Brief of the case:
In the case of Oil & Natural Gas Corporation Ltd. Vs. DCIT CPC-TDS, assessee was required to deduct tax and has deducted TDS @ 2% of sum paid/credited to GETCO Ltd. but due to filing of wrong PAN of deductee it has been deemed as assessee in default and accordingly 18% of remaining TDS (20% (-) 2%) has been demanded from the assessee. ITAT admitted contention of the assessee as per proviso to sub-section (1) of section 201 (A) and it was held that an opportunity as per proviso should be provided to the assessee.
Facts of the case:
- Assessee is a PSU and has been calculating, deducting and depositing income deducted at source as per the provisions of Income-tax Act.
- During quarters 1, 2 & 3 of FY 2013-14 assessee deducted tax at source from one of the contractors namely Gujarat Energy Transmission Corporation Ltd. i.e. GETCO Ltd. and the assessee was required to deduct 2% from the sum paid/credited to the deductee.
- Assessee duly deducted and deposited the tax and filed the quarterly TDS return in form 26Q as per Income-tax Rules.
- Inadvertently the assessee mentioned wrong PAN of the deductee in Form 26Q due to which Centralized Processing Cell –TDS treated wrong PAN as no PAN and accordingly created demand for all the three quarters by imposing a burden of 18% as difference of low TDS deducted.
- Assessee tried to rectify the mistake by filing correction statement but the same was rejected for the very reason that the system only allows the change of 4 characters subject to maximum of two numerical characters and two alfa characters.
- Whereas in the wrong PAN quoted by the deductor there were more than 4 changes and, therefore, correction statement was not accepted.
Contention of the revenue:
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