Brief of the case:
When payee or resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the Assessee would not be treated as a person in default. Chandigarh Bench of ITAT held in the above in various appeals against Punjab Infratructure & Development Board, Chandigarh. ITAT relied upon the case of Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd Vs. CIT in [2007] 293 ITR 226 (SC), wherein the Hon’ble Supreme Court held that where the Payee has already paid tax on the income on which there was a short deduction of tax at source, recovery of tax cannot be made once again from the tax deductor.
Facts of the case:
- During the course of TDS inspection and assessment proceedings u/s 201(1) and 201(1A) the AO noticed that assessee in its receipt and expenditure account for the year ending 31.3.2009 had made expenditure of Rs. 492,68,37,890/- under the head ‘project related expenditure’ to different parties but the assessee had not deducted tax on these payments.
- The AO also observed that during financial year 2008-09, the Person Responsible (PR) has received an amount of Rs. 7,36,10,000/- on account of toll fee for which no TDS was collected by the PR.
- AO Also observed that assessee is in agreement with Govt. of Punjab and according to which project has to hand over of govt. after completion of the project.
- AO held that PR was required to deduct tax on the payments made to the contractor / builder u/s 194C of the Act but it was not done and so he treated the PR as ‘assessee in default’ and created demand in various years.
- Assessee filed appeal against the orders and CIT (A) Allowed appeals of the assessee.
- During the course of appellate proceedings before CIT(A), the assessee filed an application under Rule 46A for placing on record the balance sheet, certificate of Chartered Accountants and a copy of the Income-tax return of the Payee M/s Rohan Rajdeep Tollways Ltd.
- The CIT(A) forwarded the aforesaid evidence to the Assessing officer for his comments and after receiving the remand report, the CIT(A) admitted the additional evidence produced by the assessee.
Contention of the revenue:
