9911796707
TMI Blog2000 (10) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... which raised loan from Indian Bank Merchant Banking Services Ltd. (hereinafter called IBMBSL for short) The assessee i.e., M/s Hyderabad Allwyn Ltd. was paying interest to IBMBSL and the amount of interest payable by the said assessee to IBMBSL is shown in the table below together with the amount of tax deducted at source and paid to the Government exchequer. ----------------------------------------------------------- S. Fin. year Date Interest TDS Date of No. credited payment ----------------------------------------------------------- 1. 1991-92 31-3-1992 27,56,712 6,34,044 30-12-1994 31-3-1992 15,06,575 3,46,512 30-1-1995 31-3-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectively. Tax deducted at source in aggregate was to the tune of Rs. 31,72,299. Though the TDS was deducted by the assessee-company, it did not pay it to the Government within the time as prescribed under the relevant rules. The AO demanded the amount of TDS of Rs. 31,72,299 and interest under s. 201(1A) amounting to Rs. 11,43,433. The amount of TDS was required by the IT Department and assessee is not challenging the action of the Department to recover the amount of TDS. What the assessee is disputing before us, is the action of the AO in charging interest under s. 201(1A) of the IT Act, 1961. 4. On the date of hearing, learned counsel for the assessee raised the following contentions: (i) Assessee was not liable to deduct tax at sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er contended that certificate issued under s. 197 was dt. 6th Jan., 1993, and could have been enforced in respect of the TDS required to be deducted on or after that date and it does not dilute the default already committed by the assessee, prior to that date. 6. In reply, learned counsel for the assessee placed reliance on CBDT Circular No. 774, dt. 17th March, 1999, reported in (1999) 152 CTR (St) 219 : (2000) 236 ITR 250 (St) to drive home his point that certificate under s. 197 issued on 6th Jan., 1993, would exempt the assessee from deduction of tax at source even in respect of the tax deductible prior to that date. He contended that Circular No. 774 clearly says that certificate under s. 197 should not be acted upon, if submitted af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not liable to deduct tax at source, in view of the certificate dt. 6th Jan., 1993, issued under s. 197 to the payee. In fact, as on the date of deduction i.e. as on 31st March, 1992, and as on 30th Sept., 1992, the liability to deduct tax at source was there and the tax in fact was deducted by the assessee-company. Certificate dt. 6th Jan., 1993, cannot be said to be having any retrospective effect and would apply in respect of the amount of income credited or paid on or after that date. Since in this case, the liability to deduct tax at source arose much before 6th Jan., 1993, we hold that the assessee was liable to deduct tax at source and by not depositing it after deduction in the Government treasury, within the time prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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