TaxTMI 
TaxTMI 
2023 (2) TMI 912
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....Zila Parishad in ITA No. 15/JPR/2023 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical except the difference in the amount of levy of tax / penalty in other assessment year. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 15/JPR/2023 is taken as a lead case. 4. Based on the above arguments we have also seen that for all two appeals grounds are similar, facts are similar and arguments were similar and therefore, were heard together and are disposed by taking lead case facts, grounds and arguments from the folder in ITA No. 15/JPR/2023. 5. Before moving towards the facts of the case we would like to mention that the revenue has assailed the appeal in ITA No. 15/JPR/2023 before us on the following grounds; "1. The appellant craves its rights to add amend or alter any of the grounds on or before the hearing. 2. Whether on the facts and in the circumstances of case, the Ld. CIT(A), NFAC,....
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....ppellant deductor. By that time the interest payment to HUDCO was paid without deducting tax at source by the appellant deductor. Due to which the appellant deductor could not deduct tax at source on the interest payment made to HUDCO. It can be clearly stated that the non-deduction of tax at source was not intentional by the appellant deductor and had sufficient cause for non-deduction of tax at source. Further, the appellant deductor also filed certificate of accountant under first proviso to sub-section (1) of section 201 of the Income-tax Act, 1961 certifying the details of return of income, payment of tax etc., by the recipient/payee. On verification of the details submitted during the course of appeal proceedings, the HUDCO has filed its income tax return reflecting the amount received by it towards interest and paid the taxes. As such, the appellant though failed to deduct tax at source on the payments u/s.194A, but as per provisions of Section 201(1), the appellant shall not be deemed to be an assessee in default in respect of such tax if such payee (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such re....
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....ssing officer. Thus the order of the ld. CIT(A) is having the infirmity to that extent and the order of the ld. CIT(A) is bad in law as well as on facts and required to be quashed. 9. Per contra, the ld. AR of the assessee has submitted their written to counter the grounds of appeal raised by the revenue and the submission are reiterated here in below:- "That a spot verification was conducted at the office premises of Additional Chief Engineer, Zila Parishad, Sawai Madhopur on dated 12.06.2019 by the Income Tax Officer (TDS), Kota. During the verification, the learned AO has verified the records of the F.Y. 2017- 18 and on the basis of verification, issued a notice u/s 201(1A) of the Income Tax Act, on dated 13.06.2019. In compliance to the notice, the appellant has filed the detailed reply on dated 19.06.2019 clarifying that the appellant has written a letter to the HUDCO Jaipur and HUDCO has clarified in writing vide their letter dated 18.06.2019 that upto May 2017 HUDCO was 100 percent subsidiary of Govt of India. Being 100 percent shares were hold by the President of India, therefore there was no requirement to deduct TDS u/s 194A of the Income-tax Act. Even after M....
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....ers failed to deduct the tax as source, HUDCO has paid due Advance Tax as per Income Tax Act, 1961 considering the interest income from borrowers." The above-mentioned para clearly states that the appellant was still under the impression that HUDCO was a Public Sector Undertaking and was exempt from the purview of TDS. The appellant was inform in the year 2019 and accordingly, the appellant inadvertently did not deduct the TDS on the interest payment made during the year 2017- 18. The non-deduction of TDS was unintentional and without any mela-fied intention. Further as per the proviso to sub-section 1 to section 201 of the Income-tax Act, 1961 states that: Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a (payee or on the sum credited to the account of Ipayeel shall not be deemed to be an assessee in default in respect of such tax if such [payee- (i) has furnished his return of income under; (ii) has taken into account such sum for computing income in such return of income; and (iii) ....
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.... of amount liable for deduction of tax at source, no recovery can be made from the deductor," Therefore, we are of the opinion that the learned Assessing Officer has erred in raising the demand on account of TDS liabilities on Interest payment to Housing and Urban Development Corporation Ltd. Jaipur (HUDCO) during the F.Y. 2017-18 of Rs.52,21,592 and further interest thereon of Rs. 11,20,483 total Rs.64,02,075 while passing the order u/s 201(1) and 201(1A) of the Income Tax Act and the demand generated is not recoverable. Ground No.2 "That under the facts and circumstances of the case, the learned Assessing Officer has erred in raising the TDS liabilities on payment to Rajasthan Patrika Pvt. Ltd. During the F.Y. 2017-18 of Rs 1,492 and further erred in charging the interest of Rs.298 total Rs.1,790 while passing the order w/s 201(1) and 201(1A) of the Income-tax Act." The appellant has paid made a payment of Rs. 74,593 to Rajasthan Patrika Pvt. Ltd. in January 2018 on which there was liability to deduct TDS under section 194C on such amount and in reference to it the learned Assessing Officer has issued a demand notice u/s 156 of the Act. ....
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.... ld. CIT(A) and based on that certificate the liability cannot be fastened upon the assessee. The main grievance of the revenue as it is arising from the ground no. 2 & 4 raised before us that the required forms were not submitted before the assessing officer and in the proceeding before the ld. CIT(A) the same was not considered as additional evidence and the ld. AO has not been equal chance to have his comments on the said form 26A filed in the proceeding before the ld. CIT(A). The Ground no. 1 is general in nature and ground no. 3 is on account of the TDS liability which is on account of these certificate of chartered accountant not required to be fastened upon the assessee the same is not adjudicated. Apropos ground no. 2 & 4 the grievance of the revenue that the assessee has not filed form in the proceeding before the assessing officer and ld. CIT(A) has not considered this as additional evidence and without giving opportunity to the assessing officer accepted this additional evidence in the form of form no. 26A.When there was no dispute about such a declaration being filed in a prescribed format and there was no dispute about the genuineness of such declaration, mere the form....