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TMI Blog2006 (1) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... ly till the date of payment of tax by the payee from the appellant. Even prior to inserting of Explanation to section 191 Courts have taken a view that in a case where the payee pays the tax the payer i.e., the person responsible for deduction of tax at source cannot be held to be an assessee in default u/s 201. The Hon ble Gujarat High Court in the case of CIT v. Rashikesh Apartments Co-operative Housing Society Ltd.[ 2001 (6) TMI 17 - GUJARAT HIGH COURT] and the Hon ble M.P. High Court in the case of CIT v. M.P. Agro Morarji Fertilizers Ltd.[ 1988 (9) TMI 30 - MADHYA PRADESH HIGH COURT] have taken a similar view. The appellant cannot, therefore, be treated as an appellant in default, if it is found that the payee has made payment on tax of the amounts received from the appellant. Consequently the appellant cannot be considered as an assessee in default . As far as charge of interest is concerned it cannot be from the date of deductibility of tax till the payment by the appellant. On the other hand it could be only put to the date of payment of tax by the payee i.e., M/s. TAB. This is because interest is compensatory in nature and the revenue cannot claim payment of interest for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at 1 per cent if the programme was in the nature of advertisement and at 2 per cent if it was not in the nature of advertisement. The appellant, therefore, submitted that it had correctly deducted tax at source. 3. The Assessing Officer however held that the payments made fell within the category of section 194J. The Assessing Officer held that dubbing is a kind of service which are rendered by voice artists and, therefore, fell within the meaning of professional services rendered by an artist. The Assessing Officer accordingly worked out tax short deducted and also levied interest on such tax short deducted, under the provisions of sections 201 and 201A of the Act. 4. On appeal by the appellant apart from the other submissions, the submissions of the appellant was that TAB had already submitted their return of income and had paid full tax on the amount received from the assessee. Since the payee had already paid the tax, the payer could not be treated as an "assessee in default" and CBDT has admitted this position in Circular No. F.No. 275/201/95-IT(B), dated 29-1-1997. It was submitted that the plea is supported by the decision of the ITAT, Madras Bench in the case of Crescen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the appellant as an "assessee in default", the CIT(A) held that the claim of the appellant deserved to be accepted and in this regard the CIT(A) also referred to the CBDT Instruction No. 275/Ban/201/95-IT(B), dated 29-1-1997. The CIT(A) however directed the Assessing Officer to verify the actual payment and give credit for such payment before calculating short deduction of tax. 7. On the aspect of payment of interest under section 201(1A) of the Act the CIT(A) held that charging of interest was mandatory and automatic. He, therefore, directed that interest has to be charged for the period commencing from the date of payment by the appellant to TAB till the date of payment of tax by the payee i.e., TAB. 8. Aggrieved by the direction of the Assessing Officer to charge interest under section 201(1A) of the Act from the date of payment by the appellant to TAB till the date of payment of tax by deductee i.e., TAB, the revenue has preferred the present appeal. According to the revenue, the period for which interest was to be levied on the appellant would be from the date on which the appellant made payment to TAB and the date on which the appellant paid the tax deducted at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance Act of 2003 w.e.f. 1-6-2003. A plain reading of the aforesaid Explanation would show that it is clarificatory in nature and, therefore, would apply for the financial year involved in these appeal also. In the case of Crescent Housing (P.) Ltd. v. ITO [2002] 80 ITD 317 (Mad.), the Hon ble Madras Bench of the ITAT, it has been held that in the event of payment of tax by the recipient ( i.e., the payee from the appellant) no further demand could be raised on the person responsible for deducting tax at source. The aforesaid decision related to the financial years 1996-97 and 1997-98. In the said decision even in respect of interest under section 201(1A) it was held that it could be levied only till the date of payment of tax by the payee from the appellant. Even prior to inserting of Explanation to section 191 Courts have taken a view that in a case where the payee pays the tax the payer i.e., the person responsible for deduction of tax at source cannot be held to be an "assessee in default" under section 201. The Hon ble Gujarat High Court in the case of CIT v. Rashikesh Apartments Co-operative Housing Society Ltd. [2002] 253 ITR 310 and the Hon ble M.P. High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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