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Facts
The assessee company is engaged in the business of construction of roads, dams, and other projects. The Assessing Officer initiated proceedings for non-deduction of TDS and levied interest. The assessee appealed to the CIT(A), who granted partial relief after a remand report. The assessee further appealed to the Tribunal.
Held
The Tribunal considered the rival submissions and the material on record. It noted that the Assessing Officer had determined the liability, and the CIT(A) had called for a remand report and granted relief based on it. The Tribunal then analyzed various grounds of appeal.
Key Issues
Whether the CIT(A) erred in confirming the tax levied and interest charged for non-deduction of TDS on various expenditures. Also, whether the CIT(A) correctly adjudicated the grounds of appeal, including those related to general nature and those requiring specific adjudication.
Sections Cited
201(1), 201(1A), 194C, 271C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order u/s 201(1) and 201(1A) of the I.T. Act, 1961, dated 21/08/2019 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2009-10.
The assessee has raised the following grounds:
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Brief facts of the case are that the assessee company is engaged in the business of construction of roads, dam and other projects. The Dy. CIT Circle 14(2) initiated proceedings u/s 201(1) and 201(1A) of the I.T. Act, 1961 and passed the order dated 25/3/2-11 whereby determined the liability of non-deduction of TDS on various payments and interest on non-deduction of TDS as well as delay in payment of the same to the Govt. Account at Rs.1,45,94,494/- by holding it as “assessee in default”.
The assessee challenged the action of the Assessing Officer before the learned CIT (A) and pointed out certain discrepancies in the details and facts which were considered by the Assessing Officer while framing the order u/s 201(1) and 201(1A) of the I.T. Act, 1961. The assessee has also pointed out that certain expenditure was not incurred under the contract or agreement and therefore, the provisions of section 194C are not attracted in respect of those payments. The learned CIT (A) called
ITA 1524 of 2019 Madhucon Projects Ltd for a remand report from the Assessing Officer and then granted part relief to the assessee.
Before the Tribunal, the learned AR of the assessee has submitted that the assessee has already deducted the TDS in respect of the alleged payments and also remitted to the govt. account except an amount of Rs.40,495/-. Thus, the learned AR has submitted that even the Assessing Officer has issued a notice u/s 156 dated 26/09/2019 whereby raised the demand of Rs.40,495/- which shows that the assessee has already complied with the provisions of section 194C so far as the payments were subjected to the TDS. He has thus, pleaded that the said demand raised by the Assessing Officer is also on account of the certain payments which are not subjected to TDS are taken into consideration and therefore, the Assessing Officer may be directed to verify the relevant facts and details about the applicability of the provisions of section 194C in respect of the certain demand for which the assessee will provide all necessary details for verification and examination of the Assessing Officer.
6. On the other hand, the learned DR has objected to the prayer of the learned AR for remanding the matter to the Assessing Officer and submitted that the learned CIT (A) has called for a remand report and verified each and every head of payment carefully and then given the finding based on the relevant details and records produced by the assessee. He has Page 6 of 17
ITA 1524 of 2019 Madhucon Projects Ltd thus, pleaded that the impugned order of the learned CIT (A) needs to be upheld.
We have considered the rival submissions as well as the relevant material available on record. While passing the order u/s 201(1) and 201(1A) of the I.T. Act, 1961, the Assessing Officer has determined the liability of the assessee at Rs.1,45,94,493/-. The learned CIT (A) has called for a remand report from the Assessing Officer for examination of the additional evidence filed by the assessee which was submitted by the Assessing Officer on 29.02.2016. The said remand report is reproduced by the learned CIT (A) in Para 5 of the impugned order as under:
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The learned CIT (A) has then given part relief to the assessee as under:
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In this remand report, the Assessing Officer has accepted the claim of the assessee wherever the relevant details and record was filed in respect of the TDS deduction and payment of the same which is manifest from the report as reproduced above. Consequently, the learned CIT (A) has granted the relief in terms of the remand report while passing the impugned order. In Page 14 of 17
ITA 1524 of 2019 Madhucon Projects Ltd giving effect to the order, the Assessing Officer vide order dated 26/09/2019 has worked out the balance demand payable for Rs.40,495/- as under:
ITA 1524 of 2019 Madhucon Projects Ltd 8.1 Thus, it is clear that except Rs.40,495/- the other liability determined by the Assessing Officer was considered to be complied with by the assessee by deducting the TDS and payment of the same along with interest to the govt. account.
The learned AR of the assessee has submitted that this remand report from the Assessing Officer is also based on the wrong consideration of some of the amounts as liable for TDS u/s 194C whereas the assessee has made it clear claimed that the some of the payments made on account of transportation are not falling in the ambit of section 194C and therefore, the assessee was not liable to deduct TDS on those payments. Even in some of the payments which were in the nature of advance are also subjected to the TDS. Thus, the relevant details were produced before the learned CIT (A) but those were not accepted and therefore, the same are required to be properly verified and examined at the level of the Assessing Officer. Since the issue is limited to the extent of liability of assessee of Rs.40,495/- as shown by the Assessing Officer in the order dated 26/09/2019 passed as consequential order to the order of the learned CIT (A), therefore, in the facts and circumstances of the case and in the interest of justice, the matter to the extent of balance liability is remanded to the record of the Assessing Officer for verification of the relevant details and then adjudicate the same as per law after giving an opportunity of hearing to the assessee. The Assessing Officer has to give a specific finding about certain payments as Page 16 of 17
ITA 1524 of 2019 Madhucon Projects Ltd claimed by the assessee are of falling in the ambit of section 194C.
In the result, appeal filed by the assessee is allowed for statistical purposes.