ITO(TDS), MORADABAD vs. M/S. EXECUTIVE ENGINEER, RAEBAREILLY

The aforesaid appeal has been filed by the Revenue against impugned order dated 23.4.2014, passed by the ld. CIT (Appeals), Bareilly in relation to proceedings u/s 201(1)/201(1A). In the grounds of appeal Revenue has raised following grounds of appeal:- “1-The Ld. CIT (Appeal), Bareilly has erred in facts and law by quashing the orders of the ITO (TDS) Moradabad u/s 201(1)/201(1A) and allowed relief of Rs, 14,15,020/-, 19,61,780/- & 6,83,130/- on the ground that he had no territorial jurisdiction over the assessee. TAN of the deductor Page 1 of 6

The brief facts of the case are that the assessee, who is, Executive Engineer First Construction Division, UP Jal Nigam, is based at Raibareilly district who had filed the e-TDS return. The JCIT (TDS) Bareilly noted that the said TDS statement as reported by the deductor and the information available as per bank challans details, there are certain discrepancy and after analyzing observe that there is either nonpayment of TDS or there is low deduction of TDS. Accordingly, on the basis of such defect he treated the assessee as ‘assessee in-default’ u/s 201 also levied interest u/s 201(1A) for sums aggregating to Rs. 14,15,020/-.

The Ld. CIT (Appeals) Bareilly held that due to technical errors and system problem in feeding the challans, the assessee was treated as ‘assessee in-default’. He further noted that the assessee is situated in district Raibareilly, whereas ITO TDS, Moradabad has passed the order u/s 201(1)/201(1A), who is in charge of JCIT TDS, Bareilly. He accordingly asked him to provide all the information regarding his jurisdiction over the Raibareili district. In response, the JCIT TDS Bareilly submitted that ITO (TDS) Moradabad has co- terminus territorial jurisdiction with CIT Moradabad and CIT Bareilly. However the ld. CIT (Appeals) observed that he specifically wanted to know the jurisdiction ITO TDS Moradabad upon the district in Raibareilly and not Bareilly and he categorically observed that nothing has been brought on record to suggest that the jurisdiction of ITO TDS Moradabad was over the district of Raibareilly on the date of passing of the order. He held that the proper jurisdiction of the assessee lied with CIT Faizabad and therefore, the order passed by ITO TDS Moradabad who was under JCIT (TDS), Bareilly, was without jurisdiction and accordingly quashed the order of the ITO TDS.

Now before us, a letter has been submitted by the assessee stating that whatever technical default reported was in CPC TDS site has now been rectified by the department and all the challans are matching with uploaded TDS amount. In view of this fact, the assessee could no longer be treating as ‘assessee in default’, because not only the TDS has been deducted but same has been paid and upload also. The relevant photo copy of the said letter is pasted here with:-

Now in wake of aforesaid letter and the fact that technical default has been rectified by the department, therefore, we do not want to enter into the issue of jurisdiction and direct the Assessing Officer to verify the said submission of the assessee along with the copy of TDS traces and bank challans and if the said mistake has been rectified, then the assessee may not be treated as ‘assessee in- default’ and consequently also decide the issue interest u/s 201(1A). The appeal of the revenue is accordingly partly allowed for statistical purposes. Page 4 of 6