No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT
Pankaj Bajpai
8 Feb 2024 1:14 PM IST
Noting that assessee has also furnished tabular chart along with supporting documents to demonstrate that TDS at appropriate rates has been deducted on such trade discount / commission given to it's agents, the Rajkot ITAT held that assessee cannot be held as in default for not deducting TDS.The Division Bench of Waseem Ahmed (Accountant Member) & Siddhartha Nautiyal (Judicial...
Noting that assessee has also furnished tabular chart along with supporting documents to demonstrate that TDS at appropriate rates has been deducted on such trade discount / commission given to it's agents, the Rajkot ITAT held that assessee cannot be held as in default for not deducting TDS.
The Division Bench of Waseem Ahmed (Accountant Member) & Siddhartha Nautiyal (Judicial Member) observed that “the assessee cannot be held to be an “assessee in default” for non-deduction of TDS, when assessee has already deducted taxes at source appropriate rates”.
As per the brief facts of the case, the assessee, engaged in the business of telecom operations and providing telecom services, has sold pre-paid vouchers and cards of various face value to distributors at lower rate than its face value. The difference of the MRP and price charged from distribution is the trade discount passed on to the retailers. The AO held that the assessee is an “assessee in default” on account of non-deduction of tax at source on the difference between the face value of prepaid vouchers and amounts actually received by the assessee on distribution of prepaid vouchers, by treating such difference as “commission” paid to the distributors. The AO held that the assessee was liable to deduct TDS on such difference, being commission paid to distributors u/s 194H.
The Bench noted the limited issue for consideration is that assessee has contended that it has made due compliance of TDS provisions and the assessee has deducted taxes at the appropriate rates at the time of giving trade discount / commission to it's agents.
Therefore, the assessee could not be held to be an “assessee in default” in the first instance, since it has already deducted taxes at source at the appropriate rates, observed the Bench.
However, since the Department has not analysed such aspect that since the assessee has already deducted taxes at source at appropriate rates, there is no question of invoking the provisions of Section 201(1)/201(1A), the ITAT remitted the matter for carrying out the necessary verification.
Counsel for Appellant/ Taxpayer: None
Counsel for Respondent/ Department: Ashish Kumar Pandey
Case Title: Bharat Sanchar Nigam Ltd verses Deputy CIT
Case Number: ITA. Nos.400&401/Rjt/2018
