2022 (4) TMI 1077

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....ssessing Officer [AO] u/s 201(1) / 201(1A) of the Act on 15.03.2017. The sole issue under the appeal is that the assessee has been treated as assessee-in-default u/s 201(1) & 201(1A) for want of Tax Deduction at Source (TDS) on purchase of an immoveable property and consequent demand has been raised u/s 201(1) & 201(1A). 2. The Ld. AR advanced arguments and sought benefit of second proviso to Sec. 40(a)(i) as inserted by Finance Act, 2019 w.e.f. 01.04.2020. The Ld. Sr. DR, on the other hand, submitted that the assessee failed to comply with TDS provisions and therefore, the demand was justified. Having heard rival submissions, our adjudication would be as under. 3. During assessment proceedings, it transpired that the assessee trust purch....

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....rst proviso to Sec.201(1) by drawing attention to the fact that the seller had offered the gains in financial year 2009-10. However, rejecting the same, Ld. CIT(A) dismissed the appeal and directed Ld. AO to compute correct tax and interest u/s 201(1) & 201(1A). Aggrieved, the assessee is in further appeal before us. 5. The Ld. AR submitted that pursuant to the directions of the Tribunal, an assessment has been re-framed in the hands of the seller for AY 2012-13 vide order dated 31.12.2018 wherein the capital gains have been computed in the hands of the seller and a tax demand has been raised. The copy of the assessment order of the seller passed u/s 143(3) r.w.s. 254 has been placed on record. In the said background, Ld. AR sought benefit....

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....e an assessee in default if he fails to deduct tax on a payment made to a resident, if such resident has furnished his return of income under section 139, disclosed such payment for computing his income in his return of income, paid the tax due on the income declared by him in his return of income and furnished an accountant's certificate to this effect. This relief in section 201 is available to the deductor, only in respect of payments made to a resident. In case of similar failure on payments made to a non-resident, such relief is not available to the deductor. To remove this anomaly, it is proposed to amendthe proviso to sub-section (1) of section 201 to extend the benefit of this proviso to a deductor, even in respect of failure ....

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....he assessee has deducted and paid the taxes on such sum on the date of furnishing of return of income by the payee referred to in the said proviso. As per proviso to Section 201(1), a payee shall not be deemed to be an assessee in default in respect of such tax if such payee, (a) furnished its return of income under section 139, (b) has taken into account such sum for computing income in such return of income and (c) has paid the tax due on the income declared by him in such return of income and along with such payee furnishes a certificate to this effect from an accountant in the prescribed form. 7. We are of the considered opinion that the aforesaid amendment is curative in nature and would have retrospective application. Our opinion dra....