ACCOUNT OFFICER, BSNL,NOIDA V. DCIT, NOIDA

ITA 438/DEL/2016

AI Insights

The case involves the Accounts Officer of BSNL appealing against the order of the Commissioner of Income Tax (Appeals), Noida, which sustained the action of the Assessing Officer in charging interest under section 201(1A) of the Income Tax Act for delayed payment of TDS. The primary contention was whether the TDS should have been deducted under section 194J or section 194C. The assessee argued that the payments made did not fall under professional or technical services, thus should not attract TDS under section 194J. The Tribunal found no infirmity in the CIT(A)'s decision regarding the applicability of section 201(1A) but directed a re-examination of the interest calculation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470444 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: MANDEEP PANWAR
• Assessee Lawyers: TANYA; MISTAKE DEDUCTED
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; TDS
• Section: 201; 201(1); 194C; 194J

Judgement Text

"ITA No.438/Del/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No.438/Del/2016 िनधा\tरणवष\t/Assessment Year:2008-09 Accounts Officer, BSNL, O/o General Manager, Bharat Sanchar Nigam Ltd., Main Telephone Exchange, Sector-19, Noida. PAN No.AABCB5576G बनाम Vs. DCIT, TDS, Noida. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Ms. Tanya, Adv. Revenue by Shri Mandeep Panwar, Sr. DR सुनवाईक\bतारीख/ Date of hearing: 10.01.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 07.02.2025 आदेश /O R D E R PER C.N. PRASAD, J.M. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Noida dated 06.02.2015 for the AY 2008-09 in sustaining the action of the Assessing Officer in charging interest u/s 201(1A) of the Act. ITA No.438/Del/2016 2 2. There is a delay in filing of appeal by the assessee and the assessee filed affidavit along with petition for condonation of delay explaining such delay as under: - “Applicant has filed the accompanying appeal challenging the order dated 6.2.2015 passed by Ld. CIT(Appeals), which is late by 357 days. The reasons for delayed filing of appeal are as under: 1. That the impugned order dated 6.2.2015 passed by the Ld. CIT(Appeals) was not served on the Applicant. However, on the enquiry made by the Applicant in the last week of Nov., 2015, it transpired that order has already been passed in the matter. 2. That immediately thereafter certified copy of the order was applied which was made available to the Applicant on 30.11.2015. Thereafter Applicant sought advice from its counsel which was received on 21.12.2015. 3. That thereafter approval of GMTD, BSNL, Noida was obtained along with concurrence of Internal Financial Advisor, which was obtained on 28.12.2015 with direction to send the matter for approval to the CGM Telecommunications, UP (West), Telecom Circle, Meerut. Accordingly, the matter was sent to CGM Telecommunications, UP (West), Telecom Circle, Meerut on 29.12.2015 for his consideration and approval for filing appeal before this Hon’ble Court. 4. That the approval of CGM Telecommunications, UP (West), Telecom Circle, Meerut was received on 12.01.2016 for filing appeal before this Hon’ble Court. Thereafter the entire papers were handed over to the counsel Shri Harsh Pandey, who drafted the appeal and after typing etc., the appeal has been filed on 28.01.2016. ITA No.438/Del/2016 3 5. That as explained above, the delay of 357 days in filing the accompanying appeal is not international and deliberate but to the unavoidable reasons explained above and therefore in the interest of justice the delay in filing appeal is liable to be condoned by this Hon’ble Court. PRAYER In the premises, it is most respectfully prayed that this Hon’ble Appellate Tribunal may graciously be pleased to condone the delay and register the appeal for disposal of the same and oblige. Sd/- (APPLICANT)” On going through the affidavit and the reasons for the delay, we find that the assessee is prevented with reasonable cause in filing the appeal. The delay in filing appeal by the assessee is condoned. 3. Coming to the merits of the case, it is the submission of the Ld. Counsel for the assessee that the assessee by mistake deducted TDS u/s 194J of the Act instead of 194C of the Act on the payments made by the assessee. 4. Ld. Counsel for the assessee submits that since payments made by the assessee does not fall under professional or technical services the assessee is not obliged to deduct TDS u/s 194J but only the provisions of section 194C were attracted. ITA No.438/Del/2016 4 5. Ld. Counsel further referring to ground no.7 of grounds of appeal submits that if at all the TDS is liable to be deducted u/s 194J the computation of interest demand u/s 201(1A) is incorrect for the reason that the rate of TDS u/s 194J till 31.05.2007 was 5.61% which was increased to 11.33% w.e.f. 01.06.2007. Therefore, the excess amount deposited for the period from April 2007 and May 2007 may be allowed to be adjusted against correct liability of interest recalculated as per rates in force during relevant period. 