Rao Khem Chand Vidya Vihar Samiti Vs ITO (ITAT Delhi)
The ITAT Delhi dealt with a charitable trust registered u/s 12AA which was treated as assessee-in-default u/s 201/201(1A) for failure to deduct TDS on advertisement expenses and interest payments. The AO-TDS raised demand of TDS and interest and also levied late fee u/s 234E, which was confirmed by the CIT(A). The assessee argued that before declaring it as assessee-in-default, the AO must verify whether the payees had already paid tax as mandated under Explanation to section 191 and first proviso to section 201.
The Tribunal admitted additional legal grounds, holding that the issue goes to the root of jurisdiction. It observed that there was no finding by the AO regarding whether the recipients had discharged tax liability nor any verification exercise undertaken. At the same time, the assessee had also not furnished Form 26A certificate as required. Considering the legal position, the Tribunal remanded the matter back to the AO to verify payment of taxes by the payees and re-decide the issue of treating the trust as assessee-in-default afresh. Consequently, other grounds were not adjudicated and the appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
