The Income Tax Appellate Tribunal (ITAT), Delhi Bench held that the Indian Newspaper Society is not required to deduct tax at source (TDS) in respect of lease premium payment.
The Assessee, M/s The Indian News Paper Society is a company registered under section 25 of the Companies Act, 1956. It is a non-profit-making company formed with the object of functioning as an apex organization to protect the interest of the press in India.
The Assessing Officer passed an order under section 201(1) or 201(1A) of the Income Tax Act wherein the AO held that the assessee company had failed to deduct tax at source under section 194I in respect of lease premium amounting to Rs. 13,81,17,243 paid to Mumbai Metropolitan Regional Development Authority (MMRDA).
The AO treated the assessee to be in default under sections 201(1) or 201(1A) t in respect of tax not deducted at source and raised demand amounting to Rs. 1,74,02,772. However, the same was quashed by the CIT(A).
Consequently, the revenue has filed the appeal against the impugned appellate order of the CIT(A) wherein it was held that the assessee was not liable to deduct tax in respect of aforesaid Rs. 13,81,17,243 paid to MMRDA.
The coram consisting of Sudhanshu Shriwastava and Anadee Nath Misshra while upholding the order of the CIT(A) and quashing the appeal of the revenue held that it is well settled that circulars of CBDT which are beneficial to the assessee are binding on Revenue authorities, whether in proceedings under section 201(1) or 201(1A) of Income Tax Act before the AO or in the course of appellate proceedings either before CIT(A) or in ITAT.
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