BHAVNAGAR ENERGY COMPANY LTD.,GANDHINAGAR vs. ACIT, TDS CIRCLE,, AHMEDABAD

In response to the notice of hearing, none has come present on behalf of the assessee. Therefore, we proceed to decide the appeal ex parte qua the assessee appellant.

Brief facts of the case are that the assessee had filed an application dated 15.2.2915 under section 154 of the Act and contended that the company has deducted TDS at the rate of 0.5% for the financial year based on the certificate of lower rate being produced by the company. In fact the TDS was required to be deducted at the rate of 2%. When the AO wrote a letter dated 10.9.2015 for recovery of short deduction of tax, then the assessee filed this rectification application. In the rectification application, the assessee further pleaded that the payee company has already accounted for the income, and has paid tax. Therefore, there is no short fall in collection of tax as such. The ld.AO on the other hand found the submissions of the assessee correct, hence, recovery notice sent at Rs.21,88,764/- was scaled down to Rs.3,06,432/-. This amount was calculated by the AO under section 201(1A) of the Act i.e. interest for the period for which tax required to be paid by the assessee were not paid either by the company or by the payee. He rectified recovery letter and calculated interest at Rs.3,06,432/-.

Against this order, assessee went in appeal before the ld.CIT(A). The ld.CIT(A) has rejected the appeal of the assessee.

With the assistance of the ld.DR, we have gone through the record. There is no dispute with regard to the fact that the period calculated by the AO, the taxes required to be deducted by the assessee and paid to the Government treasury were not paid either by the assessee or by the payee, and therefore, for the default period, the interest is leviable upon the assessee. The AO has rightly levied interest, and no interference is called for the in the order of the ld.CIT(A) on this issue. Accordingly, the appeal of the assessee is dismissed.

In the result, appeal of the assessee is dismissed. Pronounced in the Open Court on 13th January, 2020