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2015 (5) TMI 1247 - AT - Income TaxTDS u/s 194C - Joint Venture responsibility to deduct the TDS on the payments made to its constituents for the work executed by them assessee has given a sub-contract to its constituents - assessee was required to deduct TDS on the payments - AO has held the assessee to be in default u/s.201(1) - HELD THAT:- As undisputed fact that the deductee has already paid the taxes on the payments received from the JV. Since the tax has been paid on the receipts by the deductee, the deductor cannot be held to be assessee in default. In this regard a reference was made to the orders of the Tribunal in case of Raja Chkravarty [2015 (8) TMI 753 - ITAT LUCKNOW] and Rajeev Kumar Agarwal [2014 (6) TMI 79 - ITAT AGRA] in which it has been held that once the deductee has made the payment of taxes on the receipts the deductor cannot be held to be assessee in default. Therefore, on both counts, the assessee cannot be held to be in default u/s. 201(1) of the Act. Interest charged u/s. 201(1A) cannot be charged once it is held that there is no liability to deduct the TDS on the payments made by the assessee to its constituents. It is irrelevant that in few assessment years, the assessee has deducted the TDS on payments made to its constituents. If the assessee has done something wrong, it does not make him responsible to commit mistake in succeeding years Joint Venture is not responsible to deduct the TDS on the payments made to its constituents for the work executed by them in the light of the facts, where the Joint Venture was formed to obtain the contract from the Government and the contract was executed by the constituents. We, therefore, of the view in the instant case that, the assessee was not liable to deduct the TDS, therefore, he cannot be held to be in default and liable to be charged interest u/s. 201(1A) - Appeals of the assessee are allowed.
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