TaxTMI 
TaxTMI 
2024 (7) TMI 1812
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....stances of the case and in law, the first appellate authority erred in not allowing credit for TDS on rental income from SVIL Mines Limited, in a sum of Rs. 2,60,000/-. 4. On the facts and in the circumstances of the case and in law, the first appellate authority erred in confirming charge of interest under the Act. 3. Before us ld. Counsel submitted that ld. CIT(A) has dismissed the appeal on the ground that appeal was filed on 04/02/2023 against order dated 18/08/2014 u/s. 143(1). The assessee's contention was that intimation itself was received on 14/01/2023, which Ld. First Appellate Authority has stated that assessee had failed to substantiate its claim. He submitted that assessee has filed the proof for intimation u/s. 143(1) which was received on 14/01/2023 and thus, he has wrongly held that the appeal is barred by limitation. 4. In view of the fact that the intimation u/s. 143(1) itself was received on 14/01/2023, then the appeal was filed on 04/02/2023 was within time, accordingly, the finding of the ld. CIT (A) for not condoning the delay is reversed as the appeal was filed within time. However, the Ld. CIT (A) also decided the appeal on merits. 5. The b....
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....e ld. CIT(A). The Hon'ble Gujarat High Court in the case of Kartik Vijaysinh Sonavane vs. DCIT 440 ITR 11(Guj) held that whether TDS has been deducted by the employer of the assessee, it will always be opened for the department to recover from the said employer at the credit of same could not have been denied by the assessee. The Hon'ble Gujarat High Court has relied upon its own judgment rendered in the case of Devarsh Pravinbhai Patel vs. Asstt. CIT in Appeal No.12965 of 2018 dated 24/09/2018 where employee in the case of the petitioner who is an employer of the Kingfisher Airlines worked as a pilot, no TDS on salary was deducted but not deposited. The Hon'ble Gujarat High Court after referring to the Hon'ble Gauhati High Court judgment in the case of ACIT vs. Om Prakash Gattani had allowed the same by holding that the assessee deductee is entitled to credit of the tax deducted at source with respect to amount of TDS for which Form No.16A issued by the employer deductor. If the department is of opinion that deductor has not deposited the said amount of tax deducted at source, it will always been open for the department to recover the same from the deductor. But department cannot ....
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....IT-8(1) wherein in the context of 194I only the Hon'ble High Court held that Section 205 is barred against direct diamond on assessee where the tenant-lessee of assessee statutorily deducted tax u/s.194I for monthly rent payable to assessee but failed to remit the same to Central Government, Revenue could not enforce recovery of that amount from assessee for such failure on the part of tenant, in view of embargo/ prohibition provided u/s.205. The relevant observation of the Hon'ble High Court reads as under:- "8. Section 205 of the Act reads as under: "205. Bar against direct demand on assessee : Where tax is deductible at the source under Sections 192 to 194, Section 194A, Section 194B, Section 194BB, Section 194C, Section 194D, Section 194E, Section 194G, Section 194K, Section 194H, Section 195, Section 194EE, Section 194-I, Section 196A, Section 194F, Section 194J, Section 196B, Section 196C and Section 196D, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income." On a plain reading of this provision, it is very clear that in a situation where the tax is deductible at source under Sec....
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....r the provision of deduction of tax at source, it becomes obvious that such person is acting on behalf of the Revenue, i.e., as an agent of the Revenue. In fact, the person is enabled statutorily to make deduction and remit the amount to the Central Government, though in the instant case, the person who has deducted the amount may be the tenant or lessee of the petitioner and there is such inter se relationship as between the two, insofar as the deduction of tax at source representing 20 per cent of the monthly rent payable as envisaged under Section 194-I of the Act is concerned, the deduction is under the statutory obligation and on behalf of the Revenue and because of the compulsion herein. It is not as if the petitioner could prevent such deduction. When the person like a tenant acts as a representative or agent of the Revenue for such deduction and if there is any violation on his/her part, the consequence should fall only on the Revenue and that cannot be foisted on the assessee. It is no doubt true that the assessee if pays the tax in terms of the tax liability, i.e., under the assessment order and to the extent of the amount is not paid to the Government remains a liability....
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....st Pvt. Ltd. v. DCIT 2023:DHC:8284-DB. 5. We may also add to the reasoning that is already embedded in the aforementioned judgments, in view of the renewed emphasis, albeit with greater vigour, laid by the appellant/revenue. 6. The submission of Mr Bhatia [based on Section 199 of the Act] simply boils down to this: the expression "and paid" found in sub section (1) of the said provision mandates that credit for tax deducted at source can only be extended when the deductor deposits the amount with the Central Government. 7. In this context, it is important to note that sub-section (3) of Section 199 of the Act alludes to the power invested in the Central Board of Direct Taxes (CBDT) to frame rules as to how credit in respect of tax deducted or tax paid in terms of Chapter XVII is to be given. [See Rule 37BA]. Significantly, the CBDT is empowered to frame rules that may be necessary to give credit to a person "other than those referred to in sub-section (1) and sub-section (2)" of Section 199. Therefore, Section 199, read in its entirety, does not limit credit only to those deductees whose deductors have deposited the amount with the Central government. ....
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.... this Act (not being income chargeable under the head "Salaries" ) payable to such non-resident is made amenable to deduction of tax at source under Section 195 of the Act. 8.4 Specifically, the grossing up principle finds statutory recognition in Section 198 of the Act. This is a principle, whereby, income which is payable, say, under any agreement/arrangement [in a case not referred to in Section 192(IA), and the tax chargeable on that income is required to be deducted by the payor, then the income is increased by the payor/deductor and offered to tax inclusive of the tax deducted at source. 8.5 Chapter XVII also contains provisions where, if tax is not deducted at source, it can be recovered from the payee. This is contained in Sections 191 and 202 of the Act. 8.6. Significantly, Chapter XVII contains provisions for penalizing the payor/deductor when he fails to deposit the tax deducted at source with the Central Government. For instance, the Act provides for consequences qua the person who is obliged to deduct tax at source but fails to do so or, after deducting fails to deposit the same. Under Section 201, such a person is deemed to be an "assessee-i....
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....chosen not to deposit the amount with the Central Government is erroneous for another reason, which is that the nature of the amount retained by the deductor continues to remain as 'tax'. 13.1 This aspect clearly emerges upon perusal of the contents of the information provided in the Tax Payers Information Series-28 booklet titled 'Tax Deduction at Source (TDS) Other Than Salaries' published by the Income Tax Department. The booklet notes that tax deducted at source will be treated as payment of 'tax' on the assessee's behalf. For convenience, the relevant part of the booklet is extracted hereafter: 4.2 Credit of TDS Where taxes have been deducted at source from any payment of income receivable by an assessee, the amount of tax deducted at source would be included in the income of the assessee while computing the income of the assessee and would be deemed to be the income received (S.198). Further credit will be given to the assessee while calculating the net tax payable by him and the tax deducted at source will be treated as a payment of tax on his behalf (i.e. to the Central Government by the payer who has deducted the tax at source (S.199)). [Emphasis is ou....