TaxTMI 
TaxTMI 
2023 (9) TMI 555
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....passed under Section 201(1) within time in case of resident prayer had become invalid just because subsequently there was no assessment made in the hands of the non-resident payee within 6 years, without appreciating that there was no law mandating the passing of assessment order in hands of non-resident payee also within 6 years to validate an order already passed under Section 201(1) ? b) Whether on facts and circumstances of the case and in law, ITAT was correct in relying upon the decision of special bench decision in case of Mahindra & Mahindra, without appreciating that the question whether passing of assessment order in the hands of the non-resident payee was mandatory to uphold the validity of the order under Section 201(1) alrea....
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.... Tribunal ("ITAT"), which allowed the Appeal by the impugned order dated 24th March 2017. 5. We have heard the counsels and also considered the impugned order and the appeal memo. 6. It was the case of assessee before the ITAT that assessee was not an assessee-in-default in respect of the payments made to Red Hat Asia Pacific Pte Ltd., Singapore and therefore, assessee can not be saddled with the tax liability under Section 201(1) of the Act and interest thereon under Section 201(1A) of the Act. It was the case of assessee, relying upon the decision of Special Bench of the ITAT, Mumbai in the case of Mahindra & Mahindra Ltd. v. Deputy Commissioner of Income-tax, TDS Range 1(1), Mumbai [2009] 122 TTJ 577 (Mumbai) (SB)., that as per the exp....
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....sum without deducting tax at source as assessee in default. Thus the essence of the provisions of deduction of tax at source is that there is a presumption of liability of the payee to tax on the income. As discussed in an earlier para that if there is no or lower liability of the payee to tax on the income so received without deduction of tax at source, then the payer cannot be treated as assessee in default for the whole or that part of the amount, as the case may be. It is therefore clear that though the duty of deduction of tax at source was there at the time of making the payment or crediting the account of the payee, but its failure will not lead to adverse consequences by treating the person paying the income as assessee in default i....
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....149. The present outer limit provided in section 149 is six years from the end of the relevant assessment year within which a notice under section 148 can be issued. If the income so found to have been earned by the assessee and escaped taxation falls within a period of six years from the end of the relevant assessment year, notice under section 148 will be issued and the assessment shall be framed by taxing such income. If however during such proceedings it is conclusively established that the assessee had earned income not disclosed to the Revenue in period prior to the said six years from the end of the relevant assessment year, then such income will escape taxation unless it falls within section 69 or 69A or 69B or 69C and the Revenue w....
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.... the hands of the payee and the tax so deducted is finally adjusted against the tax liability of the payee. If tax is collected by way of order under section 201(1) from the person responsible failing in his duty to deduct or paying after deduction of tax at source, but such amount cannot be adjusted against the tax liability of the payee, then this collection of tax would be illegal. The CBDT vide its Circular No. 7 of 2007 dated 23-10-2007 has accepted in para 4 that 'where income has accrued but no tax is due on that income or tax is due at a lesser rate, the amount deposited to the credit of Government to that extent under section 195, cannot be said to be "tax".' From here it follows that unless there is a tax liability capable....