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TMI Blog2014 (3) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liability is not discharged that vicarious recovery liability can be invoked - Once all the details of the persons to whom payments have been made are on record, it is for the Assessing Officer, who has all the powers to requisition the information from such payers and from the income tax authorities, to ascertain whether or not taxes have been paid by the persons in receipt of the amounts from which taxes have not been withheld - The lapse on account of non-deduction of tax at source is to be visited with three different consequences – penal provisions, interest provisions and recovery provisions - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of demands raised under section 201/201(1A) read with section 194H of the Income Tax Act, 1961, for the Assessment Years 2009-10 2010-11. 2. The appeals are time barred by 51 days but the assessee has moved a petition seeking condonation of delay. Having perused the petition and having heard learned Departmental Representative on the same, we deem it fit and proper to condone the delay and proceed to take up the appeals on merits. Accordingly, we admit the appeals for consideration on merits. 3. To adjudicate on these appeals, only few material facts need to be taken note of. The A.O. (TDS) has raised the demands on the assessee, a Government Undertaking, on account of assessee s not having deducted tax at source in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the payments from which tax withholding requirements were not fully or partly, complied with. Hon ble jurisdictional High Court, in the case of Jagran Prakashan Ltd Vs DCIT [(2012) 21 taxmann.com 489 All] also has, inter alia, observed as follows: ..it is clear that deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly. In the present case, the Income tax authorities had not adverted to the Explanation to Section 191 nor had applied their mind as to whether the assessee has also failed to pay such tax directly. Thus, to declare a deductor, who failed to deduct the tax at source as an assessee in default, condition precedent is that assessee has also failed to pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the condition is satisfied. No doubt the assessee has to submit all such information about the recipient as he is obliged to maintain under the law, once this information is submitted is for the Assessing Officer to ascertain whether or not the taxes have been paid by the recipient of income. This approach, in our humble understanding, is in consonance with the law la id down by Hon ble Allahabad High Court. 8. It is important to bear in mind that the lapse on account of nondeduction of tax at source is to be visited with three different consequences penal provisions, interest provisions and recovery provisions. The penal provisions in respect of such a lapse are set out in Section 271 C. So far as penal provisions are concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I t is not the revenue s case before us that, on the facts of this case, such an exercise by the Assessing Officer is not possible. It does put an additional burden on the Assessing Officer before he can invoke Section 201(1) but that show Hon ble High Court has visualized the scheme of Act and that s how, therefore, it meets the en d o f justice. 9. As far as levy of interest under sect ion 201(1A) is concerned, this interest is admittedly a compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes. Hon ble Bombay High Court, in the case of Bennett Coleman Co Ltd Vs ITO (157 ITR 812) has held so. Therefore, levy of interest under section 201(1A) is applicable whether or not the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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