M/S C CENTRIC SOLUTIONS PVT LTD ,BANGALORE vs. ASSISTANT COMMISSIONER OF INCOME TAX TDS,CPC, GHAZIABAD

The assessee is a private limited company engaged in the business of design and developing, marketing & supporting various services including providing programming, conversions, electronic data, software development, sales & marketing, supporting & maintenance and other technical services to new and established Information Technology companies, network service providers, etc. The assessee has availed services from M/s. CDC Software Singapore Pte Ltd., Singapore and M/s. Pivotal Technologies Pvt. Ltd., Ireland. It made payment for these services which were in the nature of fees for technical services. Tax was deducted at source @ 10%.

Orders u/s. 200A of the Income-Tax Act, 1961 [“the Act”] were passed by the TDS-Central Processing Cell (CPC) of the Income Tax Department for the impugned assessment years 2011-12, 2013-14, 2015- 16 & 2016-17 holding that TDS ought to have been deducted @ 20% as per section 195(1) r.w.s. 206AA of the Act, since the deductee did not have a PAN as per the provisions of the Act. Accordingly, a demand was raised for short deduction of tax and interest was levied thereon.

The assessee submits that these orders passed u/s. 200A of the Act by the TDS-CPC were never served on the assessee physically or otherwise and hence the assessee was not aware of the fact that such orders were passed in its case. He states that there was no communication whatsoever even through electronic media on the issue of passing of orders mentioned above. The assessee submits that only when the demands were sought to be collected by the revenue, the assessee came to know of these orders.

On coming to know of these demands, the assessee filed appeals before the ld. CIT(Appeals) for all the assessment years. The ld. CIT(A) dismissed these appeals by holding as follows:-

Before us, the ld. counsel for the assessee submitted that no orders u/s. 200A was served on the assessee till date and hence the question of filing of the appeal with delay and seeking condonation of delay does not arise. It was submitted, on coming to know of such orders which have been uploaded in the portal of Income Tax Department by the TDS- CPC, the assessee had filed the appeals immediately and hence there is no delay. He pleaded that the issue may be sent back to the file of the AO for fresh consideration of the matter on merits, as none of the authorities have given an opportunity to the assessee and looked into the matter on merits.

The ld. DR, Mr. H. Ananda, on the other hand, though not leaving his ground, submitted that the issue may be restored to the file of the ld. CIT(Appeals).

After hearing the rival contentions, we are of the considered view that there is no delay in filing of the appeal by the assessee, as no order u/s. 200A of the Act for all these years, has been physically served on the assessee till date. These orders have not also been served electronically. Hence the question of delay in filing the appeals does not arise. The appeals, in our view, have been filed within the period of limitation.

The ld. CIT(Appeals) could not have dismissed the appeals for the reason that order u/s. 200A was not uploaded along with Form 35. Defects, if any, could have been rectified by giving notice to the assessee. The assessee is given liberty to download these orders from the portal of the Income Tax Department and file the same before the ld. CIT(A) electronically or otherwise. The third ground on which the CIT(A) has dismissed the assessee’s appeal is that separate appeals were not filed against each order. This defect should have also been brought to the notice of the assessee and an opportunity given to rectify the same. Liberty is granted to the assessee to file separate appeals as required by law.

The ld. CIT(A) nor any authority had considered all these issues on merits and disposed of the same in accordance with the law. Only the Computer has processed the orders. Under the circumstances, in our view, it would meet the ends of justice if all the orders u/s. 200A of the Act are set aside and matter restored to the file of the AO, to issue notice to the assessee, consider its objections on the matter and thereafter dispose of the cases on merits in accordance with law. Hence, we set aside all the impugned orders passed u/s. 200A of the Act for all these years and restore the matter to the file of the Assessing Officer for fresh adjudication in accordance with law.

In the result, all these appeals are allowed for statistical purposes.