2025 (10) TMI 1302

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....evelopers Rs.2,20,99,263/- ii) M/s M.M. Advertiser Rs. 5,76,791/- iii) M/s Jagram Prakashan Ltd., Rs. 38,155/- iv) M/s Unique Communication Rs. 5,75,599/- 3. Since, the assessee should have deducted the tax at source as per provisions of section 194C of the Income tax act at the time of crediting the said payments to the accounts of the contractors, which it has failed to do, thus the assessee was treated as assessee in default by the AO and amount of Rs. 7,50,231/- u/s 201 (1 )/201 (1A) of the Income-tax Act, 1961 (for short 'the Act') was made payable by him. 4. Aggrieved assessee preferred an appeal before the ld. CIT (A) and submitted as under :- "1. Since the assessee was made an oral contract with M/s Ronit Developers based on no profit no loss basis plus 4% of his supervision to built one part of Engineering college. But the matter was dispute with the contractor. However, the Assessing Officer has presumed that the assessee should have deducted the tax at source as per provisions of section I94C of the income tax act at the time crediting the said payments to the account of Contractees, which it has failed to do. Thus the assesse....

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....x act, 1961 is not applicable for aforesaid payment made, hence the assessee society is not treated as assessee in defaults amounting to Rs. 7,50,231/-. Under Section 201(1) & 201(1A) of the Income Tax Act, 1961. Payment for Advertisement Expenses to M/s MM Advertisers Rs. 5,76,791/-, M/s Jagran Prakashan Ltd. Rs. 38,155/-, M/s Unique Communication Rs. 5,75,599/-. The aforesaid payment was paid for advertisement given in the various newspapers during the year, the parties has issued various small bills less than Rs. 30,000/- of one single bill. Therefore, the Society has not deducted TDS on the aforesaid payment made. In view of the above and circumstances, it is prayed that fact of the case may please be judicious reviewed and the appropriate relief may please be granted. 6. After considering the submissions of the assessee, ld. CIT (A) dismissed the contentions of the assessee by observing as under :- "9. As regards payment for the advertisement expenses it was submitted by the assessee that the payments were given to various newspapers during that year and the parties have issued small bills of less than Rs. 30,000/-. In view of this monetary limit,....

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....he stand of the AO is hereby confirmed and the total demand raised of rupees 7,50,231/- by treating the assessee as assessee in default for not deducting TDS under section 194C is hereby confirmed." 7. Aggrieved assessee is in appeal before us raising following grounds of appeal :- "1. Since the assessee was made an oral contract with M/s Ronit Developers based on no profit no loss basis plus 4% of his supervision to built one part of Engineering college. But the matter was dispute with the contractor. However, the Ld/- A. O. has presumed that the appellant should have deducted the tax at source as per provisions of section 191C of the income tax act at the time crediting the said payments to the account of Contractees, which it has failed to do. Thus the appellant is treated as appellant in defaults amounting to Rs. 7,50,231/-for not deducting TDS under section 194C is hereby confirm., which is arbitrary, uncalled for, unjustified and based on surmises and conjunctures. 2. On the facts and in the circumstances of the case, the order of the ld. CIT (A) is bad in law and not in consonance with the facts of the case. 3. The Ld CIT ( A) failed to apprecia....

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....ors and failed to deduct TDS on certain amounts. We are aware that TDS provisions have gone several changes over the years and several amendments were brought on record especially in section 201/201(1A) of the Act. In case, the payee declares the abovesaid income in their return of income and pays the due tax, the liability of the assessee is discharged and before making the disallowance, the Assessing Officer has to determine whether the assessee is in default or not u/s 201/201(1A). In case, it is found that the payee has declared the payments as their income and paid the due to them, assessee may not be treated as assessee in default for not deducting TDS at all. After considering the fact on record, we observe that the issue involved is of AY 2010-11. There is no point remitting this issue back to the authorities below. In our considered view, the Assessing Officer has determined the liability as per below chart :- Monthly of payment (F.Y. 2009-10) Amount of payment 194J 10% TDS thereon @ 2.266% Date of tax paid Months for delayed payment as on Mar'2013 Interest u/s 201(1A) on late payment Total demand April 55,10,000 1,24,857 - 48 59,931 ....