The Raipur bench of Income Tax Appellate Tribunal (ITAT) quashed the order of the Assessing officer on levy of late fee for Tax Deduction at Source (TDS) default for the assessment year 2013-14.
Assessee Chhattisgarh State Co-operative Marketing Federation Limited had made payment of vehicle hire charges in respect of vehicles used by the personnel of the assessee for various purposes however, at the time of making the payments or subsequently, the assessee had not deducted tax at source as required under the provisions of section 194-I or 194-C of the Income Tax Act 1961. After the TDS verification assessee deduct TDS as per section 194-I of the Income Tax Act 1961, after the TDS verification. After the assessing officer levy late fee for TDS. Against this order assesse filed an appeal before ITAT.
Section 194-C of the Income Tax Act 1961 provides that any person who is a resident contractor is liable to pay TDS.
Section 194-I dealing with the types of rent and its character.
Nikhilesh Beghani Counsel for the assessee contended that ” the parties to whom the payments were made, were having PAN numbers and the assessee deposited TDS immediately after the Survey action of the Department.
G.N. Singh counsel for the revenue submitted that at the time of payments, the PAN numbers of the persons to whom the payments were made, were not available and TDS was not deducted. Therefore, it is a default under section 201 Income Tax Act 1961.
After considering the contentions of the both parties the division bench of ITAT comprising Ravish Sood, (Judicial Member) and Dr. Dipak P. Ripote, (Accountant Member) allow the appeal filed by the assessee and held that the levy of late fee under section 234E of Income Tax Act 1961, is bad in law for the AY 2013-14.
Section 234E of Income Tax Act 1961 says that if a person fail to deduct TDS he shall be liable to pay a sum of rupees by way of fee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
