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Validity of order passed by the A.O u/s. 201(1) & 201(1A) - default for non-deduction of tax at source u/s. 194C and u/s. 194J
Category: Case Laws , Posted on: 23/10/2023 , Posted By: CA. AJAY KUMAR AGRAWAL
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Validity of order passed by the A.O u/s. 201(1) & 201(1A) - default for non-deduction of tax at source u/s. 194C and u/s. 194J -
ITAT RAIPUR
EXECUTIVE ENGINEER, MP PWD DN VERSUS THE INCOME TAX OFFICER (TDS) , BHILAI,ITA No. 294/RPR/2023
Dated.- October 19, 2023

Facts the assessee, which is a State Government department, was subjected to a TDS survey u/s. 133A of the Act on 06.10.2017. During proceedings, it was observed by the A.O that the assessee had failed to deduct tax at source (TDS) on the payments aggregating to Rs. 42,59,946 as per the mandate of Section 194C of the Act. Based on the aforesaid fact, the A.O. held the assessee in default and saddled it with liability towards tax u/s. 201(1) of Rs. 85,199/- and interest u/s. 201(1A) of Rs. 78.304/-.
Also, it was observed by the A.O. that the assessee had failed to comply with the mandate of Section 194J of the Act and had made payments towards technical services to one single party, viz. M/s. Creative Architect, Raipur, of Rs. 8,51,117/- without deducting tax at source on the said amount. Based on the aforesaid fact, the A.O. held the assessee in default and saddled it with liability towards tax u/s.201(1) of Rs. 85,112/- and interest u/s. 201(1A) of Rs. 80,856/-
Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. The CIT(Appeals), while upholding the view taken by the A.O, observed as follows:

“5.1 I have gone through the facts of case and grounds of appeal. The ITO TDS has correctly identified the payment where tax was to be deducted by the appellant. No where it is denied that such payment were not liable to TDS. There is also no other documentation available with the appellant whereby it can say that the deductee owned up to pay the taxes. And if one sees the duration of delay it runs into years. The appellant has failed to discharge the duty assigned to it as a deductor and hence has to bear the consequences. The ITO TDS has correctly culled out the sums and correctly worked out the liability and interest u/s 201 and 201(1A) to be paid by the appellant

Held that HELD THAT:- AR had failed to point out any infirmity in the order passed by the CIT(Appeals). Apart from that, it is not the case of the assessee that as respective payees having included the aforementioned amounts in their respective returns of income and paid taxes on the same, it was, thus, not liable to be held as being in default.

Having given thoughtful consideration, find no infirmity in the view taken by the CIT(Appeals), who had rightly upheld the liability fastened upon the assessee u/s. 201(1) & 201(1A) of the Act by the A.O. Decided against assessee.

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