TMI Blog2016 (4) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... act that, two separate rate of deductions have been provided for the same work of contractor, one is at the rate of 1% if the contractor is individual or HUF, whereas, it is 2% if the contractor is other than individual or HUF. The Tribunal, in view of facts and circumstances, found that, it is a bona fide wrong impression. As such, on the aspects of the bona fide wrong impression keeping in view the contention of the assessee that in the middle of year, there is change of law about the deduction, as well as on the non-availability of the provisions of Section 40(a)(ia), when the issue is covered by the Calcutta High Court Judgment in case of S.K.Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT ], we do not find that any substantial que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the Assessing Officer, the assessee explained that subsequently, on realisation that TDs on the said payments were to be made @ 2% thereon, instead of 1% as had been done by the assessee, the balance TDS was paid on 31.1.2011 along with interest under Section 201(1A) of the Act. The Assessing Officer, on examination of the assessee's claim, was of the view that deduction of tax at a lower rate cannot be taken as TDS made in accordance with the provisions of Chapter XVII-B and, following the decisions of the Chennai ITAT in the case of Frontier Offshore Exploration (I) Ltd. (supra) and Pixie Enterprises (supra), held that even in case of short deduction, the liability to deduct tax exists as on the date of filing the return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, the Hon'ble High Court of Calcutta has held as under:- 2. The reasoning appearing at paragraph 6 of the judgment and/or order under challenge reads as follows: In the present case before us the assessee has deducted tax under Section 194C(2) of the Act being payments made to subcontractors and it is not a case of nondeduction of tax or no deduction of tax as is the import of section 40a(ia) of the Act. But the revenue s contention is that the payments are in the nature of machinery hire charges falling under the head rent and the previous provisions of section 194I of the Act are applicable. According to revenue, the assessee has deducted tax @ 1% 2 under Section 194C(2) of the Act as against the actual deduction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , inter alia, assessee has to deduct tax and the second where after deducting tax, inter alia, the assessee has to pay into Govt. Account. There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deduction is not as required by or under the Act, but the facts is that this expression, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in sub-section 3(1) of section 139. This section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to government account. If there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee s appeal has been allowed. 4. However, Mr.Aravind, learned counsel appearing for appellant contended that the decision of Calcutta High Court in case of Commissioner of IT vs. S.K.Tekriwal reported in (2014) 361 ITR 432 (Cal.) is wrongly applied by the Tribunal. The facts of the case in the decision of Calcutta High Court were altogether different. He submitted that, in the said case, the TDS was deducted at a lesser percentage but the payment was credited in the Revenue in time whereas, in the present case, the TDS was deducted at a lesser rate but no payment was credited with the revenue in time. 5. He submitted that, as per Scheme of Sec.40(a) (ia) of the Act read with proviso, if no deduction is made, the amount is disallowab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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