ACIT, Circle-76(1), New Delhi V. TCIL Bina Toll Road Ltd, New Delhi

ITA 5965/DEL/2019

AI Insights

The case involves TCIL Bina Toll Road Ltd., a subsidiary of Telecommunications Consultants India Ltd. (TCIL), which deducted TDS at a lower rate of 0.25% on payments made to its holding company, TCIL, based on a certificate under Section 197 of the Income Tax Act. However, the assessee mistakenly mentioned the TAN of its Delhi office instead of the correct TAN for its Bina Madhya Pradesh office while depositing the TDS. This led to a demand under Section 200A for lesser tax deduction. The CIT(A) found merit in the assessee's plea of inadvertent mistake and directed relief, which the Tribunal upheld.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 121734 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 05-12-2022
• Assessment Year: misc
• Appeal Filed On: 09-06-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUYESH SINHA
• Assessee Lawyers: GIREESH KUMAR
• Keywords: TDS
• Section: 194C; 200A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.5965/DEL/2019 Assessment Year 2014-15 ACIT, Circle-76(1), New Delhi. Vs. TCIL Bina Toll Road Ltd., New Delhi. TAN/PAN: AAECT3465H (Appellant) (Respondent) Appellant by: Shri Suyesh Sinha, Adv. Shri Rahul Yadav, Adv. Respondent by: Shri Gireesh Kumar, Sr.DR Date of hearing: 06 12 2022 Date of pronouncement: 06 12 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-XXXI, New Delhi [‘CIT(A) ’ in short] dated 12.02.2019 arising fro m the assessment order dated 09.10.2014 passed by the Assessing Officer (AO) under Section 200A(1) of the Inco me Tax Act, 1961 (the Act) concerning AY 2014-15. 2. Briefl y stated, the assessee is a subsidiar y of Teleco mmunication Consultants India Ltd. (TCI L), a Govern ment of I ndia Undertaking under the administrative control of Ministry of Co mmunicati on. As stated, the assessee co mpan y deducted TDS at a lower rate of 0.25% on payments made to its holding compan y, i .e ., TCIL in co mp liance of I.T.A. No.5965/Del/2019 2 certificate furnished to it by the holding co mpan y. However, the assessee-co mpan y at the ti me of depositing the TDS deducted inadvertently and wrongl y mentioned TAN allotted b y Delhi office, i.e., DELT10348C instead of TAN of Bina Madhya Pradesh Unit, i.e., BPLT01777G and filed its TDS return accordingly with its Delhi TAN. In essence, the assessee- co mpan y mentioned wrong TAN instead of correct TAN on which the lower deduction certificate was issued under Section 197 to the holding compan y of the assessee. Due to the inadvertent mista ke in quoting TAN of different unit, the Assessing Officer created a de man d u/s.200A alleging lesser deduction of tax on pa yments made t o holding company. 3. Aggrieved by the de mand raised under Section 200A of the Act, the assessee preferred appe al before the CI T(A). The CIT( A) took note of the factual matr ix and called for the re mand report fro m the Assessing Officer. The CI T(A) found merit in the plea of the assessee on first principles towards inadvertent mistake in ment ioning wrong TAN while applying lower percentage of tax rate under Section 194C of the Act. The CIT( A) thus directed the Assessing Officer to grant relief fro m the de mand arising for wrong mention of TAN after due verification of facts. The relevant operative paragraph of the order of the CI T( A) is r eproduced hereunder: “ 4 . I h a v e c a r e f u l l y c o n s i d e r e d t h e f a c t s o n r e c o r d a n d s u b m i s s i o n s o f t h e L d . A R i n c l u d i n g t h e d e c i s i o n s re l i e d u p o n b y h i m . 4 . 1 T h e o n l y g r o u n d o f a p p e a l r a i s e d b y t h e a p p e l l an t p e r t a i n s t o t h e d e m a n d c r e a t e d u / s . 