year under dispute, the assessee cannot be treated as an assessee in default under section 201(1) as per the decision of the Hon'ble Supreme Court in Hindustan Coca Cola Beverage (P.) Ltd. v/s CIT, [2007] 293 ITR 226 (SC). Further, learned counsel submitted, if the Assessing Officer still had any doubt with regard to the fact, whether the receipts subject to deduction of tax has been declared as income in the return of income filed by the deductee and taxes were paid thereon, it is for the Assessing Officer to exercise his powers conferred on him and can....
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....ed Commissioner (Appeals), though, he does not deny the fact that assessee has furnished confirmation from both the recipient companies but he has rejected assessee's claim by stating that confirmation letters do not specify whether taxes have been paid on the amount received and, if so, the date of payment of tax. In our view, the decision of the learned Commissioner (Appeals) is unacceptable. On a perusal of the confirmation letters, it is clearly evident that both the recipient companies have admitted the fact that the amount received from the assessee which were subject to deduction of tax at source have been shown by them in the return of income filed by them for the assessment year 2009-10. That being the fact, keeping in view the pri....
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....letters of confirmation have been filed from eight of them before the CIT(A). The Permanent Account Numbers would facilitate an enquiry to be made by the Assessing Officer from the Assessing Officers assessing the payees. It is also to be noted that from eight out of the nineteen parties the assessee has also furnished letters of confirmation. The assessee would appear to have done what it could under the circumstances and it would be a somewhat extreme position to take if it is argued that the burden is entirely upon the assessee. The assessee, it must be remembered, is dealing with its competitors, i.e., the other service providers, who may not be willing to part with their accounts and the details regarding their tax payments or returns ....