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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI S. RIFAUR RAHMAN, HONBLE
O R D E R PER C.N. PRASAD (JM)
This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) – 60, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 30.11.2018.
The only issue in the appeal of the assessee is in respect of levy of interest u/s. 201(1A) of the Act for delay in deduction of tax at source.
2 (A.Y: 2018-19) M/s. Tata Communications Ltd., 3. Briefly stated the facts are that, assessee company received Nil rate certificate No. 0217BP001H dated 04.05.2017 from Tata Teleservices (Maharashtra) Ltd (hereinafter called TTML) and did not deduct tax at source in accordance with the same. Subsequently, the TDS Officer vide his Order dated 23.10.2017 cancelled the Nil rate certificate w.e.f. 31.10.2017. However, the assessee came to know about this cancellation only in the end of December 2017, by which time payments were already made by the assessee Company to the payee TTML without deducting tax at source during the month of November 2017 and December 2017 considering the above Nil rate certificate. However, upon receipt of the intimation about the withdrawal of the exemption certificate, the assessee Company then recovered tax at source at the normal rate of 10% from TTML in relation to the payments made to them during Nov. and Dec. 2017 and paid the same to the Government in January 2018 and furnished the TDS certificates in Form 16A to the payee. Meanwhile TTML filed a writ petition before the Hon'ble Bombay High Court on such abrupt withdrawal of the TDS exemption certificate and the Hon'ble Bombay High Court vide its Order dated 16/25 January 2018 held the cancellation order dated 23.10.2017 passed by the Income-tax dept. as a non-speaking order and rendering the same as bad and quashed the same. However,
Learned Counsel for the assessee submitted that pursuant to the direction of the Hon'ble Bombay High Court, the TDS exemption certificate was restored by another certificate No 0218AG041E which was applicable for the entire period of 28.04.2017 to 31.03.2018. Learned Counsel for the assessee submitted that evidence of these Nil rate TDS certificates from the TRACES site are attached for ready reference in Annexure E. Learned Counsel for the assessee submitted that the demand has arisen since the payment were made to TTML in November 2017 whereas the TDS has been deducted at source on 2.01.2018 and paid to the Government on 17.01.2018. The same has been considered as a “late deduction" by the Assessing Officer and interest on "late deduction" has been charged thereon for 3 months; i.e November 2017 to January 2018. Learned Counsel for the assessee submitted that it may be appreciated that after taking into account of all the actions which took place as above it can now safely be understood that the TDS exemption certificate was valid throughout the financial year 2017-18 and in the light of which, there is no question of "late deduction" at all and hence no interest amount
4 (A.Y: 2018-19) M/s. Tata Communications Ltd., what so ever becomes payable. Therefore, Ld. Counsel for the assessee submits that interest on late deduction ought to be deleted as no more payable.
Ld. DR vehemently supported the orders of the authorities below.
We have heard the rival submissions, perused the orders of the authorities below. It is not in dispute that TTML filed writ petition No. 2701 of 2017 before Hon'ble Bombay High Court by order dated 16/25.01.2018 and the Hon'ble High Court quashed the order passed by the Assessing Officer withdrawing the exemption certificate issued to the assessee for NIL deduction of TDS. By virtue of the order of the Hon'ble Bombay High Court quashing the withdrawal order passed by the TDS Officer, the certificate dated 04.05.2017 issued by the Assessing Officer for NIL rate of tax got revived whereby the position prior to cancellation of the certification on 23.10.2017 was restored. Further, in view of a fresh certificate issued for NIL TDS and is applicable for the period 28.04.2017 to 31.03.2018 NIL certificate got revived and the question of deduction of TDS will not arise. In that case there cannot be any delay. In the circumstances there is no question of levy of interest u/s. 201(1A) of the
In the result, appeal of the assessee is allowed.
Before parting, we noticed that this appeal was heard on 09.01.2020 and the pronouncement is delayed due to lockdown in view of COVID-19 pandemic. The pronouncement is as per Rule 34(5) of Income Tax Appellate Tribunal Rules, 1963 and Hon'ble Bombay High Court decision vide orders dated 15.04.2020 and 15.06.2020 extending the time bound periods specified by Hon'ble High Court by removing the period under lockdown. This aspect was also dealt with in detail by the Mumbai Bench of the Tribunal in case of DCIT v. JSW Steel Vide order dated 15.05.2020.
Order pronounced on 20.07.2020 as per Rule 34(4) of ITAT Rules by placing the pronouncement list in the notice board.