Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT
2 years, 9 months ago

Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT

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The Delhi Bench of the Income Tax Appellate Tribunal, consisting of Kul Bharat and R.K. Panda, upheld the CIT order, holding that the mere fact that taxes were not deducted on the year end provision but were deducted and deposited upon crystallisation of liability to pay the expenses does not automatically justify the imposition of a penalty under section 271C of the Income Tax Act. The JCIT issued a show cause notice asking the assessee as to why the penalty under section 271C read with section 274 of the Income Tax Act should not be imposed. Aggrieved by the order of the CIT, the appellant/department appealed against the order before the ITAT and contended that CIT was not right in holding that a penalty was not leviable under section 271C of the Income Tax Act without appreciating the fact that the deductor assessee has failed to comply with the statutory provisions under sections 194C and 194J of the Income Tax Act, 1961 by not deducting TDS on credit/payment of expenses. In the lack of invoices and resultant duty to make the payment, the ITAT upheld the order of the CIT cancelling the penalty on the basis that the assessee did not withhold taxes on the year-end provision for expenses under section 40/40 of the Income Tax Act.

Expenses Tax Penalty Income Tribunal End Provision Tds Itat Assessee Cit Jcit  liability  end  taxes  income  itat  identifiable  tax  justifiable  order  tds  expenses  penalty  jcit  payable  assessee  nondeduction  provision

History of this topic

Rule 8D Of IT Rules Can Be Invoked Only If Assessee's Computation Of Expenses Attributable To Earning Exempt Income Is Found Inadequate: Delhi HC
4 days, 14 hours ago

Rule 8D Of IT Rules Can Be Invoked Only If Assessee's Computation Of Expenses Attributable To Earning Exempt Income Is Found Inadequate: Delhi HC

Live Law  

The Delhi High Court has held that recourse to Rule 8D of the Income Tax Rules, 1962 for computing disallowance under Section 14A of the Income Tax Act is available only if the Assessee's computation of expenses attributable to earning exempt income, is found to be inadequate. Aggrieved, the Assessee preferred an appeal before the Commissioner of Income Tax which …

When Is Action For Imposition Of Penalty 'Initiated' U/S 271C Of Income Tax Act For Failure To Deduct Tax At Source: Delhi HC Explains
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1 month, 1 week ago

When Is Action For Imposition Of Penalty 'Initiated' U/S 271C Of Income Tax Act For Failure To Deduct Tax At Source: Delhi HC Explains

Live Law  

The Delhi High Court recently explained when an action for imposition of penalty under Section 271C of the Income Tax Act, 1961 can be said to have been “initiated”. At the outset, the High Court noted that when a penalty proceeding can be stated to be initiated is squarely covered in favour of the assessee by Principal Commissioner of Income …

Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITAT
6 months, 1 week ago

Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that the income tax deduction is allowable on expenditures incurred on warranty claims.The bench of Kul Bharat and M. Balaganesh has relied on the decision of the Supreme Court in the case of Rotork Controls India Ltd., in which it was held that if the facts establish or show that. …

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT
7 months, 2 weeks ago

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that since the assessee was a non-resident, the entire tax was to be deducted at source on payment made by the payer to it, and there was no question of advance tax payment by the assessee; accordingly, no interest under Section 234B could be levied upon the assessee.The bench of …

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT
7 months, 3 weeks ago

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT

Live Law  

On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, the Visakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. The Bench noted that Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf …

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT
10 months, 2 weeks ago

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT

Live Law  

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 & Siddhartha Nautiyal observed that “the …

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT
10 months, 2 weeks ago

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT

Live Law  

On finding that voluntary disallowance of expense u/s 40 of the Income Tax Act is not a ground to treat the assessee as 'assessee in default' u/s 201, the Delhi ITAT deleted the addition of chargeable interest u/s 201 as well as the treatment of 'assessee in default' u/s 201. The Bench comprising Anubhav Sharma and M. Balaganesh observed that, …

