ARTEMIS MEDICARE SERVICES LIMITED,NEW DELHI vs. ACIT, CIRCLE-73(1), NEW DELHI

ITA 2876/DEL/2024Status: DisposedITAT Delhi09 April 2025AY 2014-15Bench: SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, SHRI SUDHIR PAREEK (Judicial Member)10 pages
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What did the Tribunal hold?

Following its own precedent and jurisdictional High Court decisions, the Tribunal held that an assessee cannot be treated as "assessee in default" under Section 201(1) nor charged interest under Section 201(1A) where payees are non-identifiable and TDS is deducted upon actual payment in a subsequent year. The machinery provisions for TDS fail in the absence of an ascertainable amount and identifiable payee, as it would amount to a separate levy rather than aiding the charge of tax under Section 4.

What were the facts?

The assessee made year-end provisions for expenses where payees were not identifiable, reversing these provisions in the subsequent financial year and deducting TDS upon actual payment. The Assessing Officer and CIT(A) treated the assessee as "assessee in default" under Section 201 and Section 201(1A) for non-deduction/short-deduction of TDS for Assessment Year 2014-15, raising a demand of Rs. 19,57,482/-.

What were the issues?

Whether an assessee can be deemed in default for non-deduction of TDS on year-end provisions when payees are not identifiable and TDS is later deducted upon actual payment, and whether interest is leviable in such circumstances.

Which sections of the Income-tax Act were involved?

Section 201,Section 201(1A),Section 194C,Section 194J,Section 194,Section 40(a)(ia),Section 194A,Section 195(2),Section 4,Section 190(1),Section 66A(2)

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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI

Before: SHRI SHAMIM YAHYA, & SHRI SUDHIR PAREEK

For Appellant: Adv. : Shri Ashish Tripathi, Sr. DR
Hearing: 03.04.2025Pronounced: 09.04.2025

PER SHAMIM YAHYA, AM : The assessee filed the present appeal against the order of the Ld. Addl./JCIT(A)-4, Kolkata dated 29.4.2024 pertaining to assessment year 2014-15 on the following grounds:-

1.

That in the absence of identity to whom the credit has to be allowed in respect of TDS, the Assessing Officer has no juri iction to pass the order u/s 201 and 201(1A) of IT Act dated 26.03.2021 holding the assessee as "assessee in default", thereby creating a liability of Rs. 19,57,482/-, IS arbitrary, unjust and invalid.

2.

That the Assessing Officer and the CIT (Appeals) have erred on facts and under the law in holding the assessee as "assessee in default" in respect of the provisions m

The order continues below.

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