9911796707
TMI Blog1995 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has taken common grounds to urge that the CIT (Appeals) erred in his direction and he ought to have appreciated that the admission of interest income and payment of tax thereon by the recipients would not vitiate the liability on the part of the assessee to deduct tax at source and it would not relieve the assessee of its liability to interest under section 201(1A) of the I.T. Act, 1961. Therefore, it is prayed that the order of the CIT (Appeals) should be set aside and that of the Assessing Officer should be restored. The Assessing Officer has levied interest under section 201(1A) for failure to deduct tax at source from the interest credited to the accounts of the various recipients under section 194A. Demand notice was issued for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. However, the ratio of the Madras High Court in the case of CIT v. Kumudam Publications (P) Ltd [1991] 188 ITR 84 was also taken into account. 4. At the time of hearing, the ld. Departmental Representative has been heard at great length. According to him, it is not the duty of the Assessing Officer to verify whether each and every recipient of interest has himself paid tax on such interest income because it is neither practicable nor feasible to do so. Even if, it is so, it is a fit case for levy of interest. Therefore, he vehemently urged that the CIT (Appeals) was not justified in restricting the quantum of interest levied under section 201(1A) and therefore, the orders of the Assessing Officer should be restored in toto. 5. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and employee and, therefore, the employer, even if, he fails to deduct tax at source, it can be paid by the employee concerned and the employer could ensure such payment by the employee because of the complete control over the employees in the matter-discharge of liability to deduct tax from salary and payment to the Government. Both the decisions of the Calcutta High Court are based on the doctrine of double taxation of the same income which is equally frowned at by the Taxation Laws. The various case laws relied upon by the assessee in reply to the show-cause notice relate to the deduction of tax at source under section 192 pertaining to salary only and not under section 194A which is under consideration. At the same time, the Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es stops running from the date of payment of tax by the employees concerned will not be applicable when the interest is paid by the respondent-assessees to multifarious persons or parties over which neither the respondent-assessees nor the Assessing Officer would have any control to ensure the payment of tax on the interest income received by the recipients. Therefore, the aforesaid proposition could not be extended or stretched to the payment of interest under section 194A of the Act, by relying on the judgment of the Calcutta High Court cited . Further, the explanation offered by the assessees was two-folded viz., paucity of funds and inclusion of such interest income by various recipients and the payment of tax thereon. 8. I have alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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