Direct Tax Cases Monthly Round Up: January 2024
10 months, 2 weeks ago

Direct Tax Cases Monthly Round Up: January 2024

Live Law  

Supreme Court Case Title: Herbicides India Limited verses ACIT While setting aside the Rajasthan High Court orders, the Supreme Court restored the assessee's appeals by condoning the delay in filing the paper-book before High Court and observed that the assessee is entitled to have his appeals heard on merits. Madras High Court Case Title: Anamallais Bus Transports P. Ltd verses …

Section 54 Deduction Can't Be Disallowed Merely For Not Depositing LTCG In Capital Gain Account Scheme: ITAT
1 year ago

Section 54 Deduction Can't Be Disallowed Merely For Not Depositing LTCG In Capital Gain Account Scheme: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that deduction under Section 54 of the Income Tax Act cannot be disallowed merely for not depositing long-term capital gain that was not deposited in the capital gain account scheme.The bench of Saktijit Dey and M. Balaganesh has adopted a hyper-technical approach while dealing with. The Delhi Bench of Income …

ITAT Deletes Penalty For Default In Not Deducting TDS On Foreign Remittances
1 year ago

ITAT Deletes Penalty For Default In Not Deducting TDS On Foreign Remittances

Live Law  

The Jaipur Bench of Income Tax Appellate Tribunal has deleted the penalty levied for default in not deducting TDS on foreign remittances.The bench of Sandeep Gosain and Rathod Kamlesh Jayantbhai has observed that the assessee has deliberately not avoided TDS and there is no contumacious conduct on the part of the assessee.The ITO has passed an. The Jaipur Bench of …

Tax Cases Weekly Round-Up: 26 November To 2 December, 2023
1 year ago

Tax Cases Weekly Round-Up: 26 November To 2 December, 2023

Live Law  

Delhi High Court Case Title: Resorts Consortium India Limited Versus ITAT Citation: 2023 LiveLaw 1178 The Delhi High Court has condoned a 79-day delay in filing an appeal as a review petition was filed before the Income Tax Appellate Tribunal. Allahabad High Court Income Tax Authority Cannot Dissect An Otherwise Indivisible Contract In Absence Of Legal Provision: Allahabad High Court …

Employee Can’t Be Penalised For Non-Deposit Of TDS By Employer: Delhi High Court
1 year ago

Employee Can’t Be Penalised For Non-Deposit Of TDS By Employer: Delhi High Court

Live Law  

The Delhi High Court has held that the employer of the petitioner or assessee, having failed to perform his duty to deposit the deducted tax with the department, cannot be penalized. It would always be open for revenue to proceed against the employer of the petitioner for recovery of the deducted tax.The bench of Justice Rajiv Shakdher and Justice Girish …

TDS Paid From Assessee’s Own Account Can’t Form Part Of Consideration Of Service Charges Paid To Overseas Service Provider, No Service Tax Payable: CESTAT
1 year, 1 month ago

TDS Paid From Assessee’s Own Account Can’t Form Part Of Consideration Of Service Charges Paid To Overseas Service Provider, No Service Tax Payable: CESTAT

Live Law  

The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal has held that the TDS amount paid to the Income Tax Department by the appellant from his own account cannot form part of the consideration of the service charges paid to the overseas service provider, and service tax is not payable.The bench of D. M. Misra and Pullela Nageswara …

TDS Not Required To Be Deducted At The Time Of Grant Of ESOP: ITAT
1 year, 3 months ago

TDS Not Required To Be Deducted At The Time Of Grant Of ESOP: ITAT

Live Law  

The Mumbai Bench of the Income Tax Appellate Tribunal has held that TDS is not required to be deducted at the time of grant of an employee stock ownership plan.The bench of Rahul Chaudhary and Prashant Maharishi has observed that the basic objective of TDS is to ‘pay tax as you earn, and the taxes are not required to be …

S. 80-IB Of Income Tax Act - Assessee Not Entitled To Deduction Under On Profit Derived From DEPB And Duty Drawback Schemes: Supreme Court
1 year, 8 months ago

S. 80-IB Of Income Tax Act - Assessee Not Entitled To Deduction Under On Profit Derived From DEPB And Duty Drawback Schemes: Supreme Court

