SOVEREIGN PHARMA PRIVATE LIMITED,PUNE vs. DCIT CPC TDS, PUNE

PER SATBEER SINGH GODARA, J.M. :

This assessee’s appeal for assessment year 2019-2020,

arises against the National Faceless Appeal Centre [in short the

“NFAC”] Delhi’s Din and Order No.ITBA/NFAC/S/250/2023-

24/1056347841(1), dated 21.09.2023, involving proceedings u/s.

200A of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties. Case file perused.

the instant appeal :

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3 ITA.No.1216/PUN./2023 2.1. Learned counsel further invited our attention to the

assessee’s additional ground in the instant appeal reading as

under:

assessee’s foregoing additional ground by raising technical objection

that same could not be allowed at this belated stage. This tribunal’s

Special Bench decision in All Cargo Global Logistics Ltd. vs. DCIT

[2012] 137 ITD 287 (Mum.) (SB) has settled the law in light of

National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC),

we can very well entertain an additional ground going to root of the

matter in order to determine correct tax liability of the assessee

provided all the relevant facts are already on record. The assessee’s

foregoing additional ground hardly meets any factual verification.

The same stands admitted.

attention to the NFAC’s detailed discussion declining the assessee’s

lower appeal as under :

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We now advert to the relevant facts.

assessee-deductor had paid salary/fixed remuneration to it’s

Managing Director Mr. Kairus Dadachanji @ 20% of the net profits.

It admittedly credited the impugned sum in the corresponding

salary account on 31.03.2019 followed by actual payment thereof

on 25.07.2019. There is hardly any issue between the parties that

in the event of TDS deduction u/sec.192 of Chapter-XVII of the Act

in case of salary reimbursement(s), applies “at the time of payment”

only.

the assessee had filed it’s TDS return in form-24Q regarding the

impugned salary. A perusal of the impugned processing dated

18.08.2019 [pages 7 to 8] in the case record indicates that the

CPC’s intimation u/sec.154 of the Act proceeded on the basis of

assessee’s date of credit of the foregoing remuneration i.e.,

8 ITA.No.1216/PUN./2023 31.03.2019 to raise the corresponding demand of Rs.5,16,892/- in

the nature of “additional late deduction/collection default”

u/sec.201(1A) of the Act. Needless to say, the learned NFAC has

gone a step further in holding that the assessee’s remuneration

paid to Mr. Kairus Dadachanji in fact amounts to commission

requiring TDS deduction u/sec.194(1)(ba) of the Act.

This leaves the assessee aggrieved.

assessee’s additional ground challenging learned NFAC’s

jurisdiction in changing head of it’s payment from salary disclosed

in form-24Q to commission in proceedings u/sec.154 r.w.s.200A of

the Act. Learned counsel invited our attention to the corresponding

specific statutory provision regulating processing of the TDS

statements u/sec.200A of the Act reading as under :

“200A. (1) Where a statement of tax deduction at source or a

correction statement has been made by a person deducting any

sum (hereafter referred to in this section as deductor)

under section-200, such statement shall be processed in the

following manner, namely:—

(a) the sums deductible under this Chapter shall be computed

after making the following adjustments, namely:—

(i) any arithmetical error in the statement; or

(ii) an incorrect claim, apparent from any information in the

statement;

9 ITA.No.1216/PUN./2023 (b) the interest, if any, shall be computed on the basis of the

sums deductible as computed in the statement;

(c) the fee, if any, shall be computed in accordance with the

provisions of section-234E;

(d) the sum payable by, or the amount of refund due to, the

deductor shall be determined after adjustment of the amount

computed under clause (b) and clause (c) against any amount

paid under section-200 or section-201 or section-234E and

any amount paid otherwise by way of tax or interest or fee;

(e) an intimation shall be prepared or generated and sent to

the deductor specifying the sum determined to be payable by, or

the amount of refund due to, him under clause (d); and

(f) the amount of refund due to the deductor in pursuance of

the determination under clause (d) shall be granted to the

deductor:

Provided that no intimation under this sub-section shall be

sent after the expiry of one year from the end of the financial

year in which the statement is filed.

Explanation.—For the purposes of this sub-section, "an

incorrect claim apparent from any information in the statement"

shall mean a claim, on the basis of an entry, in the statement—

(i) of an item, which is inconsistent with another entry of the

same or some other item in such statement;

(ii) in respect of rate of deduction of tax at source, where such

rate is not in accordance with the provisions of this Act.

10 ITA.No.1216/PUN./2023 (2) For the purposes of processing of statements under sub-

section (1), the Board may make a scheme for centralised

processing of statements of tax deducted at source to

expeditiously determine the tax payable by, or the refund due

to, the deductor as required under the said sub-section.”

provision is that the NFAC has no jurisdiction to change the “head”

of the corresponding TDS provision; and more particularly; from

“salary u/sec.192” to “commission u/s.194A” of the Act in these

facts and circumstances.

is that such an enhancement falls within the inherent jurisdiction

of the lower appellate authority.

the Revenue’s arguments supporting the learned NFAC’s foregoing

directions invoking sec.194A qua assessee’s salary payment(s)

attracting TDS deduction u/sec.192 of the Act as sec.200A appears

to be in the nature of a complete code in itself for the purpose of

processing of TDS returns. Faced with this situation, we invoke

stricter interpretation thereof as per Commissioner of Customs vs.

Dilip Kumar And Co. & Ors. [2018] 0 SCC 1 (SC) (FB). And that

sec.200A of the Act is a specific provision having overriding effect

over all other general provisions going by the principle of ‘Generalis

Specialibus non Derogant’.

11 ITA.No.1216/PUN./2023 11. The Revenue’s next plea is that nothing prevents the

learned field authorities to make such an adjustment in case of an

incorrect claim u/sec.200A(a)(ii) r.w.s. Explanation (ii) thereof. It’s

instant latter plea is also found to be devoid of merits once

Explanation-(i) and (ii) to Sec.200A itself specify the scope thereof to

any mutually inconsistent items vis-à-vis another entry in form-

24Q or qua rate of deduction; respectively. There is no indication

that sec.200A “processing” could in any way change head of the

TDS applicability; whatsoever. We thus conclude that once the

assessee having deducted TDS u/sec.192 of the Act “at the time of

payment”; the CPC’s intimation going by the date of credit i.e.,

31.03.2019 (supra) as well as the NFAC’s impugned action

changing “salary” head to “commission”, have erred in law and on

facts in raising the demand in issue. The same stands reversed. We

accept the assessee’s foregoing main as well as additional ground(s)

in very terms. Ordered accordingly.

No other ground/argument has been pressed before us.

Order pronounced in the open Court on 08.05.2024.

Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER

Pune, Dated 08th May, 2024

VBP/-

12 ITA.No.1216/PUN./2023 Copy to

Sr. Private Secretary, ITAT, Pune Benches, Pune.