Department could have verified TDS deposit with technology instead of litigation – ITAT

Assessee’s contentions of TDS deposit could have been easily verified with help of technology instead of relegating assessee to litigation – ITAT

In a recent judgment, ITAT Agra has observed that contentions of the assessee that he as deposited TDS could have been easily verified by the authorities with the help of the technology the Income Tax Department is equipped with instead of relegating assessee to litigation.

ABCAUS Case Law Citation:
4344 (2024) (12) abcaus.in ITAT Agra

In the instant case, the assessee had challenged the order passed by the Commissioner of Income-tax (Appeals), NFAC confirming the order passed by Assessing Officer (AO) u/s 201(1) & 201(1A) of the Income Tax Act, 1961 (the Act), holding assessee as assessee-in-default for non compliance of provisions of Section 194C of the Act.

The appellant assessee was engaged in the business of road construction. It acquires road construction contracts and further sub contracted them to other concerns. Assessee filed an online application for lower deduction of TDS certificate u/s. 197(1) along with audit report and other supporting evidences.

The Assessing Officer observed from the documents furnished online i.e. Form No. 3CB Report that the assessee had not deducted any TDS in respect of any of the transactions for one previous year. From the perusal of P&L Account of the audit report, the AO observed that the assessee had provided sub-contracts without deducting TDS on the payments. Assessing Officer asked the assessee to submit the details, but no explanation were furnished.

The Assessing Officer treated the assessee as assessee-in-default u/s. 201(1) and 201(1A) of the Act for non-deduction of TDS on the sub-contract payments and the assessee was directed to pay demand in this respect.

During Appellate proceedings, the CIT(Appeals) issued five notices to the assessee which remained un-complied with. The CIT(Appeals) dismissed tha appeal observing that assessee had claimed to have duly deposited TDS amount to the credit of government, but did not submit verifiable proof to substantiate that TDS was duly deposited by it.

Before the Tribunal, the assessee submitted that the it had duly deposited the income-tax deducted at source(TDS) u/s 194C along with interest and produced the copy of challan. It was submitted that TDS return in Form No. 26Q for 4^th quarter of the said financial year was duly filled within due date with the department. The assessee also produced Form No. 27A and TDS certificate i.e. Form. No. 16A issued by the assessee in favour of sub-contractor as

downloaded from Traces Portal for the fourth quarter of the financial year concerned.

The Tribunal criticised the Department for the manner in which the authorities below had dismissed the contentions of the assessee. The Tribunal opined that department is well equipped with the latest technologies and the filing and processing etc are now being done electronically by department. Almost all the data’s are now available digitally with the department and the relevant officers can access these digital data online. The contentions of the assessee could have been easily verified by the authorities with the help of the technology the department is equipped with instead of relegating assessee to litigation, and the assessee as well statutory authorities could have been saved with precious time and costs in persuing this matter at various legal forums.

The Tribunal allowed the appeal of the assessee and directed AO to grant appropriate credit for TDS/Interest deposited by the assesseafter verifying the documents.

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