Live Law  

The Supreme Court has ruled that the assessee is not entitled to deduction under Section 80- IB of the Income Tax Act, 1961 on the amount received / profit derived from the Duty Entitlement Pass Book Scheme and the Duty Drawback Schemes. The court noted that in the case of Liberty India, the Apex Court had observed and held that …

Income Tax Exemption On The Voluntarily Payment Made By The Employer To The Employee Out Of Appreciation: ITAT
1 year, 8 months ago

Income Tax Exemption On The Voluntarily Payment Made By The Employer To The Employee Out Of Appreciation: ITAT

Live Law  

The Pune Bench of the Income Tax Appellate Tribunal has held that the payment has been made voluntarily by them out of appreciation for the employee and thus falls outside the rigours of Section 17 of the Income Tax Act. The NFAC also observed that the letter submitted by the assessee stating that the payment received was voluntarily given by …

Tax Cases Weekly Round-Up: 12 March To 18 March, 2023
1 year, 9 months ago

Tax Cases Weekly Round-Up: 12 March To 18 March, 2023

Live Law  

Supreme Court Case Title: Commercial Tax Officer Versus Neeraja Pipes Pvt. Gujarat High Court Case Title: Keenara Industries Private Limited Versus Income Tax Officer The Gujarat High Court has held that the reassessment notices were issued after the lapse of six years and are therefore time-barred. Case Title: Manishkumar Tulsidas Kaneriya Versus Assistant Commissioner Of Income Tax, Central 1, Rajkot …

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court
1 year, 9 months ago

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court

Live Law  

The Delhi High Court has ruled that the revenue department cannot adjust the withheld tax which has not been deposited by the deductor in the Central Government Account, against the refund due and payable to the deductee/assessee. The bench of Justices Rajiv Shakdher and Tara Vitasta Ganju held that adjustment of demand against future refund amounts to an indirect recovery …

TDS Deduction From Salaries: CBDT Issues Circular
2 years ago

TDS Deduction From Salaries: CBDT Issues Circular

Live Law  

The Central Board of Direct Taxes has issued a circular regarding the deduction of tax at source from salaries.The Circular comprehensively explained employers' obligations regarding the deduction of tax at source from salaries under Section 192 of the Income-tax Act, 1961, for the financial year 2022–23.Section 192 of the Income Tax Act, 1961, deals with tax deducted at source. The …

Sec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme Court
2 years, 1 month ago

Sec.194H Income Tax Act Attracted For 'Supplementary Commission' Earned By Travel Agents ; Airlines Liable To Deduct TDS : Supreme Court

Live Law  

The Supreme Court held that Section 194H of the Income Tax Act is attracted in the case of Supplementary Commission amounts earned by the travel agent and therefore Airlines are liable to deduct TDS in this regard.The bench comprising Justices Surya Kant and MM Sundresh upheld the Delhi High Court judgment and overruled the Bombay High Court judgment in CIT …

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court
2 years, 1 month ago

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court

Live Law  

The Kerala High Court has held that where there is no liability to deduct TDS, the mere fact that TDS was so deducted and paid to the Income Tax Department belatedly, cannot give rise to a claim for interest under Section 201 of the Income Tax Act.The single bench of Justice Gopinath P. has observed that the delay in remitting …

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT
2 years, 1 month ago

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT

Live Law  

The Mumbai bench of the Income Tax Appellate Tribunal has ruled that the liability to deduct tax at source under Section 201 read with Section 195 of the Income Tax Act, 1961, is a vicarious liability of the payer of an income and thus, the liability to deduct TDS ceases to exist when the primary liability of the recipient of …

Any sum paid to an employee as a bonus or commission to be allowed as a deduction: ITAT Delhi
2 years, 1 month ago

Any sum paid to an employee as a bonus or commission to be allowed as a deduction: ITAT Delhi

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that any sum paid to an employee as a bonus or commission for services rendered has to be allowed as a deduction.The bench of Saktijit Dey has observed that the reasonableness of the payment or the adequacy of services rendered by the employee is not relevant factors in deciding …

