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2015 (8) TMI 989 - RAJASTHAN HIGH COURT

2015 (8) TMI 989 - RAJASTHAN HIGH COURT - TMI - TDS liability - payments made to Channel Providers u/Sec. 194C OR u/Sec. 194J - whether ITAT was justified in law and has not acted perversely in holding that the payments made by the assessee to Channel Providers were liable for deduction of tax at source u/Sec. 194C and not u/Sec. 194J of the Income Tax Act, 1961 when the said issue was not before them and the assessee has only assailed the penalty ? - Held that:- We find merit in the arguments o .....

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rein and remit the matter back to the ITAT for reconsideration afresh in accordance with law on merits after affording hearing to the parties without being influenced or inhibited by any of the observations made herein above. - Decided in favour of revenue for statistical purposes. - DB Income Tax Appeal No.584/2011 - Dated:- 30-7-2015 - MR. AJAY RASTOGI AND J.K. RANKA, JJ. For The Appellant : Mr. RB Mathur., counsel For The Respondent : Ms. Manisha Surana, counsel BY THE COURT (Per Hon'ble .....

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the appeal on merits. 3. Instant Income Tax Appeal u/Sec. 260A of the Income Tax Act, by the appellant-Revenue is directed against order dt.30/01/2009 passed by the ITAT and relate to the assessment year 2005-06. 4. Brief facts, which are relevant for disposal of the present appeal, are that a survey operation was conducted on the business premises of the respondent-assessee (a partnership firm) on 16/02/2005. The assessee deals in the transmission of channels through cable network and during th .....

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tax at source. It was admitted by the assessee that they were not aware of the provisions relating to deduction of tax at source and after the survey, deposited the entire amount admitting tax liability on 25/03/2005 to 22/07/2005. Notice u/Sec. 271C was issued as to why penalty may not be imposed. However, explanation was offered that the assessee was not aware of the provisions of TDS and default, if any, was bonafide and immediately when the officers brought to the notice of the assessee, th .....

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ave not really considered the issue at all and in so far as the ITAT is concerned, he contended that it wrongly relied upon the finding recorded by the CIT(A) and there is no reasoning by the ITAT of its own and thus when the ITAT, which is a final fact finding authority, ought to have gone into the issue in a detailed manner and thus, the order is perverse and requires consideration. 7. On the contrary, ld. counsel for the respondentassessee contended that both the appellate authorities had ela .....

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and gone through the material available on record. 9. As noticed earlier, admittedly the assessee was not deducting tax at source prior to 16/02/2005 when survey operation on the premises of the assessee was carried and the assessee was making huge payments to various channels against airing fees. The demand of TDS and interest was created u/Sec. 194J of the Act, which was deposited by the assessee much after the date of survey. The ITAT, in its order observed that It was argued that the assesse .....

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the ITAT, the argument was raised that the assessee was at least deducting tax at source @ 2.091% u/Sec. 194C and it appears the ITAT was swayed by the above argument by the assessee. On the above observations, counsel for the assessee submitted that even before the date of survey on 16/02/2005, tax was deducted and deposited in terms of Sec. 194C. It would be appropriate to quote the observations made by this Court in its order dated.16/09/2014 which reads ad-infra:- After the matter being hear .....

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under these circumstances, invoking penalty u/S. 271C as observed by the Tribunal does not cause any substantial question of law. Let the respondent-assessee may place on record the relevant material & affidavit of the assessee as to whether for the assessment year in question, the amount of TDS was deposited in terms of Sec. 194C since it is not clear as claimed by the respondent-assessee from the record. Let the matter may come up before the Court on 15/10/2014, as prayed. 10. Subsequent t .....

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fore the date of survey dated i.e. 16.02.2005. That I have checked the accounts and the relevant records and it is humbly submitted that no amount of TDS was deposited on or before 16.02.2005. That whatever amount of TDS was deposited, was deposited after 16.02.2005 in terms of Sec. 194C of the Act and thereafter, when informed by the Income Tax Department, the firm started deducting and depositing the amount of TDS u/s 194J of the Act. That the details of amount of TDS deposited is as under:- S .....

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