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2014 (11) TMI 637 - AT - Income TaxDiscount of recharge vouchers and prepaid SIM cards allowed to the franchisees – TDS not deducted u/s 194H – order u/s 201/201(1A) - Held that:- A short deduction of tax at source, by itself does not result in a legally sustainable demand u/s 201(1) and u/s 201(1A) – in Hindustan Coca Cola Beverage Pvt. Ltd. Vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] it has been held that the taxes cannot be recovered once again from the assessee in a situation in which the recipient of income has paid due taxes on income embedded in the payments from which tax withholding requirements were not fully or partly, complied with - the onus is on the revenue to demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liability is not discharged that vicarious recovery liability can be invoked - recovery provisions u/s 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due. In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact - once assessee furnishes the requisite basic information, the AO can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income - the proviso is clarificatory in nature though it was inserted by the Finance Act, 2007 w.e.f. 01.06.2007 - The nature of the amendment and the purpose which it seeks to achieve make it abundantly clear that it is a clarificatory amendment and would be applicable even in respect of assessment years prior to insertion of the amendment – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of assessee.
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