ITAT rules on provisions of TDS under the Income Tax Act

ITAT rules on provisions of TDS under the Income Tax Act

It directs the authorities not to take any coercive action until the hearing of the appeal

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of the Tax Deducted at Source (TDS) under the Income Tax Act, 1961 is not applicable to the reinsurance commission.

While concluding the assessment proceedings, the assessing officer (AO) had made a disallowance under the IT Act due to alleged non-compliance with the provisions. The assessee claimed that the provision was not applicable to the reinsurance commission.

The bench comprising President GS Pannu and Judicial Member Saktijit Dey observed that the issue in dispute appeared to be in favor of the assessee by a number of judicial precedents.

ITAT ruled, "We are inclined to grant expeditious hearing of the corresponding appeal of the assessee. The Registry is directed to fix the appeal for hearing on 28 April 2022. Paper-books, if any, shall be filed by the parties sufficiently ahead of the date of hearing of the appeal in accordance with the extant rules. Since the date of hearing of the appeal is announced in the open court in presence of both the parties, issuance of separate notice for hearing to the parties is dispensed with."

"As regards the impugned demand, the AO may pursue the assessee for paying a part of the demand. However, no coercive action shall be taken by the AO for the recovery of the demand till the date of hearing of the appeal. In case of any unnecessary adjournment being sought by the assessee, the interim protection granted to the assessee will be vacated and the assessee will also lose the benefit of early hearing of appeal," the tribunal added.