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Facts
The Income Tax Department found that the assessee, a deductor, failed to comply with Section 194B regarding TDS on lottery winnings, leading to an assessment order treating the assessee as in default and raising a demand. The CIT(A) subsequently granted relief to the assessee, which the Revenue has challenged before the Tribunal.
Held
The Tribunal found that the CIT(A) did not adequately examine the identity and genuineness of prize winners or the transaction-wise applicability of Section 194B. Therefore, the matter is remanded back to the CIT(A) for fresh adjudication after proper factual verification and providing a reasonable opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) erred in granting relief to the assessee without properly verifying the identity and genuineness of prize winners and whether the provisions of Section 194B were attracted on a transaction-wise basis.
Sections Cited
194B, 201(1), 201(1A), Chapter XVII
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SONJOY SARMA, JM
O R D E R Per: Sonjoy Sarma JM These appeals are filed by the Revenue against the common order of the CIT(A) dated 05.03.2025, wherein relief was granted to the assessee. First, we take for narration of facts. 2. ITA No.314/Coch/2025 - In this case, the Income Tax Department, based on information in its possession, found that the deductor (assessee) had failed to comply with the provisions of Section 194B of the Income-tax Act, 1961 (relating to TDS on & 315/Coch/2025 ITO TDS, Palakkad winnings from lotteries or games). As a result, the Assessing Officer finalized proceedings under Sections 201(1) and 201(1A) of the Act on 08.05.2020, treating the assessee as an assessee-in-default and raising a demand of Rs.2,32,65,540/-.
Aggrieved by the said order, the assessee preferred appeals before the CIT(A). The CIT(A) allowed relief to the assessee. However, the Revenue has challenged this order on the ground that the CIT(A) allowed the appeal without properly examining the factual matrix and legal provisions.
Dissatisfied with the above order, the revenue is in appeal before up. Specifically, it is the contention of the Revenue that the CIT(A) failed to verify whether the winners of the prize money were identifiable and genuine, and whether the threshold prescribed under Section 194B was indeed crossed in each transaction. The Revenue further submitted that the CIT(A) erred in allowing the appeal without considering that each transaction of prize distribution, if exceeding the threshold, attracts TDS liability under Chapter XVII of the Act.
We, after hearing the ld. DR and perusal of the material available on record, find that at the time of passing of the impugned order, the ld. CIT(A) did not examine the issue of the identity and genuineness of the prize winners. The CIT(A) had not sufficiently examined whether the provisions of Section 194B were attracted on & 315/Coch/2025 ITO TDS, Palakkad a transaction-wise basis. Therefore, a proper factual verification is required to be examined. In light of the above, we find that the matter should be remanded back to the file of the CIT(A) for fresh adjudication after proper verification of facts and affording a reasonable opportunity of being heard to the assessee. Hence, ITA No. 314/Coch/2025 is allowed for statistical purposes.
As the facts and issues are identical to those in our decision in that appeal shall apply mutatis mutandis to this appeal also. Accordingly ITA No. 315/Coch/2025 is also allowed for statistical purposes.
In the result, both the captioned appeals of the revenue are allowed statistical purposes. Order pronounced in the open court on 13.06.2025.
Sd/- Sd/- (INTURI RAMA RAO) (SANJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin, Dated: 13.06.2025