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2012 (10) TMI 797 - AT - Income TaxNon deduction of TDS - CIT(A) deleted the demand raised - Held that:- Undisputedly, payment of Rs. 15 lacs had been made by the assessee company to M/s Nesco Ltd. on 01.04.2002 also clear from the copy of account of M/s Nesco Ltd. for the period from 01.04.2002 to 31.03.2003. On a query as to why the assessee had failed to deduct tax at source on such payment @ 22.44%, the assessee had submitted that the certificate u/s 197 stood already applied for by M/s Nesco Ltd. even before the date of payment, i.e., 01.04.2002. Undisputedly, the certificate u/s 197 was granted only on 23.04.2002, authorizing the assessee to deduct tax at source @ 2% plus surcharge u/s 194 from the licence and maintenance fee/rent compensation payable by the assessee to M/s Nesco Ltd. upto 31.03.2003, thus it is quite clear that it was to remain in force till 31.03.2003, unless cancelled by the ITO prior to the said date Thus, the assessee has not been shown to have committed any default in deducting the tax and depositing it. It was only because the assessee did not have the TDS certificate for low deduction @ 2% on 01.04.2002 while paying the advance rent, that the Assessing Officer treated the assessee as an assessee in default for not deducting 20% tax on 01.04.2002, on the advance rent paid to M/s Nesco Ltd - the tax having been deducted @ 2% and having been deposited before the prescribed date, by no stretch of imagination can the assessee be deemed to be an assessee in default - in favour of assessee.
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