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2017 (8) TMI 278 - AT - Income TaxTDS u/s 192 - short deduction of tds - assessee in default - Violation of the mandate of the Explanation to section 191 - Held that:- Before treating the deductor to be an assessee in default under section 201(1) of the Act, it is the bounden duty of the ITO (TDS) to ascertain and ensure that the assessee has also not paid due tax, for which, the assessee has to provide the requisite details to the ITO (TDS). At the time of issuance of notice dated 02.03.2015, under sections 201/201(1A) of the Act to the University, the ITO (TDS) was in possession of the requisite details of the recipients of the income. As such, the legislative mandate of the Explanation to section 191 of the Act, as explained by their Lordships in “M/s Jagran Prakashan Ltd.” (2012 (5) TMI 488 - ALLAHABAD HIGH COURT) was violated by the ITO (TDS), by not requisitioning, before issuing the show cause notice to the University, information from the recipients of the income, as to whether or not the taxes had been paid by them, nor seeking such information from the concerned Income Tax Authorities. As observed, this is a foundational jurisdictional defect going to the root of the matter. Violation of the mandate of the Explanation to section 191 is prejudicial to the invocation of the jurisdiction of the ITO (TDS) u/s 201/201(1A) of the Act. In absence of such compliance, the invocation of the jurisdiction is null and void ab initio. Such invocation of jurisdiction is, 10 accordingly, cancelled, respectfully following “M/s Jagran Prakashan Ltd.” (supra) and “The Branch Manager, Allahabad Bank” (2016 (3) TMI 1240 - ITAT DELHI). - Decided in favour of assessee.
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