TaxTMI 
TaxTMI 
2024 (1) TMI 853
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.... and admit the Cross Objection of the assessee. 3. Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. 4. The revenue has raised the following grounds of appeal :- "1. Relying upon the decision of Hon'ble ITAT, New Delhi in assessee's own case for the F.Y. 2009-10, and hence accordingly, deleting the demand raised on account of short deduction & interest thereon amounting of Rs. 7,07,08,085/- for the F.Y. 2011-12. 2. Shifting the onus of verification of tax details of deductees upon the AO (TDS) as the AO (TDS) does not have access to verify such details of the deductees on the ITD system. 3. Treating the payment made by the assessee as covered u/s 194J of the IT Act in respect of all categories of Doctors (1 to 5th Cat.) as mentioned in the order u/s 201(1) & 201(1A) of the IT Act, 1961 instead of Section 192 being TDS on Salary, as held by the AO. 4. The Ld. CIT(A)-1, Gurgaon erred in law and facts by deleting the demand amounting Rs. 40,26,123/-. 5. The Ld.CIT(A)-1, Gurgaon erred in law and facts by ignoring the and not ....
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....ld. AO in page 31 of his assessment order clearly stated that the facts in Asst Years 2010-11, 2011-12 and 2012-13 were found to be identical and similar treatment was given by him for the earlier years. Consistent with the practice, he treated the assessee as "assessee in default" and levied tax and interest on the assessee for the year under consideration also. The ld. CIT(A) observed that the same issue had already been decided in favour of the assessee by this Tribunal in ITA No. 4718/Del/2013 for Asst Year 2009-10 dated 15.5.2015 and accordingly held that the payments to doctors would be covered only u/s 194J of the Act and not u/s 192 of the Act. We find that the relief has been granted by the ld. CIT(A) by following the Tribunal order passed in assessee"s own case for the Asst Year 2009-10 referred supra. We also find identical view has been taken for Asst Year 2011-12 by this Tribunal in ITA No. 6527/Del/2015 dated 18.9.2017. Hence we do not find any infirmity in the order passed by the ld. CIT(A) in this regard. Accordingly, the Ground Nos. 1 to 3 raised by the revenue are dismissed. 8. The Ground Nos. 4 & 5 raised by the revenue and the Ground raised by the assessee in....
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....nted relief to the assessee by holding that the assessee cannot be treated as "assessee in default" u/s 201(1) of the Act. However, the ld. CIT(A) held that the assessee would be eligible for interest u/s 201(1A) of the Act. Against this, the revenue is in appeal before us and assessee has filed cross objection before us only for contesting the levy of interest u/s 201(1A) of the Act. 10. We have heard the rival submissions and perused the materials available on record. The aforesaid facts and observations made by the ld. CIT(A) and by the ld. AO in the remand report are not in dispute before us. Once there is a categorical finding that the assessee had not credited the corresponding liability for expenses to the account of the concerned vendors who had rendered the services, the payees become non-identifiable and hence there is no question of applicability of TDS provisions on the same. Merely because the assessee had voluntarily disallowed the expenses u/s 40(a)(ia) of the Act in the return, the same would not automatically enable the ld. AO to treat it as "assessee in default" u/s 201(1) of the Act and consequentially levy interest u/s 201(1A) of the Act. In our considered op....
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....bsp; 86,12,471 8,61,247 6. The assessee had stated that it had been regularly following the practice of making provisions for expenses for which parties are not identifiable or amounts payable were not identifiable or bills have not been received or the same have not been processed for payment/credit to the accounts of the payees, based on Accounting Standards-29 "Provisions, Contingent Liabilities & Contingent Assets" issued by the Institute of Chartered Accountants of India (ICAI) while finalizing books of account. It is a fact on record that such provisions were made in view of accrual method of accounting followed by the assessee and the same were reversed in the books of account on the first day of the immediately succeeding year. It is not in dispute that as and when the invoices are received by the assessee in the succeeding year with date of invoice falling in the succeeding year, the same are processed for payment wherein due deduction of tax at source have been made and remitted to the account of the Central Government within the prescribed time. We find that this is a consistent practice followed by the assessee on year-to-year basis. The fact of reversal ....
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....0. In absence of an assessee, the machinery of provisions for deduction of tax to his credit are ineffective. The expression "payee" under Section 194A of the Act would mean the recipient of the income whose account is maintained by the person paying interest. In the present case, although the FD is made in the name of the Registrar General, the account represents funds which are in custody of this Court and the Registrar General is neither the recipient of the amount credited to that account nor the interest accruing thereon. Therefore, the Registrar General cannot be considered as a "payee" for the purposes of Section 194A of the Act. The credit by the petitioner bank in the name of the Registrar General would, thus, not attract the provisions of Section 194A of the Act. Although, Section 190(1) of the Act clarifies that deduction of tax can be made prior to the assessment year of regular assessment, nonetheless the same would not imply that deduction of tax is mandatory even where it is known that the payee is not the assessee and there is no other assessee. 21. It is relevant to note that there is no assessee to whom interest income from the deposits in question can be....
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....writ petitions are allowed and the impugned notice dated 25.04.2012, the impugned circular bearing no. 8/2011 and the impugned order dated 10.03.2014 are set aside (emphasis supplied by us)" 7. We find that in the absence of an ascertainable amount and identifiable payee, the machinery provisions of recovering tax deducted at source falls flat because in either way, it does not aid the charge of tax u/s 4 of the Act, but, takes a form of separate levy independent of other provisions of the Act. Similar view was also taken in yet another decision of the Hon'ble Jurisdictional High Court in the case of DCIT vs. Ericson Communications Ltd. reported in 378 ITR 395 (Dei), wherein it was held as under:- "22. In our view, mere passing of the book entries, which are reversed, would not give rise to an obligation to deduct TAS by the Assessee, as clearly, there is no debt that can be said to be acknowledged by the Assessee. Imposition of an obligation to deduct TAS in these circumstances would amount to enforcing payments from one person towards a tax liability of another, even where the person does not acknowledge that any sum is payable. This, in our view, is cont....
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....re ad-idem that no liability to pay any amount arises, it would not be open for the Revenue to insist on collection of any tax. In the case of CIT v. Shoorji Vallabhdas & Co. [1962] 46ITR 144 the Supreme Court had considered the case where the Assessee firm was a managing agent of inter alia two shipping companies and as per its agreements with the concerned shipping companies, was entitled to managing commission @10% of the freight charged and entries for the same had also been passed in the books of account. The Assessee floated two private companies and desired that the said private companies be substituted as managing agents in its place. In this background one of the shipping companies managed by the Assessee received a letter from two of its shareholders, who objected to the quantum of management agency commission being charged by the Assessee. In this context, the Assessee was invited to make an offer to reduce the commission charged. The Assessee agreed for reduction in the agency commission in order to put the concerned managed companies on a firm financial footing and at the Extraordinary General Body Meeting of the managed companies held subsequently, the private compani....