TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 1198
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.... case are that the assessee is Co-operative Bank and filed its return of income for A.Y 2013-14 on 30.09.2013, declaring Nil income. In the course of assessment, the Assessing Officer found that the assessee had made provision for rent expenses of Rs. 20,89,512/- and also claimed deduction for legal & consultation fees of Rs. 5,03,500/- on which no tax deduction at source (TDS) was made. On the basis of this information the TDS Assessing Officer initiated proceeding u/s. 201(1) r.w.s 201(1A) of the Act. The TDS AO noticed that the assessee was required to deduct TDS at the rate of 10% on the rental expense under the provision of section 194I of the Act. Similarly, the TDS was required to be deducted @ 10% u/s. 194J of the Act on the legal a....
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....Tax Officer TDS-2, Surat for Asstt.Year 2013-14. 5. The learned Addl./Jt. CIT(A)-1, Mumbai has erred in confirming the levy of the interest u/s 201 r.w.s 201(1A) of the IT Act, although Assessee was not required to deduct the tax at source and for the addition made u/s 143(3) of the IT Act, Appeal filed is pending for disposal. 6. Assessee was not liable to pay and therefore question of deducting tax thereon and payment thereof does not arise. Thus, there being no failure on the part of assessee to deduct and pay, provisions of Section 201(1) OF THE it Act has been wrongly invoked. So also, provision Sec.201(1A) has been wrongly invoked. 7. Your Appellant craves leave to add, alter, amend or delete all or any of t....
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...., the assessee could not be treated as "assessee in default" only if the conditions as specified in the proviso to that section were satisfied. He submitted that no evidence for satisfaction of conditions in proviso to section 201(1) of the Act was brought on record by the assessee. Therefore, the TDS AO had rightly passed the order u/s. 201(1) r.w.s. 201(1A) of the Act in the present case. 7. We have considered the rival submissions. There is no dispute to the fact that assessee had claimed expenses for rent of Rs. 20,89,512/- and legal and consultation fees of Rs. 5,03,500/- on which no TDS was made under the provisions of the Act. The provision of section 194I of the Act stipulates that any person (other than individual and HUF) is re....
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.... provisions of this Chapter on the sum paid to a payee or on the sum credited to the account of a payee 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 return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed: Provided further that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed t....
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....e interest shall be paid by the person in accordance with such order.] [Emphasis supplied.] 8. It is evident that the provision of section 201(1) of the Act is operative without prejudice to any other consequence. Therefore, the contention of the assessee that no action was called for u/s 201(1)/201(1A) of the Act for the reason that disallowance was already made u/s 40a(ia) of the Act, is rejected. The provisions of section 201(1) of the Act stipulates that where a person who is required to deduct TDS, does not deduct TDS or does not pay the TDS after deduction, then such person without prejudice to any another consequence, shall be deemed to be "assessee in default" in respect of such tax. At the same time proviso to section 201(1) ....
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.... TDS at the time of making provision. Since the conditions as stipulated in the proviso to section 201 of the Act was not found fulfilled in the present case, the TDS Assessing officer had rightly treated the assessee as "assessee in default". 10. Regarding rental expenses the assessee has admitted that the assessee had made only provision of expense and the amount was not credited to parties account due to disputes. The provision was made in the F.Y.2012-13 whereas the TDS AO had initiated the proceeding in the F.Y. 2018-19, still the assessee had not explained about the status of the provision or resolution of the dispute after six years. The rent must have been paid or provided as per agreement and nothing prevented the assessee to de....