TDS can't be Deducted when EDCs have been Exempted from Category of "Contractor" by Rajasthan State Government’s Order: ITAT [Read Order]
ITAT grants relief in not deducting the TDS in virtue of the order of the Rajasthan State Government, in excluding the EDCs from the category of Contractor.
![TDS cant be Deducted when EDCs have been Exempted from Category of Contractor by Rajasthan State Government’s Order: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/12/TDS-Deducted-when-EDCs-Category-Contractor-Rajasthan-State-Governments-Order-ITAT-TAXSCAN-1.jpg "TDS cant be Deducted when EDCs have been Exempted from Category of Contractor by Rajasthan State Government’s Order: ITAT [Read Order]")
The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that Tax Deducted at Source (TDS) cannot be deducted when the Eco Development Committees (EDCs) have been exempted from the category of the contractor by the Rajasthan State Government’s order. The assessee deductor is the State Government i.e. Conservator of Forest & Field Director, Tiger Project, Sariska, Alwar the...
The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that Tax Deducted at Source (TDS) cannot be deducted when the Eco Development Committees (EDCs) have been exempted from the category of the contractor by the Rajasthan State Government’s order.
The assessee deductor is the State Government i.e. Conservator of Forest & Field Director, Tiger Project, Sariska, Alwar the spot verification under Section 133A(2A) of the Income Tax Act was conducted and required details were called for. After verification of details filed, the original order under Section 201(1)/201(1A) of the Income Tax Act was passed determining the total tax liability including interest of Rs. 44,43,240/-.
The EDC has been constituted to conduct the development works in the reserve areas with active local participation of the villagers and to create job opportunities among them. It also submitted that the above EDCs have been exempted from the category of ‘Contractor’ vide Rajasthan State Government’s order and accordingly no TDS was made from the payments made to such EDCs.
The Assessing Officer (AO) determined total tax liability including interest of Rs. 44,43,240/-.
The Two-member bench comprising of S. Seethalakshmi (Judicial member) and Rathod Kamlesh Jayantbhai (Accountant member) held that the matter was again required to be set aside to the file of the AO to deal with these facets of the case and thereby to decide the issue as the assessee has categorically submitted that there was no contract with the EDCs, they are working with no profit no loss and their income are not chargeable to tax and considering that aspect of the matter the AO was directed to relook all the aspect.
Therefore, the order of the AO was set aside and the appeal of the assessee was allowed.
To Read the full text of the Order CLICK HERE
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