Tax Cases Weekly Round-Up: 9 October To 15 October, 2022
2 years, 2 months ago

Tax Cases Weekly Round-Up: 9 October To 15 October, 2022

Live Law  

Supreme court Case Title: Tata Motors Limited Versus Central Sales Tax Appellate Authority & Others Citation: 2022 LiveLaw 847 The Supreme Court has directed the state of Andhra Pradesh to transfer to Jharkhand the amount of central sales tax deposited by Tata Motors with respect to the sale of buses to the Andhra Pradesh State Road Transport Corporation. Versus Commissioner …

TDS Provisions Not Applicable To Commission Paid To Bank: ITAT
2 years, 2 months ago

TDS Provisions Not Applicable To Commission Paid To Bank: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that TDS provisions are not applicable to commissions paid to banks.The two-member bench of Saktijit Dey and Dr B.R.R. The Delhi Bench of the Income Tax Appellate Tribunal has held that TDS provisions are not applicable to commissions paid to banks. Kumar has observed that commission paid to partners …

Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT
2 years, 4 months ago

Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that interest payment on late payment of TDS is not an eligible business expenditure for deduction and it is not compensatory in nature. The two-member bench of A. D. Jain and Dr. B. R. R. Kumar has observed that the payment of interest on late deposit of TDS levied …

Amendment To Section 36(1)(va) Of Income Tax Act Is Prospective In Nature: Delhi High Court
2 years, 4 months ago

Amendment To Section 36(1)(va) Of Income Tax Act Is Prospective In Nature: Delhi High Court

Live Law  

The Delhi High Court has allowed the assessee- TV Today Network Ltd.'s claims for deduction of expenses in nature of 'consumption incentive' offered to the advertisers for booking more The Bench, consisting of Justices Manmohan and Manmeet Pritam Singh Arora, reiterated that the 'due date', in case of delay by the assessee in depositing the employees' contribution to Provident Fund …

Tax Cases Weekly Round-Up: 24 July To 30 July, 2022
2 years, 4 months ago

Tax Cases Weekly Round-Up: 24 July To 30 July, 2022

Live Law  

Supreme Court Case Title : Union of India vs. M/s Filco Trade Centre Pvt. The Karnataka High Courthas directed the Income Tax Department to issue a 'Nil Tax Deduction at Source' Certificate to Flipkart under Section 195 of the Income Tax Act, 1961, with respect to the reimbursements made by it to Walmart Inc. Madras High Court Case Title: M/s.Gharpure …

Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court
2 years, 5 months ago

Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court

Live Law  

The Delhi High Court has ruled that the Explanation to Section 14A of the Income Tax Act, 1961, added vide the Finance Act, 2022, cannot be presumed to be retrospective in nature since it is clarificatory in nature and alters the law as it stood earlier. The revenue department submitted before the High Court that the ITAT had relied on …

Deliberately Concealing The Income, Assessee Can Be Prosecuted : Madras High Court
2 years, 5 months ago

Deliberately Concealing The Income, Assessee Can Be Prosecuted : Madras High Court

Live Law  

The Madras High Court has ruled that an assessee can be prosecuted for willfully and deliberately concealing his income by not filing his income tax return within the stipulated time, even after the return belatedly submitted by the assessee is accepted by the revenue authorities on the basis of which an assessment order is passed. The Court noted that only …

Notice Didn't Contain Categorical Indication Of Furnishing Inaccurate Particulars Or Concealment Of Particular Income: ITAT Quashes Penalty Proceedings
2 years, 6 months ago

Notice Didn't Contain Categorical Indication Of Furnishing Inaccurate Particulars Or Concealment Of Particular Income: ITAT Quashes Penalty Proceedings

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has quashed the penalty proceedings as the notice issued to the assessee did not mentioned a categorical indication of specific violation in respect of furnishing inaccurate particulars or concealment of particular income. Therefore, the AO held it to be a case of concealment of the income and an assessee penalty was …

Underreporting Of Income Due To Re-Computation Of Disallowance By The AO, Does Not Amount To Misreporting Of Income: Delhi High Court
2 years, 6 months ago