6. Heard rival contentions, perused the orders of the authorities below. On perusal of the order passed by the Assessing Officer we observe that there is no dispute about the deductibility of TDS i.e. whether u/s 194J or u/s194C of the Act as the Assessing Officer did not pass any order u/s 201(1) of the Act as the assessee itself deducted TDS u/s 194J of the Act. However, the Assessing Officer passed order u/s 201(1A) charging interest for the delayed payment which was challenged before the Ld. CIT(A). Ld. CIT(A) considering the submissions of the assessee and the averments in the order passed by the Assessing Officer held as under: - “OBSERVATIONS: I have carefully considered the written submissions of the appellant and also the contents of the assessment order and perused the relevant material available on records and after having carefully considered the entire facts and ITA No.438/Del/2016 5 circumstances of the case, my conclusions on the issues raised in the grounds of appeal are as under: Ground Nos. 1 to 15: From material available on record I have noticed that during the verification proceeding on being pointed out by the AO, the assessee voluntarily agreed with the contention of the Department that payment under question to the persons rendering professional/technical services were liable for TDS under section 194J of the I.T. Act instead of 194C as was wrongly applied by the assessee. Accordingly, assessee deducted and recovered the shortfall of Rs.1.02 Crores and deposited the same in government account while TDS returns were accordingly filed and TDS certificates were issued to the payees. Since the appellant has voluntarily admitted that the payments against impugned services were covered by provisions of section 194J of the I.T. Act, no order under section 201 has been passed in this case. As such the issue of applicability of provisions of section 194J looses its relevance since tax has already been deducted by the assessee under section 194J which were subsequently deposited, TDS return filed and Form 16A issued. Since the AO has not passed an order u/s. 201 in this case the same is not a matter of dispute. However, it was noticed by the AO that the interest chargeable under section 201(1 A) has not been paid by the appellant for delayed payment as has been worked out at page two of this order and accordingly appellant has been treated as assessee in default and demand on account of interest amounting Rs.5,22,214/- under 201(1A) has been raised. Though the assessee was specifically asked to explain the reasons for above default, there was no reply from the assessee. Since, assessee himself admitted short deduction of tax at source as a result of wrongly applying the provisions of section 194C the assessee is liable to pay interest under 201(1A) of the I.T. Act on account of admitted short deduction. So far as chargeability of interest under section 201(1A) is concerned the relevant, provisions of Income Tax Act have to be applied and that the AO does not have any discretion whatsoever on this account. ITA No.438/Del/2016 6 Accordingly, I am of the considered view that the order under 201(1A) passed by AO is in, accordance with provisions of the law requiring no interference. However, the AO is directed to look into and ensure that the calculation of interest u/s, 201(1A) as charged above are as per law.” 7. On perusal of the findings of the Ld. CIT(A) it is observed that the Ld. CIT(A) directed the Assessing Officer to look into and ensure that the calculation of interest as charged by the Assessing Officer u/s 201(1A) is as per law. It is also observed that the Ld. CIT(Appeals) held that the dispute in appeal is only with regard to charging of interest u/s 201(1A) which was rightly made by the Assessing Officer for the delayed deposit of TDS. We do not see any infirmity in the order of the Ld. CIT(A). 8. However, the assessee in ground no. 7 of grounds of appeal contends that interest u/s 201(1A) was incorrectly charged. Therefore, we direct the Assessing Officer to look into the contention of the assessee with regard to incorrect levy of interest u/s 201(1A) of the Act and pass order afresh in accordance with law after providing adequate opportunity of being heard. Ground no.7 of grounds of appeal is allowed for statistical purpose. 9. Since the dispute is only with regard to levy of interest in this appeal all other grounds raised by the assessee on the deductibility ITA No.438/Del/2016 7 of TDS u/s 194J/194C are not emanating from the order passed by the Assessing Officer u/s 201(1A) and therefore these grounds will not survive. 10. In the result, appeal of the assessee is partly allowed for statistical purpose as indicated above. Order pronounced in the open court on 07.02.2025 Sd/- Sd/- (NAVEEN CHANDRA) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 07.02.2025 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "