Calcutta High court stays TDS collection under section 194N income tax till sep 30.
The government has introduced section 194 194 n in the union budget 2019 put forward on 5th July 2019 in order to prevent cash transaction in the country and the to encourage the digital economic section 194 in- TDS on cash withdrawal over above 1 crore has been oriented to the finance bill 2019.
the person making the cash payment will have deducted TDS under section 194 in such person are any bank whether it is public or private sector ,
a corporate bank
or post office.
There are certain cats categories of a person which is called payee to whom the provision of section 194 and will not apply. they are
1. government body
2.Bank
3. business correspondent of a banking .
4.white label ATM operator of any Bank.
The Calcutta high Court on 8thThursday passed an interm order to holding back or intended to keep under control the income tax deduction at source TDS under section 194 and of the income tax act 1961.
the Hon'ble Justice Md. Nizamuddin - Calcutta High Court judge was to make an official decision about who is right in a dispute upon a plea challenging the constitutional validity of the provision which was took place by the finance act 2019 and become effective from September 1 2019. the provision warrant the deduction of tax at source at the rate of 2% on the cash withdrawal from among other thing which is inter alia a banking company heavy amount of rupees one crore in the financial year.
In just a blink of an eye case the petitioner had challenge the constitutional validity of the provision on the ground that the impose is beyond that imposes faraway from the legislative competence the Parliament.
in the seventh schedule of the Constitution of India defines that the Pacific a locations of power and also the functions between Union and State so in the case schedule VII of the Indian Constitution allows the Parliament to enact laws for imposition , collection imposes on the taxes on income.
As a result the Parliament cannot legislate a provision arrangement the detection of tax at source the Honorable Kerala high Court involving the same issue and one of which is on 13th August 2020 passed in
kanan Devan Hills plantation company Pvt Ltd vs Union of India, where the Hon'ble Court admitted on the same issue of deduction of tax on source under tax act 1961.