ITO, W-6(1), MOHALI vs. SH. NIRANKAR SINGH, MOHALI

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ITA 433/CHANDI/2018Status: DisposedITAT Chandigarh27 July 2018AY 2014-153 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that PUDA, being established by a State Act, falls under the notification exempting such institutions from TDS. Therefore, the disallowance made by the Assessing Officer was incorrect.

What were the facts?

The Revenue appealed the deletion of a disallowance made under Section 40(a)(ia) for non-deduction of TDS on interest paid to PUDA. The assessee argued that Section 194A(3)(iii)(f) exempts certain notified institutions from TDS requirements.

What were the issues?

Whether TDS was required to be deducted on interest paid to PUDA, a statutory authority, under Section 194A of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCHES, ‘B’ CHANDIGARH

Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA

Hearing: 10.07.2018Pronounced: 01.08.2018

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the Revenue against the order dated 18.01.2018 of the Commissioner of Income Tax (Appeals)-2, Chandigarh [hereinafter referred to as CIT(A)].

2.

The sole issue raised in this appeal by the Revenue is regarding the action of the CIT(A) in deleting the disallowance made by the Assessing officer u/s 40(a)(ia) of the Income-tax Act, 1961 (in short 'the Act') for non- deduction of TDS as per the provisions of section 194A of the Act on the interest payment made by the assessee to Punjab Urban Development Authority (PUDA). At the outset, Ld. Counsel for the assessee has invited our attention to the provisions of sub clause (f) of sub clause (iii), sub-section (3) of section 194A of the Act. The provisions of sub section (3) requiring an

2 ITA No.433-c-2018- Shri Nirankar Singh, Mohali

assessee to deduct TDS on interest payment is not applicable to such

institutions, associations or bodies which the Central Government may notify

in this behalf in the office gazette. As per the Notification dated 22.10.1970,

issued by the Central government any corporation established by the Central /

State or Provincial Act is notified for the purpose of sub clause (f) of clause

(iii) or sub section (3) of section 194A of the Act. It has been further

submitted that the payment in this case has been made to PUDA which has

been established by the State Act namely Punjab Regional and Town Planning

and Development Act, 1995. The issue, thus, is squarely covered by the

decision of the Coordinate Chandigarh Bench of the Tribunal in the case of

M/s Sukham Infrastructure Ltd. Vs. ITO’ in ITA No.. 638/Chd/2015 & others

dated 07.06.2018. Moreover, the issue is now squarely covered by the decision

of the Hon'ble Supreme Court in the case of ‘CIT (TDS) & Anr Vs. Canara

Bank’ Civil appeal No. 6020 of 2018 vide order dated 2.7.2018.

3.

In view of this, we do not find any infirmity in the order of the CIT(A)

and deleting the addition so made by the Assessing officer. Moreover, the tax

effect in the case in hand is less than prescribed limit of Rs. 20 lacs, as per the

latest CBDT Circular 3/2018 dated 11.7.2018, which is applicable

retrospectively to the pending appeals also. Thus on this score also, the

appeal is liable to be dismissed.

In the result, the appeal of the Revenue is hereby dismissed. Order pronounced in the Open Court on 01.08.2018

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 1.8.2018 Rkk

3 ITA No.433-c-2018- Shri Nirankar Singh, Mohali

Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR

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