Case Law Details
Case Name : M/s P V S Memorial Ltd. Vs CIT (Kerala High Court)
Appeal Number : IT Appeal No.-16/2014
Date of Judgement/Order : 20/07/2015
Related Assessment Year :
Courts :
All High Courts Kerala High Court
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Brief of the case:
The Hon’ble Kerala HC in in the case of CIT vs. M/s P V S Memorial Hospital Ltd. held that deduction of TDS under a wrong section amounts to non-compliance with the provisions of Chapter XVII-B which results in applicability of section 40(a)(ia) where the payments get disallowed and action u/s 201(1).
Facts of the case:
- The assessee is hospital entered into agreement with M/S Lakeshore Hospital and Research Centre Limited to hire various professional services in assessee’s hospital. The assessee deducted tax on such payments @2% u/s 194C considering the same as payment made under contract.
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Author Bio
The entire intention of legislation is safeguard the revenue of state. So, in my view, if there is a thin line between the two sections, better to deduct and pay u/s 194J.
However, in the above mentioned case, it should have been given the opportunity to correct the mistake. correct the mistake.
in my opinion expenditure should be allowed and difference due to deduction u/s 194 C should be deposited with interest due to late payment of tds
What if the wrong deduction of TDS happens the other way, i.e., for any transaction where TDS is applicable u/s.194 C, but TDS is actually deducted u/s.194 J, where it results in higher deduction of TDS. In this case also, TDS is not correctly deducted in compliance with Chapte XVII-B; in this scenario also, will the disallowance u/s.
40(a)(ia) and proceedings u/s.201(1) will apply? or wherever there is a thin line of difference between classifying the service u/s.194(c) or 194(j), is it better to deduct TDS u/s.194 J. Can any one from the forum clarify this, please.
Thanks.