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2022 (5) TMI 1470 - AT - Income TaxTDS u/s 195 - “assessee in default” as per the provisions of section 201 [1] - appellant has made payments to two non-residents and did not deduct TDS - As submitted that the payees i.e. the two sellers of the property have disclosed the consideration received from the appellant in their respective return of income filed by them before the tax authorities and appellant cannot be held as an assessee in default since as per the first proviso to section 201[1] though is applicable to the resident assessee as it stood on that particular date, the said beneficial relaxations allowed to the resident payees should also be considered and be applied to the non-residents as well, which is discriminatory in nature and should be equally applied to the non-residents - HELD THAT:- Admittedly, it is not disputed that the appellant has made payments to two non-residents and did not deduct TDS as per the provisions of section 195 - Counsel submitted that the payees i.e. the two sellers of the property have disclosed the consideration received from the appellant in their respective return of income filed by them before the tax authorities; and since the said two sellers of the property having declared the sale consideration received from the appellant in their respective return of income, the appellant cannot be held as an assessee in default as per the first proviso to section 201[1] although is applicable to the resident assessee as it stood on that particular date, the said beneficial relaxations allowed to the resident payees should also be considered and be applied to the non-residents as well, which is discriminatory in nature and should be equally applied to the non-residents. As seen that the payees in the instant case having filed their return of income and disclosed the consideration in their respective returns and have duly complied with the amended provisions of section 201[1] which has been inserted in Finance [No. 2] Act, 2019. We are of the considered view that the said proviso to section 201[1] wherein the benefit has also been extended to the payments made to non-residents are meant for removal of anomaly, is required to be given with retrospective effect. In our view, the appellant assessee can not be held as an assessee in default as per proviso to section 201[1] of the Act, in view of the amended provisions of section 201[1] being inserted in Finance [No. 2] Act, 2019. Accordingly, we delete the demand raised by the AO and confirmed by the CIT(A) under section 201[1] Interest levied u/s 201[1A] - As noted that the said property was sold by the appellant on 17/09/2011 and the return of income by the two payees have been filed on 30/07/2012. Thus, interest amount u/s 201[1A] has to be calculated for the period 07/10/2011 to 30/07/2012 being till the date of filing of the return by the two payees. The Counsel placed reliance on the parity of reasoning of the decision of the Hon’ble Apex Court in the case of “Hindustan Coca Cola Beverages (P) Ltd v. CIT” [2007 (8) TMI 12 - SUPREME COURT] and also the Memorandum to Finance (No.2) Bill, 2019 which is placed at page 21 of compilation. The contents of which is reproduced below: “Consequent to this amendment, it is also proposed to amend the proviso to sub-section (1A) of section 201 to provide for levy of interest till the date of filing of return by the non-resident payee.” Accordingly, we direct the AO, to recompute the interest Tax liability u/s 201(1A) for the period 07/10/2011 to 30/07/2012 till the date of filing of the return by the two payees. Thus, this ground of appeal on the issue of interest Tax liability u/s 201(1A) is partly allowed.
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