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Facts
The assessee filed an appeal against the order of the CIT(A). The assessee later requested to withdraw the appeal, stating that the revised demand was small and they decided to pay it to avoid further litigation. The assessee had paid the revised demand.
Held
The assessee's request for withdrawal of the appeal was accepted, and the appeal was dismissed as withdrawn. The primary issues revolved around the assessee being considered an 'assessee in default' and the levy of interest under section 201(1A) of the Income-tax Act, 1961.
Key Issues
Whether the assessee was an 'assessee in default' and liable for interest under section 201(1A), and whether the impugned order by the Ld. CIT(A) was valid.
Sections Cited
250, 201(1), 201(1A), 40(a)(ia)
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Before: SHRI PAVAN KUMAR GADALE & SMT. RENU JAUHRI
Appellant by : Shri Dinesh Patil Respondent by : Shri Biswanath Das Date of Hearing 25.06.2024 Date of Pronouncement 02.07.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-
This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-60/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 23.02.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2018-19.
The assessee has raised following grounds of appeal:
P a g e | Tata Communications Collaboration Services Pvt. Ltd. "1. The impugned order passed by Ld. CIT(A) is invalid and bad in law 1.1 On the facts and circumstance of the case and in law, the order dated February 23, 2024 passed under section 250 of the Income-tax Act, 1961 ('the Act'), by the Commissioner of Income-tax (Appeals) Addl./JCIT-4, Bengaluru (hereinafter referred as Hon'ble CIT(A)'), is incorrect, illegal, bad in law and hence ought to be struck down.
2. Considering the Appellant as an 'assessee in default' u/s. 201(1) of the Income-tax Act, 1961 ('the Act'): 2.1 On the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the order dated February 20, 2020 passed under section 201(1)/201(1A) of the Act by the Income Tax Officer (TDS, 2(3)(4), Mumbai (hereinafter referred as 'Ld. TDS officer') as the Appellant has duly complied with the TDS provisions, wherever applicable vis-à-vis the impugned amount of Rs. 10,82,66,163/- and hence, the Appellant cannot be considered as an "assessee in default" for the same. 2.2 On the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in not appreciating the submissions made by the Appellant and thereby ignoring a vital fact that the whole amount of Rs. 10,82,66,163/- was already disallowed by the Appellant in its income- tax return of the relevant year thereby paying income-tax thereon at the corporate tax rate by applying the provisions of section 40(a)(ia) of the Act and hence it is not a case that the said amount has escaped taxation. 2.3 On the facts and circumstances of the case and in law prevailing on the subject, the Hon'ble CIT(A) has grossly erred in not considering the submissions made by the Appellant as regards the incorrect and erroneous stand taken by the Ld. TDS officer in his order dated February 20, 2020 passed under section 201(1)/201(1A) of the Act.
3. Levy of interest u/s, 201(1A) of the income-tax Act, 1961: 3.1 On the facts and circumstances of its case and in law, the Hon'ble CIT(A) erred in not appreciating the fact that the Appellant has appropriately deducted tax at source, wherever required, and hence P a g e | Tata Communications Collaboration Services Pvt. Ltd. there can be no question of there being any default whatsoever and accordingly no interest u/s. 201(1A) of the Act can be levied. 3.2 On the facts and circumstances of the case and in law, appropriate directions be given by the Hon'ble ITAT to delete the interest levied on the Appellant u/s. 201(1A) of the Act. Without prejudice to the foregoing: 3.3 On the facts and circumstances of the case and in law, the Hon'ble CIT(A) erred in not appreciating the fact that interest u/s. 201(1A) of the Act calculated by the Ld. TDS Officer is not in accordance with the law prevailing on the subject."
At the outset, the Ld. AR has submitted a request vide letter dated 24.06.2024 for withdrawal of appeal. It is stated that the Ld. CIT(A) had accepted the alternate arguments of the assessee and given directions to TDS AO to check the TDS compliances made for the year-end provisions after the year-end. After considering the requisite documents furnished by the assessee, the TDS AO has passed an order dated 02.06.2024 giving effect to the directions of Ld. CIT(A) and demand payable has been revised to Rs. 1,58,618/-. In this regard, the assessee has submitted as under: "Considering the smallness of the revised demand payable by the Appellant as against the time, cost and efforts for contesting this appeal before the Appellate Authorities, the management decided to pay the revised demand and withdraw the appeal preferred before your Honours. The Appellant has paid this revised demand and the challan evidencing this payment of tax is attached herewith as Annexure 2. We submit that withdrawal of this appeal is only to avoid and minimize litigation for the Appellant considering smallness of the tax demand and should not be construed as acceptance by the Appellant of the stand taken by the TDS AO."
P a g e | Tata Communications Collaboration Services Pvt. Ltd. 4. In view of the above submissions, assessee’s appeal is hereby dismissed as withdrawn. 5. In the result, the appeal of the assessee is dismissed.