2022 (11) TMI 543 - AT - Income Tax
TDS u/s 195 - tax deducted at source from the remittance to BNY Mellon - HELD THAT:- Assessee’s tax withholding liability is accepted, but the amount is paid as advance tax on behalf of BNY Mellon. ITNS 281 is for the tax deductions and collections of tax at source, and ITNS is for income tax on companies and other than companies- whether advance tax, self-assessment tax or in other categories. At best, thus, it is a case of using the wrong challan for depositing the money with the income tax department- the use of ITNS 280 instead of ITNS 281. Whatever other implications it may or may not have, even if it is assumed that there is a use of the wrong challan for payment, which at worse the case could be, nothing really turns on the same.
The fact remains that the taxes are paid as advance tax for BNY Mellon, and to that extent, the assessee tax-deductor cannot be saddled with a tax withholding demand under section 201(1) r.w.s. 195 of the Income Tax Act, 1961. In view of these discussions, as also bearing in mind the entirety of the case, we uphold the assessee's plea, and quash the impugned tax withholding demand under section 201 r.w.s. 195 - Once the basic tax withholding liability u/s 201(1) is quashed, the interest liability under section 201(1A), being consequential in nature, also stand quashed.