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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
These appeals by the assessee are directed against the order of the Commissioner of Income Tax Appeal Add/JCIT (A) Ranchi [hereinafter referred to as “Ld.CIT(A)”] vide order dated 10.10.2025 for the Assessment Years 2017-18 and 2018-19.
Since the issue are common and the appeals are connected, hence the same are heard together and being disposed of by this common order. We take ITA NO 998/Del/2026 for A.Y. 2017-18.
The assessee has raised the various grounds in appeal:
On facts and circumstances of the case and in law, the order passed by the Assessing Officer is bad in-law and CIT(A) erred in not holding so.
On facts and circumstances of the case and in law, the assessing officer has erred in computing the TDS rate @ 10 instead of TDS @ 2 and CIT(A) erred in not holding so.
On facts and circumstances of the case and in law, the CIT(A) erred in confirming the demand raised by the assessing officer of Rs.91,314 on account of TDS rate of 10% u/s 194I.
On facts and circumstances of the case and in law, the assessing officer in providing no opportunity of being heard before levying TDS @ 10% with penalty.
On facts and circumstances of the case and in law, the assessing officer has erred in charging interest u/s 201(1A) / 154 of Rs.36.065/- of Income Tax Act, 1961.
On facts and circumstances of the case and in law, CIT(A) confirmed the raised by the assessing officer of Rs.1,27,379/-.
The brief facts of the case are that groups of mall owners have recovered expenses being in the nature of A/c Maintenance., House-keeping Security etc. from the occupants in the form of Common Area Maintenance. The deductors have been deducting TDS at 2% being considering the same to be covered under the provisions of section 194C of the Income Tax Act, 1961(in short “the Act”). According to AO the tax should be deducted @10% instead of @ 2% under section 194I of the Act. Accordingly, proceedings under section 201(1) (1A) of the Act were initiated by issuing show cause notices. The Assessing Officer completed the order under section 201(1) /201(1A) of the Act and raised the demand of the tax with interest from the assessee.
Aggrieved the order from the Assessing Officer the assessee preferred the appeals which were dismissed by the Ld. CIT(A). Being aggrieved the order the assessee is in appeal before the tribunal.
The Ld. AR of the assessee submitted that case is squarely covered from the Assessee’s own case for the A.Y. 2011-12 & 2015-16. The Ld. DR relied upon the orders of the lower authorities. In the Assessee’s own case in ITA No.5062/Del/2024 & ITA no.5063/Del/2024 for A.Y.2011-12 & 2015-16 the Co-ordinate bench allowing the appeal held as under:
4.It is in this factual backdrop that the Revenue vehemently argues before us that there was a composite agreement for rent as well as common area maintenance charges which attracts the impugned higher rate of TDS deduction u/s 194I of the Act in light of Sunil Kumar Gupta (2016) (9) TMI 1198 (P&H). We note that this tribunal in Connaught Plaza Restaurants P. ltd. Vs. DCIT in ITA Nos. 993 & 1984/2020 and Kapoor Watch Company Pvt. Ltd. Vs. ACIT in ITA No. 889/Del/2020 has already settled the very issue in assessee’s favour and against the department, regarding TDS deduction of such common area maintenance charges as under:
“13.In the backdrop of our aforesaid deliberations, we concur with the claim of the Ld. AR that as the payments towards CAM charges are in the nature of contractual payments that are made for availing certain services/facilities, and not for use of any premises/equipment, therefore, the same would be subjected to deduction of tax at source u/s 194C of the Act. Our aforesaid view is supported by the order of the ITAT, Delhi in the case of Kapoor Watch Company Pvt. Ltd. vs. ACIT in ITA No.889/Del/2020. In the aforesaid case, the genesis of the controversy as in the case of the assessee before us were certain proceedings conducted by the Department in the case of Ambience Group (supra) to verify the compliance of the provisions of Chapter XVII-B of the Act. On the basis of the facts that had emerged in the course of the proceedings, it was gathered by the Department that the owners of the malls in addition to the rent had been collecting CAM charges from the lessees on which TDS was deducted 2% i.e. u/s 194C of the Act. Observing, that payment of CAM charges were essentially a part of the rent, the AO treated the assessee as an assessee-in-default for short deduction of tax at source u/s 201(1)/201(1A) of the Act. On appeal, it was observed by the Tribunal that the CAM charges paid by the assessee did not form part of the actual rent that was paid to the owner by the assessee company. As the facts involved in the case of the assessee before us remains the same as were therein involved in the aforesaid case, therefore, in the backdrop of our aforesaid deliberations, and respectfully following the aforesaid order of the Tribunal, we hold that, as claimed by the assessee, and rightly so, the CAM charges paid by it were liable for deduction of tax at source @2%, i.e., u/s 194C of the Act. We, thus, in terms of our aforesaid observations set-aside the order of the ld. CIT(A) who had approved the order passed by the AO treating the assessee company as an assessee-in-default u/s 201(1) of the Act. The grounds of appeal no. 4 to 4.5 are allowed in terms of our aforesaid observations.”
5.We adopt the above extracted detailed reasoning mutatis mutandis to reverse the lower authorities action treating the assessee as the assessee in default u/s 201(1) of the Act in very terms. Ordered accordingly.
6.These assessee’s twin appeals ITA Nos. 5062 & 5063/Del/2024 are allowed in above terms. A copy of this common order be placed in the respective case files.
The assessee’s appeals are squarely covered from the assessee’s own case. Respectfully following the precedents, we allow the appeals in the above terms.
In the result, both the appeals of the assessee are allowed in the above terms.
Order pronounced in the open court on 15.07.2026.