Whether Assessee to deduct TDS on payment made directly to operation/maintenance services providers u/s 194-I?

Last updated: 11 January 2021

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Quick Summary

This tax appeal concerns whether an assessee is required to deduct Tax Deducted at Source (TDS) under Section 194-I of the Income Tax Act on payments made directly to providers of operation and maintenance services. The assessee argues that the order imposing penalties was barred by limitation, as it was passed beyond the stipulated six-year period from the end of the financial year in which the payment was made or credited.

Court :
ITAT New Delhi

Brief :
This appeal is filed by the assessee against the order dated 16/1/2020 passed by CIT(A)-38, Delhi for Assessment Year 2011-12.

Citation :
I.T.A. No. 889/DEL/2020 (A.Y 2011-12)

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘D’ NEW DELHI

BEFORE SHRI O. P. KANT, ACCOUNTANT MEMBER
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER

I.T.A. No. 889/DEL/2020 (A.Y 2011-12)
(THROUGH VIDEO CONFERENCING)

Kapoor Watch Company Pvt. Ltd.
G-7, South Extension, Part-1,
New Delhi
AAACK3885A
(APPELLANT)

ACIT
Circle-75(1)
New Delhi
(RESPONDENT)

ORDER

PER SUCHITRA KAMBLE, JM

This appeal is filed by the assessee against the order dated 16/1/2020 passed by CIT(A)-38, Delhi for Assessment Year 2011-12.

2. The grounds of appeal are as under:-

“1. That order dated 30.3.2018 u/s 201(1 )/201(1 A) of the Act for the financial year 2010-11 was barred by limitation and therefore deserved to be quashed as such.

1.1 That the learned Commissioner of Income Tax (Appeals) has failed toappreciate that since order u/s 201(1)/ 201(1 A) of the Act was beyond theperiod of six years from the end of financial year in which the payment wasmade or credit was given by the appellant company in view of the provisionscontained in section 201(3) of the Act, therefore order made was barred bylimitation.

2. That the learned Commissioner of Income Tax (Appeals) otherwise tooerred both in law and facts in upholding the order concluding that the appellantcompany be „assessee-in-default for a sum of Rs. 1,68,499/- u/s 201(1) of the Act and Rs. 1,43,963/- u/s 201 (1 A) of the Act.

To know more in details find the attachment file

FAQ :

The main issue is whether TDS under Section 194-I should be deducted on payments made directly to operation and maintenance service providers.

The assessee argued that the order imposing penalties was barred by limitation as it was passed beyond the six-year period allowed by Section 201(3) of the Act.

The relevant sections are 194-I (regarding TDS on rent), 201(1) (assessee in default), and 201(1A) (interest on short deduction/non-deduction).

The assessment year for this appeal was 2011-12.