Form 26A Verification Ordered for TDS Default on HUDCO Interest: ITAT Jaipur

Rajasthan Urban Drinking Water Sewerage and Infrastructure Corporation Ltd. Vs DCIT (ITAT Jaipur)

Summary: ITAT Jaipur allowed for statistical purposes five appeals of Rajasthan Urban Drinking Water Sewerage and Infrastructure Corporation Ltd. arising from orders under Section 201(1)/201(1A) of the Income Tax Act, 1961. The appeals concerned different quarters of financial years 2017-18 and 2018-19 relating to assessment years 2018-19 and 2019-20. The disputed payments were interest paid to Housing and Urban Development Corporation Ltd. (HUDCO) on loan facilities availed by the assessee. The Assessing Officer treated the assessee as an “assessee in default” for non-deduction of tax at source and raised demands for TDS and consequential interest. The CIT(A), by separate orders dated 08.10.2025, dismissed the appeals ex-parte since nobody appeared for the assessee.

The assessee pointed out before the Tribunal that during proceedings before the AO it had sought time to obtain and furnish Form No. 26A demonstrating that HUDCO had taken the interest income into account in its returns and paid taxes thereon. Its earlier written reply also stated that for FY 2016-17 no TDS was required because HUDCO was a 100% Government company, while for FY 2017-18 Form 26A had been requested and for FY 2018-19 advance-tax receipts were being furnished pending finalisation of HUDCO’s annual accounts. For FY 2019-20, the assessee referred to Notification No.26/2019, S.O.1399(E), dated 20.03.2019, notifying HUDCO for purposes of Section 194A(3)(iii)(f). Before the Tribunal, learned counsel stated that the assessee was now in possession of Form 26A for all the interest payments to HUDCO involved in the appeals and placed copies before the Bench.