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2016 (10) TMI 1067 - HC - Income TaxTDS on deemed dividend under section 2(22)(e) - liability to pay - Held that:- Tribunal in these (TDS) proceedings have held that as the very basis for holding the respondent-assessee liable for failure to deduct tax did not subsist, the TDS proceedings must also fail. This was in view of the orders passed in the case of recipients, i.e., M/s. Siddhivinayak Realities Pvt. Ltd. and Mr. Vikas Oberoi in appeal by the authorities under the Act including this court that they were not liable to any tax as they had not received any deemed dividend under section 2(22)(e) of the Act. Once the foundation is removed, the superstructure falls (sublato fundamento cadit opus). The grievance of the Revenue that in TDS proceedings, one must ignore the orders passed in the hands of the recipients, i.e., M/s. Siddhivinayak Realities Pvt. Ltd. and Mr. Vikas Oberoi but the officers of the Revenue administering the TDS provisions are not outside the scope of the Act and orders passed under the Act in respect of the character of the payment made under the Act are binding upon them. The fact that at the time the order of the Assistant Commissioner of Income-tax (TDS) was passed, there was basis to do so does not mean that orders passed on income in the hands of the recipients will have no bearing in deciding its validity. One must not ignore the fact that this order of the TDS officer is tentative in nature and its existence would depend upon the nature of receipt in the hands of the recipient and subject to the orders passed in respect thereof by appropriate court. - Decided against revenue
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