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TMI Blog2010 (5) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... d in confirming the order of the learned Assessing Officer, rejecting the application under section 154 and thus ignoring the ratio of several judgments including those of the hon'ble Supreme Court and the jurisdictional High Court on the issue involved in this case. (2) On the facts and in law, the learned Assessing Officer/Commissioner of Income-tax (Appeals) erred in holding that benefit of TDS is to be allowed from April 20, 2001 though interest is exigible on the same amount (i.e., bank interest) with effect from the date of default under sections 234A and 234B in respect of each assessment year." Briefly stated, the facts noted by the Assessing Officer in paragraphs 2.2 and 2.5 of his order passed by him under section 154 on January ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of interest amounting to Rs. 19,07,078 on which TDS at Rs. 2,13,593 has not been offered for tax purposes by the assessee rather she claimed TDS credit on the same amount deducted by the Oriental Bank of Commerce, Rohtak. During the course of assessment proceedings, the assessee was asked as to why interest amounting to Rs. 19,07,078 may not be added back to the total income of the assessee. During the assessment proceedings, the assessee replied dated March 23, 2005, stating that she is maintaining accounts on the mercantile basis and interest earned by her may be taken on the accrual basis. Further, the statement of Smt. Shobha Rani is corroborated for the facts that in computation sheet enclosed with the said return she has offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis herself. It means that the assessee has added the interest of Rs. 13,615 on accrual basis. 2.5 The record has been perused regarding income-tax payments by the assessee including TDS and it is revealed that as per TDS was deducted on April 20, 2001 amounting to Rs. 21,13,598 on a sum of Rs. 19,07,078 as interest from the Oriental Bank of Commerce, Rohtak (only one certificate for payments made was issued) on other payment of income-tax was made by the assessee prior to this date, i.e., April 20, 2001 for any of the assessment years. The credit of TDS has been given from the date it was deducted by the tax deductor, assessee was neither doing any business nor field any return of income prior to the assessment year 2002-03 and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al's decision as available at pages 83 to 84 of the paper book. It is submitted that in these paragraphs, it is held by the Tribunal that interest under sections 234A and 234B are chargeable but for that purpose the TDS has to be reduced from the amount of tax payable. It is submitted that while passing the appeal effect order, the Assessing Officer has reduced the amount of TDS from the amount of tax payable but the same was reduced only with effect from April 20, 2001, i.e., the actual date of TDS and not from the very beginning. It is submitted that since this is the default of the bank regarding late deduction of the TDS in the relevant year and for that, interest cannot be charged from the assessee. Reliance was placed on the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer with effect from April 20, 2001, i.e., the actual date of TDS by the bank and not from the first date from which interest has been charged. The claim of the assessee before us is that interest should be worked out after deduction of the TDS from the very first date of the charging of interest. We are in agreement with the learned authorised representative for the assessee on this aspect because as per the provisions of sections 234A and 234B, for the propose of computation of interest under these two sections, from the amount of the assessed tax, the TDS amount has to be reduced. It was so directed by the Tribunal also in the assessee's own case as per its earlier order dated February 28, 2007. The dispute in the present case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the assessee under sections 234A and 234B should be from the actual date of TDS by the payer, i.e., bank or from the first date of the charging of interest. As per the provisions of these two sections, i.e., sections 234A and 234B, there is no such condition imposed that such reduction of TDS from the amount of assessed tax should be from the actual date of TDS by the payer. Under this legal and factual position, we are of the considered opinion that when interest income of the assessee is made liable to tax for the relevant assessment year of which such income is related to, the TDS deducted therefrom has to be reduced from the amount of assessed tax for the purpose of calculation of interest under sections 234A and 234B from the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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