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Judgment
PER MANISH AGARWAL, A.M.:
The present appeal is filed by assessee against the order dated 30.06.2025 passed by Ld. Commissioner of Income Tax (A)/ADDL/JCIT(A)-1, Surat [“Ld. CIT(A)”] in Appeal No. NFAC/2013-14/10016493 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of order dated 26.03.2021 passed u/s 201(1) r.w.s 201(1A) of the Act pertaining to Assessment Year 2014-15.
Brief facts of the case are that order u/s 201/201(1) of the Act was passed by AO dated 26.03.2021 holding that the assessee was in default by not deducting tax at source on the Common Area Maintenance charges [“CAM”] u/s 194 I as against has made deduction u/s 194C of the Act @ 2% thus, there is a shortfall of TDS of INR 32,82,507/- and interest u/s 201(1A) of INR 29,70,682/-. Accordingly, total demand of INR 62,53,189/- was created.
Aggrieved by the said order, the assessee filed an appeal before the ld. CIT(A) who vide impugned order dated 30.06.2025, partly allowed the appeal of the assessee wherein ld. CIT(A) though had confirmed the demand created u/s 201(1) however, reduced the interest u/s 201(1A) of the Act.
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 wherein Grounds of appeal No. 1 & 2, it is stated the issue is squarely covered by the decision of Co-ordinate Bench in assessee’s own case for AY 2012-13 in ITA No. 1115/Del/2020 vide order dated 03.10.2022.
Heard the contentions of both parties at length and perused the material available on record. As observed above, in Grounds of appeal Nos. 1 & 2 raised by the assessee, it was claimed that this issue is decided in favour of the assessee by the Co-ordinate Bench wherein the Co-ordinate Bench has held that CAM charges are covered u/s 194C and therefore the assessee has rightly deducted the tax at source @ 2% u/s 194C of the Act and not @ 10% u/s 194(1) of the Act. The relevant observations of the CO-ordinate Bench in para 6 of the order are as under:-
6.“The undisputable fact in this case is that while the lease rentals are paid based on a fixed percentage on the net revenue, the CAM charges are based on the per sq . ft. area. The observation of the ld. CIT(A) is that the rent by any name , lease , sub-lease , tenancy or the reliance on the judgment wherein the services are intrapolated into the rent stand on a different pedestal. In the instant case , the determination of the rent or CAM are separate and the CAM arrangements are not essential and an integral part for use of the premises. While there are no expenses incurred against the rent except for general building maintenance and municipal charges, the CAM involves employment of separate staff and separate operations involved on day to day basis. Hence, we hold that the provisions for rent are governed by Section 194I and CAM charges by Section 194C of the Act. The AO is directed to re-compute the CAM charges, taking into consideration the two sections mentioned above.”
As could be observed that Co-ordinate Bench has already held that CAM charges are governed by the provision of section 194C of the Act therefore, the assessee is liable to deduct the tax at source u/s 194C. Accordingly, Ground of appeal Nos. 1 & 2 raised by the assessee are allowed.
The remaining Grounds of appeal of the assessee are consequential in nature hence, not adjudicated.
In the result, appeal of the assessee is allowed.