Case Number: ITA 5965/DEL/2019
Appellant: ACIT, Circle-76(1), New Delhi
Respondent: TCIL Bina Toll Road Ltd., New Delhi
Assessment Year: 2014-15 (26Q-Q4)
Order Type: Final Tribunal Order
Date of Order: 2022-12-06
Pronounced On: 2022-12-06
Introduction:
This case involves an appeal filed by the Additional Commissioner of Income Tax (ACIT), Circle-76(1), New Delhi, against the order of the Commissioner of Income Tax (Appeals)-XXXI, New Delhi [CIT(A)], which provided relief to the respondent, TCIL Bina Toll Road Ltd., in a matter concerning the assessment year 2014-15. The issue arose due to an inadvertent error in mentioning the wrong Tax Deduction and Collection Account Number (TAN) while depositing Tax Deducted at Source (TDS), which led to a demand being raised under Section 200A of the Income Tax Act, 1961.
Background and Grounds of Appeal:
TCIL Bina Toll Road Ltd., a subsidiary of Telecommunication Consultants India Ltd. (TCIL), a Government of India undertaking, executed a toll road project in Bina, Madhya Pradesh. The respondent company deducted TDS at a lower rate of 0.25% on payments made to its holding company, TCIL, in compliance with a certificate issued under Section 197 of the Income Tax Act. However, while depositing the TDS, the respondent inadvertently mentioned the TAN allocated for its Delhi office (TAN: DELT10348C) instead of the TAN for its Bina office (TAN: BPLT01777G).
This mistake led the Assessing Officer (AO) to raise a demand under Section 200A of the Act, alleging lesser deduction of tax due to the wrong TAN being quoted. The demand amounted to Rs. 1,22,36,670/-, which the respondent contested on the grounds that the mistake was bona fide and should be rectified without imposing such a significant demand.
The respondent appealed to the CIT(A), who, after reviewing the case and calling for a remand report from the AO, found that the mistake was indeed inadvertent and occurred due to the wrong TAN being mentioned. The CIT(A) granted relief, directing the AO to allow the correction and reverse the demand after due verification of the facts.
Tribunal’s Analysis and Findings:
The Tribunal examined the facts of the case and the CIT(A)’s decision. It noted that the respondent had two TANs—one for its Delhi office and another for its Bina office. The lower TDS deduction certificate under Section 197 was issued with reference to the TAN of the Bina office, as the payments were related to the Bina Toll Road Project.
The Tribunal recognized that the respondent’s error in quoting the wrong TAN was a genuine mistake and that the payments were indeed made under the project covered by the Bina office TAN. The Tribunal agreed with the CIT(A) that the demand raised under Section 200A due to this mistake was unjustified. The relief granted by the CIT(A) was considered fair and equitable, as it ensured that the mistake was corrected without penalizing the respondent for what was clearly an administrative oversight.
The Tribunal also noted that the respondent had immediately brought the error to the Department’s notice, but the rectification was not possible due to the absence of a provision allowing such a correction in the TDS deposit process. The Tribunal upheld the CIT(A)’s decision, finding no error in the relief granted.
Conclusion:
The Tribunal dismissed the appeal filed by the Revenue, thereby confirming the relief granted to TCIL Bina Toll Road Ltd. by the CIT(A). The demand raised under Section 200A due to the wrong TAN being mentioned in the TDS deposit was quashed, and the respondent was allowed to rectify the mistake without facing an undue financial burden.
Final Judgment:
The appeal filed by the ACIT, Circle-76(1), New Delhi, is dismissed. The relief granted by the CIT(A) to TCIL Bina Toll Road Ltd. is upheld, and the demand under Section 200A is quashed.
Order Pronounced: 6th December 2022
Judges: Shri Saktijit Dey, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member
Reference: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI
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