2 0 0 A a t R s . 1 , 2 2 , 3 6 , 6 7 0 / - . U n d i s p u t e d l y , t h e a p p e l l a n t c o m p a n y h a s t w o T A N s , o n e f o r D e l h i of f i c e a n d o t h e r f o r B i n a o f f i c e . T h e a p p e l l a n t c o m p a n y g o t e xe c u t e d t h e t o l l I.T.A. No.5965/Del/2019 3 r o a d p r o j e c t s i t u a t e d a t B i n a K u r w a j S i r o n j T o l l R oa d ( M P ) t h r o u g h i t s s u b s i d i a r y c o m p a n y T e l e c o m m u n i c a t i o n C on s u l t a n t s I n d i a L t d w h i c h o b t a i n e d a L o w e D e d u c t i o n C e r t i f i c at e a t 0 . 2 5 % d a t e d 0 1 . 0 8 . 2 0 1 3 f r o m D C I T , T D S C i r c l e 0 5 1 ( 1 ) , D e l h i i n r e s p e c t o f v a r i o u s d e d u c t o r s i n c l u d i n g t h e a p p e l l a n t c o m p a ny . Wh i l e m e n t i o n i n g t h e n a m e o f a p p e l l a n t c o m p a n y , t h e T A N , i . e . , B P L T 0 1 7 7 7 G o f B i n a o f f i c e w a s m e n t i o n e d . T h e d e d u c to r a p p e l l a n t w a s a u t h o r i z e d t o m a k e p a y m e n t s w o r t h R s . 7 5 , 0 0 , 0 0 , 00 0 / - t o T e l e c o m m u n i c a t i o n C o n s u l t a n t s I n d i a L t d . b y d e d u c t in g T D S a t 0 . 2 5 % . U n d i s p u t e d l y , t h e a p p e l l a n t h a s m a d e p a y m e n ts i n r e s p e c t o f t h e s a m e T o l l R o a d P r o j e c t a n d n o o t h e r w o r k , i n f a c t , w a s e x e c u t e d . T h u s , i t a p p e a r s t h a t t h e p a y m e n t s m a d e by t h e a p p e l l a n t c o m p a n y t o T e l e c o m m u n i c a t i o n C o n s u l t a n t s I n d i a L t d . a r e p e r t a i n i n g t o t h e B i n a T o l l R o a d P r o j e c t l o c a t e d a t B i n a , ( M . P . ) a n d h e n c e t h e m i s t a k e b e i n g b o n a f i d e h a s t o b e r e ct i f i e d . T h e A s s e s s i n g O f f i c e r i s a c c o r d i n g l y d i r e c t e d t o a l l o w c o n s e q u e n t i a l r e l i e f , a f t e r c o n s i d e r i n g t h e a b o v e f a c t u a l p o s i t i on w i t h d u e v e r i f i c a t i o n . T h u s , a p p e l l a n t s u c c e e d s p a r t l y . ” 4. On perusal of the first appellate order and the factual matrix pointed out on behalf of the assessee, we find that the order of the CI T( A) in granting relief to the assessee is founded on fair play and natural justice. In t he instant case, the assessee has obtained two TAN fro m the De part ment in its name , one is taken for office at Bina Madhya Pradesh and another one is taken at Delhi. The assessee has deducted TDS on contractual payments to its holding compan y under Section 194C of the Act @0.25% as per the lower deduction certificate issued under Section 197 to the holding co mpany of the assessee co mpan y. Based on the certificate issued, the assessee has deducted TDS @ 0.25% as mandated in the certificate. Ho we ver while depositing the TDS deducted, the assessee has wrongly mentioned the TAN allotted for Delhi office instead of Bina Madhya Pr adesh Office. This fact was also brought to the notice of the Depart ment i mmediatel y but the defect could not be cured in the absence of any provision for such type of rectification. I.T.A. No.5965/Del/2019 4 The CIT(A) , in the factual matrix, has taken a just and fair decision and reversed the demand under Section 200A attributable to merel y wrong mention of TAN in the TDS deposit challan. We see no error in the relief granted by the CIT( A) on equitable grounds. Consequently, the order of the CIT( A) is upheld. 5. In the result, the a ppeal of the Revenue is dismissed. Order pronounced in the open Court on 06/12/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /12/2022 Prabhat