TaxTMI 
TaxTMI 
2024 (10) TMI 415
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....n Notification no. 139 of 2021 for Faceless Appeal Scheme, 2021. Thus, there is a violation of principles of natural justice as the assessee was not provided with any opportunity to file his response against the proposed enhancements. The enhancement to income was made purely on an assumption basis without calling for any facts or providing an opportunity to the assessee to submit evidence in support of the facts. 2. Ground II- PAYMENT MADE TO MANAGING DIRECTOR TREATED AS FEES FOR PROFESSIONAL INSTEAD OF SALARY. 2.1 On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in treating payment of salary to the Managing Director (MD) of the company as fees for professional services' holding that the MD was acting in capacity of agent requiring deduction of tax at source as per section 194J(1)(ba) of the Act instead of treating it as salary. 2.2 The learned CIT(A) have erred in recharacterizing salary paid to MD as fees for Professional Services purely on an assumption basis without giving an opportunity to the assessee to explain the facts of the case. 3. GROUND NO. III - INCORRECT LEVY OF INTE....
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....nd the date of deduction of TDS was 25.07.2019. As there was a delay of 4 months from the date of Salary payment and TDS deduction, a late deduction/collection interest u/s 201(1) of the Income Tax Act,1961 @1% for the default period was charged amounting to Rs. 5,16,892/-. A intimation u/s 154 of the IT Act, 1961 was sent to the appellant determining Rs. 5,16,892/- as Additional late deduction/collection interest against proceeding of correction statement . 6.3 The appellant has filed the following a written submission in support of these grounds: Our Company is a WHO-GMP certified company having manufacturing facility for terminally sterilized as well as aseptically filled injectables in Ampoules, Vials (Liquid and Lyophilized), Pre-fill Syringes and Sterile Pre-crimped Cartridges for pharmaceutical companies. The appeal relates to chargeability of interest u/s 201 in connection with delay in payment of TDS in respect of payment covered under the head 'Income from Salaries' u/s 192 wherein TDS is due on the basis of date of payment of Salary' and not on the basis of provision made at the year end. . The concerned salary relates to commission....
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....yment of TDS is considered 85 30th April 2019 for calculation of interest in the said order. 5. Since there is no option of rectification application in Traces website for TDS matters, a 'Request for resolution' application was filed by the company on TRACES website against above said demand on 09.09.2019. 6. The TRACES responded on 11.09.2019 where in no cognizance of our reply was taken and thus, the appeal was filed. 6.4 I have gone through the assessment order, the written submission of the appellant and other materials on record. It is matter of fact that as per Section 192 of the IT Act, 1961. 192.^40(1) Any person responsible for paying any income chargeable under the head "Salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year. However, it is crucial 10 ascertain the Commission received by Mr. Kairus Dadachaniji as percentage of profit is considered as Salary to an employee or a payment to....
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....s a servant or an agent. A managing director has the dual capacity of a director as well as an employee, and whether he is the one or the other depends upon the articles of association and, the terms of his employment. By the resolution passed by the Boards of Director of the appellant company, it was evident that Mr. Kairus Dadachanji was reappointed as Managing Director for a period of 3 years from 01.04.2017 to 31 03.2020. Further, in Dharan Chemicals work Itd. v. State of Saurashtra; (EC 1957 AIR 264, 1957 SCR 152) Supreme Court held that the Prima Facie test for Relationship; is the existence of master's right to supervise and control work of his servant. However, in the absence of the contract of employment and terms and condition of employment, the existence of master s right to supervise and control work of his servant is undetermined. Thereby, the claim on appellant that the Managing Director is full time employee of the company is misleading. 6.6 In Laxminarayan v. Government of Hyderabad case (EC No: 1954 AIR 364, 1955 SCR 393) the Supreme Court held that, the Status of agent is much like independent contractor. He undertakes work for principle and he earns ....
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....DS statements u/sec.200A of the Act reading as under : "200A. (1) Where a statement of tax deduction at source or a correction statement has been made by a person deducting any sum (hereafter referred to in this section as deductor) under section-200, such statement shall be processed in the following manner, namely:- (a) the sums deductible under this Chapter shall be computed after making the following adjustments, namely:- (i) any arithmetical error in the statement; or (ii) an incorrect claim, apparent from any information in the statement; (b) the interest, if any, shall be computed on the basis of the sums deductible as computed in the statement; (c) the fee, if any, shall be computed in accordance with the provisions of section-234E; (d) the sum payable by, or the amount of refund due to, the deductor shall be determined after adjustment of the amount computed under clause (b) and clause (c) against any amount paid under section-200 or section-201 or section-234E and any amount paid otherwise by way of tax or interest or fee; (e) an intimation shall be prepared or generated and sent to the deductor speci....