|The Tax Publishers2021 TaxPub(DT) 0763 (Kol-Trib) : (2021) 186 ITD 0761
INCOME TAX ACT, 1961
If the payer of income is able to bring to the notice of the AO that the payee (recipient of income) has already paid tax on the amount received from the payer, then the payer cannot be treated as an assessee-in-default.
Tax deduction at source - Assessee-in-default - Assessee-bank failed to deduct tax at source on interest paid to customers -
During course of survey at premises of assessee-bank, AO found that two customers had been given interest on their deposits without deducting tax at source in violation of section 194A. According to AO, the assessee ought to have deducted tax when it came to its notice that the interest given to them exceeded the threshold limit of taxable interest income. AO alleged that assessee failed to furnish Form 26A as per rule 31ACB, despite the fact that interest income of those customers were more than the taxable income, thus, he declared the assessee as an assessee-in-default as per provision of section 201(1)/(1A). It was submitted on behalf of the assessee that the said two customers (payees) had already paid taxes on the interest income disbursed by the assessee to them; therefore, the assessee could not be treated as an assessee-in-default. Held: If the payer (assessee in the instant case) of income is able to bring to the notice of the AO that the payee (recipient of income) has already paid tax on the amount received from the payer, then the payer cannot be treated as an assessee-in-default. In instant case, both the customers against whom the AO found that the assessee failed to deduct tax, had duly reflected and shown the entire interest income in their respective returns of income and remitted tax on it, then in such a scenario the assessee could not be held to be an assessee-in-default. However, according to AO, the assessee did not fulfill the conditions specified as per the first proviso to section 201. Accordingly, the issue was remanded to the AO and the assessee was directed to furnish the documents as required under first proviso to section 201.
Relied:M/s. Hindustan Coca-Cola Beverage Pvt. Ltd. v. CIT 2007) 293 ITR 226 (SC) : 2007 TaxPub(DT) 1452 (SC).
FAVOUR : Matter remanded
IN THE ITAT, KOLKATA BENCH
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