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2016 (10) TMI 850 - AT - Income TaxShort deduction of tds - Demand of the differential TDS @20% - incorrect pan number furnished - Held that:- Primary onus is on the person entitled to receive income on which tax is deductible at source to furnish his PAN and in case such PAN is invalid or does not belong to the said person by virtue of deeming fiction, it has been stated that he has not furnished his PAN to the deductor. In such a scenario, the onus shifts on the person responsible for deducting the tax that he shall deduct the tax at the rate specified in the relevant provisions of the Act or at the rate of 20% whichever is higher. In the instant case the PAN number of Shri Lala Ram was found to be incorrect by the AO hence the AO applied the rate of 20% as against rate of 2% provided under section 194C of the IT Act. The assessee has mentioned that they have tried to contact Shri Lala Ram but he could not provide his correct PAN No. and that’s why the assessee could not file the correction statement. In our view even though the primary onus is on Shri Lala Ram to furnish his correct PAN number to the assessee, what is equally important is that the assessee should verify at the time of making payments or at the time of credit in his books of accounts where Shri Lala Ram has submitted his correct PAN number. In the instant case, the assessee has failed to discharge its obligation to verify the correct PAN and it is only at the time of processing of the TDS return that the department has noticed the submission of incorrect PAN number and thereafter raised the impunged demand. What is important is that the exercise to file TDS returns should be such that it contains correct and accurate data and it is only then that the processing of such data has can happen properly and credit can be given to the income recipient. Given the non-obstante nature of provisions as contained in section 206AA(1) of the Act which overrides section 194C of the Act, we do not see any infirmity in the order of the AO in raising demand of the differential tax that the assessee should have deducted by virtue of submission of incorrect PAN by Shri Lala Ram. At the same time, the assessee shall be at liberty to recover the said amount from Shri Lala Ram. With the above observations the ground taken by the assessee is disposed off. - Decided against assessee
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