INCOME TAX ACT, 1961

Section 201(1A)

Tax deduction at source - Interest under section 201(1A) - Assessee contended that interest being paid by deductee -

AO issued notice under section 201(1)/201(1A) upon assessee-company and passed an order holding the assessee as assessee-in-default on account of non-deduction of tax at source in respect of land acquired on lease from New Okhla Industrial Development Authority (NOIDA). Further, CIT (A) held that the assessee had a reasonable cause for not deducting tax on the said payment as it was guided by the advice given by the deductee, i.e. NOIDA, therefore, it could not be treated as an assessee-in-default. However, interest liability under section 201(1A) was upheld with a direction to the AO to re-compute the interest as per first proviso to section 201(1A) from the date on which tax was deductible till the date of filing of the return of income by the deductee. Held: It was responsibility of assessee to furnish documentary evidence in support that NOIDA paid tax to the Income Tax department on lease rental income i.e. for the amount of the tax which was deductible on lease rental payment under reference along with interest. If the said interest had already been paid by the NOIDA, no recovery could be made from the assessee for the said amount of the interest. Accordingly, the matter was remanded to the AO with the direction to verify whether the NOIDA made payment of the basic TDS liability along with the interest due thereon or not.

REFERRED : Rajesh Projects (India) (P) Ltd. v. CIT (TDS)-II &Ors., W.P.(C) 8085/2014

FAVOUR : Matter remanded

A.Y. :

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