9911796707
TMI Blog2013 (1) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... clear and patent error committed by the Assessing Officer in applying the rate of deduction at 20% instead of 10%, which ought to have been accepted. iii) The learned CIT(A) ought not to have held that the subsequent amendment made to the terms of the agreement with regard to the payment of interest was not valid especially, as the said finding has been rendered without considering the evidence of the parties to the agreement and hence, the action sustained under section 201(1) of the Act stands vitiated and is liable to be cancelled. iv) The appellant denies itself liable to interest under section 201(1A) of the Act, which under the facts and in the circumstances of the appellant's case is liable to be cancelled. 3. The facts in brief are as follows:- The assessee is a company. It is engaged in the business of development of infrastructure projects, namely, residential flats. The Assessing Officer conducted survey in the business premises of the assessee on 22/3/2010. The Assessing Officer noticed during the course of survey that the assessee company had made certain delayed remittances in respect of tax deducted for the assessment years 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company carried the matter in appeal before the first appellate authority. 5. Elaborate written submissions were filed before the CIT(A), which are extracted at pages 3 to 7 of the impugned order of the CIT(A). The CIT(A) partly allowed the appeal of the assessee. The CIT(A) held that in respect of interest pertaining to quarter subsequent to the amendment of Act (1/10/2010), the TDS was to be deducted only at 10% instead of 20% calculated by the Assessing Officer. Accordingly the demand raised under section 201(1) and 201(1A) was reduced. The reasoning of the CIT(A) in rejecting the appeal reads as follows:- "3. I have carefully considered the appellant's submissions and perused the order under section 154 as well as the Assessing Officer's report. It is seen that the appellant has pointed out that for the financial year 2009-10, TDS was required to be deducted at 10% as against 20% as the relevant provision was amended with effect from 1/10/2009. The appellant's claim that the rate at 10% is correct cannot be accepted because of the following two reasons: i) Firstly, the claim of the appellant that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was found or mentioned at the time of survey on 22/3/2010 or up to 9/4/2010, the date of passing the order under section 201(1) and 201(1A) as per which the appellant had agreed to the default committed and agreed to discharge the TDS liabilities. Therefore, the new plea vide the rectification application bringing forth the 'new agreement' with modified terms and conditions through a letter with any resolution/recording of minutes to back it thereof can only be treated as an afterthought to suit the parties concerned and cannot be accepted. ii) Secondly, even if interest was paid annually as per the said modified agreement and not quarterly as per the original agreement ratified by the Board, in both the agreements the interest was to be compounded quarterly and, therefore, for calculation and provision for quarterly interest section 194A is clearly attracted at the stage of each quarter. As such, in respect of interest pertaining to quarters prior to the amendment in the Act i.e. up to 1/10/2010, TDS was required to be deducted at the rate of 20% as per law irrespective of when it has been paid or shown to have accounted. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted was approved by the Board of Directors of the assessee company and the same is evident from the minutes of the Board meeting held on 21/1/2009 (source : Page 7 of the paper book). Further it was resolved by the Board that Mr. Ramani Sastri, one of the Directors of the assessee company was authorized to execute the inter corporate deposit agreement and all other incidental documents on behalf of the assessee company with the M/s Urban Infrastructure Trustees Limited. In pursuance to the Board's resolution, inter corporate deposit agreement executed by the assessee company with M/s Urban Infrastructure Trustees Limited was signed by Mr. Ramani Sastri for and behalf of the assessee company. As per the above deposit agreement, the interest on ICD was payable at the rate of 14% quarterly i.e. on 31st March, 30th June, 30th September and 31st December. However, the terms of the payment of interest was modified by letter dated 25/6/2009 of the assessee company, which was accepted by the authorized signatory of M/s Urban Infrastructure Trustees Limited. Under the modified/amended clause of interest payment (clause 1.4 of the deposit agreement), interest was payable at SBI PLR +3% compo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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