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Judgment
PER MANISH AGARWAL, AM :
The present appeal is filed by assessee against the order dated 22.11.2024 by Ld. Commissioner of Income Tax (A)-24, New Delhi [“Ld.CIT(A)”] in Appeal No. CIT(A), Delhi-24/10452/2016-17 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of order dated 25.11.2022 passed u/s 201(1)/201(1A) of the Act pertaining to Assessment Year 2017-18.
Brief facts of the case are that assessee is a company, engaged in the business of construction of building. A survey was carried out u/s 133A at the business premises of the assessee company on 06.02.2017. During the course of survey, on verification of the books of accounts of the assessee, it was found that assessee has not deducted or late paid the tax at source on many payments. Accordingly, an interim order was passed u/s 201(1)/201(1A) of the Act on 27.02.2017 wherein the assessee was held as “assessee in default” for late payment/non-payment/non deduction of TDS of INR 2,37,86,387/-. The AO observed that assessee has made payment of INR 12,15,26,513/- to various parties on which the provisions of section u/s 194A are applicable without making any TDS and therefore, raised the demand of INR 1,21,52,652/- u/s 201(1) of the Act and further charged interest u/s 201(1) of INR 87,17,970/- on the same. Besides this, as per Tax Audit Report, assessee has deducted TDS of INR 1,27,29,461/-which has not been deposited therefore, besides the principal of INR 1,27,29,461/-, interest u/s 201(1A) of INR 1,36,82,607/- was charged. Further, as per Tax Audit Report, assessee has deducted a sum of INR 2,16,08,154/- out of which a sum of INR 1,20,17,661/- was not deposited, therefore, alongwith this principal amount, interest of INR 1,44,21,193/- was charged and accordingly, total demand of INR 7,37,21,538/- was created against the assessee by holding it as the “assessee in default”.
Against the said order, assessee filed an appeal before Ld. CIT(A) wherein it was claimed by the assessee that Auditor by mistake has observed that certain amounts were not deposited however, they were deposited in time. However, ld. CIT(A) has not accepted the contentions of the assessee and vide impugned order dated 22.11.2024, dismissed the appeal of the assessee.
Aggrieved by the order of Ld.CIT(A), assessee is in appeal before the Tribunal by taking various grounds of appeal mentioned in the appeal memo.
Before us, Ld. AR for the assessee submits that assessee has paid interest to India Bulls Housing Finance Ltd. on which TDS was not deducted and also filed certificate issued by the Auditor in Form 26A which is available at pages 97 to 99 of the Paper Book. It is submitted that AO has treated the assessee in default for on three occasions for a single default which are as under:-
not deducting the tax;
deducted but not deposited the tax ; and
deducted and partly deposited the tax.
Ld. AR submits that assessee has filed all the relevant details alongwith challan and requested that the matter may be sent to the Ao for verification of the facts.
On the other hand, Ld. Sr. DR for the Revenue supported the orders of the lower authorities and submits that in the instant case, Auditor has pointed out at Item No.34A that there was an outstanding amount of INR 1,20,17,661/- i.e. amount deducted u/s 194A but not deposited. Therefore, the contention raised deserves to be dismissed and demand created by the Ao be sustained.
Heard the contentions of both parties at length and perused the material available on record. Before us, it was the claim of the assessee that part of TDS was deducted and deposited however, in the case of payment of interest to India Bulls Housing Finance Ltd., a certificate in form 26A is produced certifying that it had included the amount of interest paid by the assessee in its total income this amount and paid taxes thereon therefore, the assessee should not be treated as assessee in default.
After considering the overall facts and the discussion made herein above, we set aside the orders of the lower authorities and remanded this issue back to the file of AO with the direction to verify the certificate filed by the assessee regarding payment of Tax by India Bull Housing Finance Ltd., that it has the interest passed by the assessee in its total income and paid taxes thereon and if the said certificate is found in order, the assessee should not be treated as “assessee in default” on this issue. Regarding the claim of the assessee that non-deduction of TDS on interest paid is taken thrice by the AO also be verified and if the contention of the assessee is found correct no demand be created for the same. Accordingly, all the Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.