AI Drafter 
TaxTMI 
TaxTMI 
2022 (10) TMI 277
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.....09.2022 (acknowledgment placed on record), none appeared on behalf of the assessee. It was seen from the order sheet entries that on earlier so many occasions, no one was appearing on behalf of the assessee for which the case was getting adjourned from time to time, the details of which are as under:- Dates of Hearing Appeared on behalf of theassessee 10.08.2021 None 13.10.2021 None 13.12.2021 None 24.01.2022 None 06.06.2022 None 13.07.2022 None 10.08.2022 None 12.09.2022 None We, therefore, deem it proper to decide the appeals on the basis of material available on record and after hearing the ld. DR. 2.1. There is a delay of '104' days in filing of this appeal by the assessee, for which assessee has filed a condonation application along with an affidavit explaining the reasons for such delay, which is due to the COVID-19 pandemic. After considering the contents of the condonation application and after hearing the ld. DR, the delay in filing of this appeal by the assessee is condoned and the appeal is admitted for adjudication. ITA No. 780/HYD/2020 for AY 2009-10 (by Revenue) ITA No. 126/HYD/2021 for AY 2009....
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.... he held that since the language of section 195(1) for deduction of income tax by the payer is clear and unambiguous and casts an obligation to deduct appropriate tax at the rates in force, therefore, the assessee though a resident, clearly comes under the purview of this section and by virtue of non deduction of tax, has committed a default and hence is liable for tax u/s. 201(1) and also interest u/s. 201(1A) of the I.T. Act. 4.1. He, however accepted the additional grounds raised by the assessee and held that by the Finance Act, 2012, a proviso to Sub-section (1) was introduced whereby if it is proved that the assessee/payee who received the income has paid the tax, then the assessee who failed to deduct tax at source will not be deemed to be an assessee in default.(But this proviso speaks with respect to resident only). He, therefore directed the AO to make due verification of taxes paid by the payee and calculate the levy of tax u/s. 201(1) and levy of interest u/s. 201(1A) 5. Aggrieved with such order of the ld. CIT(A) giving part relief, the revenue as well as the assessee are in appeal before the Tribunal by raising the following grounds: ITA No. 126/Hyd/2021....
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....e Act. ITA No. 780/Hyd/2020 for AY 2009-10 (by Revenue) 1. The order of the CIT(A) is contrary to the law and facts of the case and, therefore. liable to be quashed. 2. The CIT(A) grossly erred in directing the Assessing Officer to recompute the tax/demand u/s. 201(1) of the Act and interest u/s. 201(1A) of the Act, after verification of taxes raid by the payee/nonresident seller. 3. The CIT(A) erred in placing reliance on the amended provisions of Section 201(1) of the Act, so as to treat the assessee "as an assessee not in default", but, ignoring the fact that the said amended provision i.e., first proviso to Section 201(1) of the Act was inserted in the statute book by the Finance Act, 2012 w.e.f. 01-07-2012 and therefore, the same is not applicable to the impugned A.Y. 2009-10. 4. Without prejudice to the ground No. 3, the CIT(A) has failed to appreciate the fact that the first proviso to Section 201(1) of the Act is applicable only in respect of resident payees and non-resident payees are consciously and intentionally excluded by the legislature from the ambit of such benefit of treating the assessee" as an assessee not in default."....
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....t this proviso speaks with respect to resident only. 11.3 With respect to the above, the AO may after due verification of taxes paid by the payee (non-resident seller), may calculate levy of tax u/s. 201(1) and levy of interest u/s. 201(1A) accordingly. 7. In our opinion, the order of the ld. CIT(A) is not justified under the facts and circumstances of the case. We find the provisions of section 201(1) was amended to treat the assessee as an assessee not in default w.e.f. 01.07.2012 and therefore, the same is not applicable to the impugned assessment year i.e., AY 2009-10. Further, the first proviso to section 201(1) reads as under:- 201. (1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect....
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....he Act") is erroneous and bad in law to the extent it confirmed the order dated 31.03.2016 passed by the Income Tax officer (International Taxation) Nellore, ("ld. AO") of levying interest u/s. 201 (1A) and 220(2) of the Act. 2. The Ld. CIT(A) ought to have appreciated the fact that the assessment is barred by limitation and void-ab-initio as the order was passed beyond the limitation period specified under section 201 (3) of the Income Tax Act, 1961. 3. On the facts and circumstances of the case, the ld. CIT(A) ought to have deleted the addition on account of interest u/s. 201(1A) of the Act of Rs. 80,912 and 220(2) of the Act of Rs. 96,248 4. The Ld. CIT(A) ought to have appreciated the fact that Income Tax Officer (International Taxation) is without jurisdiction and as such the order is liable to be quashed. 5. On the facts and circumstances of the case, the Ld. CIT(A) ought to have appreciated the fact interest u/s. 201 is compensatory in nature and once the assessment is completed in case of recipient by assessing income and tax along with interest under sections 234A, 2348 and 234C as the case may be, the department is compensated with the ....