Apoorva Leasing Finance and Investment Company Limited Vs ITO (ITAT Delhi)
Delhi ITAT Deletes Interest U/s 201(1) & 201(1A) Where Deductee Paid Tax & Form 26A Was Furnished
The Delhi ITAT allowed the assessee’s appeals and deleted the interest levied under sections 201(1) and 201(1A) for failure to deduct TDS on payments made to GMADA towards allotment of land. The assessee contended that it had made the payments under a bona fide belief that GMADA, being a Government authority, was not liable to TDS. It also furnished Form 26A, certifying that GMADA had duly accounted for the receipts in its return of income and paid the applicable taxes.
The Tribunal relied on the Supreme Court decision in Hindustan Coca Cola Beverage (P.) Ltd., the CBDT Circular No. 275/201/95-IT(B), and the Madras High Court decision in S.A.A. Ispahani Trust, holding that once the deductee has included the income in its return and discharged the tax liability, the deductor cannot be treated as an assessee in default. In the present case, Form 26A conclusively established that GMADA had offered the receipts to tax.
Accordingly, the Tribunal held that the levy of interest under sections 201(1) and 201(1A) was unsustainable and set it aside. The same view was applied to the connected appeals for the subsequent assessment years, and all three appeals were allowed.
Cases Discussed
- A.A. Ispahani Trust vs. ITO (Madras High Court), (2013) 216 Taxman 1 (Mad.)
- Hindustan Coca Cola Beverage (P.) Ltd vs. CIT (Supreme Court), (2007) 293 ITR 226 (SC)
- CIT vs. Rishikesh Apartments Co-op. Housing Society Ltd. (Gujarat High Court), (2002) 253 ITR 310 (Guj.)
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeals filed by the Appellant/Assessee are against order dated 14.11.2025, 17.11.2025 and 17.11.2025 of the Ld. Commissioner of Income Tax (Appeals)-4, Kolkata (hereinafter referred to as ‘the CIT(A)’) u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of assessment order dated 08.04.2025 of Ld. Assessing Officer / ITO, Ward No. 73(1), Room No. 401, 4th Floor, Aayakar Bhawan, Laxmi Nagar, Delhi (hereinafter referred to as ‘the AO’) u/s 201/201(1A) of the Act for Assessment Year 2022-23 to 2024-25 respectively.
