MES Medical College Hospital Vs CBDT (Kerala High Court)
Kerala High Court held that lessee is liable to deduct TDS u/s. 194-I of the Income Tax Act, however, there is a dispute for ownership of the property. Then, in such case lessee is directed to deduct TDS and deposit under his TAN as unclaimed challan.
Facts- The petitioner had taken on lease a building after entering into a lease agreement with the 3rd respondent. After taking on lease the building, the 3rd respondent informed the petitioner that the property had been transferred into the name of his wife, the 4th respondent. Accordingly, the petitioner entered into a new lease agreement with the 4th respondent on 21-04-2022. It appears that respondent Nos.5, 6 and 7 filed a suit before the Subordinate Judges Court, Manjeri for recovery of possession, arrears of rent, damages etc. claiming that they are the rightful owners of the property. Pursuant to an order issued by the court, the petitioner started depositing the rent payable in the court.
The petitioner submits that the petitioner is willing to deposit the rent for the subsequent periods also before the court as directed by the court. The petitioner is before this Court on account of the provisions contained in Section 194-I of the Income Tax Act, 1961, which requires the petitioner to deduct TDS on the rent paid by it and deposit the same with the Income Tax Department. It is submitted that on account of the dispute between respondent Nos.3 and 4 on one side and respondent Nos.5, 6 and 7 on the other, the petitioner is in a situation that it cannot deduct and pay TDS as the payee is not readily identifiable.
