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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SHRI. N. K. SAINI & SHRI K. NARASIMHA CHARY
O R D E R PER K. NARASIMHA CHARY, JM These two appeals are filed by the assessee, namely, M/s InterGlobe Aviation Ltd. challenging the order dated 11.3.2015 in Appeal Nos. 354 & 355/14-15 passed by the learned CIT(A)-18, New Delhi in respect of Quarter Nos.2 & 3 of Assessment Year 2013-14.
2 2. Brief facts of the case are that the assessee received an order of low tax deduction certificate (in short “LTDC”) dated 31st May, 2013 u/s 197 of the Income-tax Act, 1961 (“the Act”) issued by the learned AO of M/s Federal Travel and Tours P. Ltd. Assessee claims to have deducted the TDS as per the TDS rate specified in such order. However, subsequently, the assessee received notice of demand in respect of short deduction of TDS on payment made to M/s Federal Travel and Tours P. Ltd. and according to the assessee, the said notice was not in consideration of the low tax deduction certificate issued by the learned AO. However, subsequently, the assessee verified on the online portal of the CPC about the status of the LTDC and came to know that LTDC was cancelled on the same day. However, assessee submits that neither the assessee nor the third party has received the cancellation order and such an order has never seen the light of the day.
When the assessee preferred the appeal, learned CIT(A) in respect of Quarter No.4 for Asstt. Year 2014-15 recorded a finding that the information regarding LTDC certificate should be conveyed to the deductor and any cancellation or modification thereof should also have been communicated by the Department to the deductor but as a common practice, it has been issued to the deductee. While recording so, learned CIT(A) presumed that any modification or cancellation of certificate would have been intimated by the department to the deductee and it was the duty of the deductee to inform the assessee regarding the changes in the limit or validity of the LTDC issued by the department. Learned CIT(A), therefore, proceeded to hold the assessee as deductor for short deduction of TDS and fastened the assessee with liability to pay interest u/s 201(1A) of the Act of short deduction.
3 4. The assessee is, therefore, in these two appeals in respect of Quarter Nos. 2 & 3. It is the submission of the learned counsel for the assessee that for want of either pleading or proof that any cancellation order has ever been communicated either to the deductee or to the deductor of the low tax, the assessee cannot be fastened with the liability of interest u/s 201(1A) of the Act. It is further submitted that it is the responsibility of the party who asserts the existence of such fact, has to prove it. The learned counsel submitted that since it is the department which holds in their custody the evidence as to the passing of the order of communication, has to produce such evidence and prove the fact of either passing of the cancellation order or communication thereof.
The learned DR, on the other hand, relied on the orders of the authorities below.
We have heard both the parties and gone through the record. There is no denial of the fact that the AO of M/s Federal Travel and Tours P. Ltd. had issued the LTDC dated 31.5.2013 u/s 197 of the Act to M/s Federal Travel and Tours P. Ltd. The online portal of the CPC also shows that the said certificate was cancelled on the very same day of the issuance. Contention of the assessee is that when a physical copy of the certificate was issued, it is incumbent upon the authorities to issue the cancellation also in the same way and should have communicated the same either to the third party or to the assessee, as the case may be.
It is seen that learned CIT(A) in assessee’s own case for the very same assessment year but in relation to the 4th quarter observed that the contention of the assessee that information regarding lower TDS certificate and the cancellation or modification should have been conveyed to the deductor, was 4 acceptable. It was, however, further recorded by the learned CIT(A) that it cannot be ignored that as a practice, lower TDS certificate are issued to the deductee, as the deductee being the interested party makes application for issue of such certificate. Learned CIT(A) further recorded that any modification or cancellation of such certificate will be intimated by the department to the deductee and it is the duty of the deductee or the payee to inform the deductor regarding any change in the limit or validity of the LTDC issued by the Department. As seen from the record, in this case also no evidence is produced by either party to establish that the cancellation order was ever passed or was communicated either to the deductee or the deductor. The learned CIT(A) recorded a finding that in view of the details and facts and legal position in the case of the assessee and in the absence of conclusive proof of withdrawal of certificate for lower deduction of tax, there is short deduction of tax at the end of the assessee but as the assessee has already paid tax and filed returns, directed to delete the demand on account of short deduction with a rider that the AO should verify the records.
In view of the above, we are of the considered opinion that the allegation of the assessee that no cancellation order has ever been passed and communicated either to the deductee or to the deductor of the low tax needs verification at the end of the Ld. AO, and for such purpose we deem it just and necessary to set aside the order of the CIT(A) and remand the matter back to the file of AO for verification. If no such order was passed and communicated either to the deductee or to the deductor, it shall be construed that the assessee has complied with the requirement of the order dated 31.5.2013 u/s 197 of the Act, and the impugned addition shall stand deleted.