Underreporting Of Income Due To Re-Computation Of Disallowance By The AO, Does Not Amount To Misreporting Of Income: Delhi High Court

Live Law  

The Delhi High Court has ruled that where the underreporting of income allegedly done by the assessee is due to the re-computation of the disallowance under Section 14A of the Income Tax Act, 1961 by the Assessing Officer, it would not amount to misreporting of income. The revenue department levied a penalty on the assessee Prem Brothers Infrastructure LLP under …

Assessee Not Immune From Penalty U/S 270AA Income Tax Act Where Proceedings Initiated For Misreporting Of Income: Delhi High Court
2 years, 8 months ago

Assessee Not Immune From Penalty U/S 270AA Income Tax Act Where Proceedings Initiated For Misreporting Of Income: Delhi High Court

Live Law  

The Delhi High Court has observed that it is only in cases where proceedings for levy of penalty have been initiated on account of alleged "misreporting of income" that an assessee is prohibited from applying and availing the benefit of immunity from penalty and prosecution under Section 270AA of the Income Tax Act, 1961.A division bench comprising of Justice Manmohan …

No Wilful Evasion Of Tax - Madras High Court Quashes Prosecution Under Section 276C (2) Of Income Tax Act
2 years, 8 months ago

No Wilful Evasion Of Tax - Madras High Court Quashes Prosecution Under Section 276C (2) Of Income Tax Act

Live Law  

The Madras High Court has ruled that prosecution under Section 276C of the Income Tax Act for wilfully attempting to evade payment of tax cannot be initiated against an assessee who merely defaults to pay tax on time under the Act. The Counsel submitted that mere delay in payment of tax without an intention to evade tax would not constitute …

S. 194-I Income Tax Act | TDS Can't Be Deducted In Absence Of Payment Of Rent: Orissa High Court
2 years, 8 months ago

S. 194-I Income Tax Act | TDS Can't Be Deducted In Absence Of Payment Of Rent: Orissa High Court

Live Law  

The Orissa High Court has held that in absence of payment of rent, the obligation to deduct tax at source under Section 194-I of the Income Tax Act, 1961 does not arise at all. While dismissing an Income Tax Appeal, a Division Bench of Chief Justice Dr. S. Muralidhar and Justice R.K. Pattanaik observed, "In absence of there being any …

AO's claim That The Assessee Is Only Into Job Work And Not Manufacturing Rejected, Deduction Allowed By ITAT Delhi
2 years, 9 months ago

AO's claim That The Assessee Is Only Into Job Work And Not Manufacturing Rejected, Deduction Allowed By ITAT Delhi

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal while allowing the deduction under Income Tax Act has rejected the claim of AO that the assessee is only into job work and not manufacturing. The assessee electronically filed its return of income, declaring nil income after claiming a deduction under section 80IC of the Income Tax Act. During the course …

Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates
2 years, 9 months ago

Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates

Live Law  

The Supreme Court has reiterated that Banks are exempted from the mandate of Section 194A of the Income Tax Act, 1961, to deduct tax at the source, on payment of interest to corporations established by a statute. In the facts of the present case, the Apex Court held that in terms of the notification dated 22.10.2022 issued by the Central …

Disallowance Can't Be Made On Failure Of Assessee To Deduct TDS If Employee's Commission Shown As Part Of Salary Income: Bombay High Court
2 years, 9 months ago

Disallowance Can't Be Made On Failure Of Assessee To Deduct TDS If Employee's Commission Shown As Part Of Salary Income: Bombay High Court

Live Law  

The Bombay High Court has held that disallowance cannot be made on failure of assessee to deduct TDS if employee's commission is shown as a part of salary income. The Assessing Officer had noted that respondent/assessee had made a provision for commission for the Chairman and the Managing Director of the Company at the year end but not deducted TDS …

Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court
3 years, 3 months ago

Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court

Live Law  

The Supreme Court has held that the amount of income tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax before 2012-2013 Financial Year.Therefore, the assessee cannot be held liable for interest under Section 234B of Income Tax for short-fall of advance tax which arises due to reducing the income tax deductible …

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