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TMI Blog2011 (3) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23-4-2004 passed by the Income-tax Appellate Tribunal, "A" Bench, Kolkata, in ITA No. 369/Kol./2004 for the assessment year 1995-96 thereby dismissing the appeal filed by the assessee against the order passed by CIT (Appeals). 2. Being dissatisfied, the assessee has come up with the present appeal. 3. It appears from the record that a Division Bench of this Court at the time of admission of this appeal formulated the following questions of law : "(i) Whether the Tribunal was justified in law in holding that the interest under section 201(1A) was mandatory and automatic irrespective of the bona fide contentions/conduct of the appellant? (ii) Whether and in any event, interest under section 201(1A) can be charged for the period from May 6, 1997 when the order under section 201 read with section 194E was passed and notice of demand was issued on the basis of which interest under section 220(2) has also been charged with effect from May 6, 1997 on the same amount resulting in concurrent charging of interest under section 201(1A) and section 220(2) for the period from May 6, 1997 to February 8, 2000 on the same amount?" 4. The facts giving rise to the filing of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. By a letter dated 22-2-2000, the assessee duly objected to the proposal to impose interest on the ground that it was taking step to file an appeal against the said order dated 4-1-2000 before this High Court and without prejudice to its rights and contentions had already requested the bank to pay the said sum of Rs. 38,88,731. According to the assessee, since the question as to whether it was at all liable to deduct any tax would be the subject-matter of further proceedings, the question of computing any interest under section 201(1A) at that stage did not arise. (g) Apart from the aforesaid ground, according to the assessee, it was not liable to deduct any tax under section 194E and the provisions of section 201 had no manner of application. The Income-tax Officer was requested to drop the proposal for imposing penal interest under section 201(1A). (h) The Income-tax Officer, however, by an order dated 28-2-2000 held that the assessee was liable to pay interest under section 201(1A) which was computed by him at Rs. 26,86,697, such interest being computed on the sum of Rs. 38,88,731 from the date on which the Income-tax Officer considered that tax was deductible in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded for payment of interest right up to the date of payment of the amount falling within the purview of sub-section (1). In the said application, the assessee highlighted that the interest on the sum of Rs. 38,88,731 had been concurrently charged both under section 201(1A) and section 220(2) of the Act for the period from 6-5-1997 to 8-2-2000. (p) In view of the fact that this High Court had decided that an order charging interest under section 220(2) is not appealable under the Act and such decision had been followed by the Tribunal in the order dated 31-3-2004, the assessee felt that no purpose would be served by filing an appeal under section 260A against the said order of the Tribunal insofar as it related to interest charged under section 220(2). Accordingly, the assessee preferred appeal against the order dated 31-3-2004 by the Tribunal insofar as it related to interest charged under section 201(1A). 5. Mr. Bajoria, the learned senior Advocate appearing on behalf of the appellant, has contended before us that the procedure provided in the Act for recovery starting from section 156 of the Act, followed by the provision of section 220(1) and the consequential order under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand under section 156 shall be paid within thirty days of the service of the notice at the place and to the person mentioned in the notice : Provided that, where the Assessing Officer has any reason to believe that it will be detrimental to revenue if the full period of thirty days aforesaid is allowed, he may, with the previous approval of the Joint Commissioner, direct that the sum specified in the notice of demand shall be paid within such period being a period less than the period of thirty days aforesaid, as may be specified by him in the notice of demand. (2) If the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one per cent for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid : Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260 or section 262, or section 264 or an order of the Settlement Commission under sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not being in default in respect of the amount in dispute in the appeal, even though the time for payment has expired, as long as such appeal remains undisposed of. (7) Where an assessee has been assessed in respect of income arising outside India in a country the laws of which prohibit or restrict the remittance of money to India, the Assessing Officer shall not treat the assessee as in default in respect of that part of the tax which is due in respect of that amount of his income which, by reason of such prohibition or restriction, cannot be brought into India, and shall continue to treat the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed. Explanation. For the purposes of this section, income shall be deemed to have been brought into India if it has been utilised or could have been utilised for the purposes of any expenditure actually incurred by the assessee outside India or if the income, whether capitalised or not, has been brought into India in any form. 222. Certificate of Tax Recovery Officer. (1) When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax. (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200. (2) Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (1A) shall be a charge upon all the assets of the person, or the company, as the case may be, refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess the revenue decides to initiate proceedings for imposition of penalty in terms of the proviso to section 201(1) read with section 221. 11. Even in the provisions for issue of certificate under section 220 of the Act, there is clear indication that such certificate may be drawn up under two circumstances i.e., (1) when an assessee is in default, meaning thereby, that it is preceded by service of a notice under section 156 of the Act or (2) when he is deemed to be in default in making a payment of tax under the Act, a circumstance covered under section 201 of the Act. 12. Therefore, the combined effect of all those provisions of the Act is that if a case is one of "deemed default" under section 201, in that event, the service of notice under section 156 is not called for and to be ignored. 13. We, therefore, dispose of this appeal by clarifying the order of the Tribunal below that in a case where section 201(1) is attracted there is no need of giving any notice under section 156 of the Act and if any such notice is given the same should be held to be redundant. 14. The point No. 1 formulated by the Division Bench as indicated earlier is, however, answered in the affirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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