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TMI Blog2015 (3) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... had included interest income earned from assessee-bank in their total income and paid tax thereon, assessee could not be considered as in default in terms of section 201(1) - Held that:- It is further relevant to note that Explanation to sec. 191 now makes it unequivocal that where the person who is required to deduct any sum in accordance with the provisions of this Act does not deduct or after so deducting fails to pay, or does not pay the whole or any part of the tax as required by or under this Act, he may be deemed to be an assessee in default within the meaning of Sec. 201(1) in respect of such tax, if the deductee has also failed to such tax directly. Thus it is obvious that the person responsible for deduction of tax at source on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee against the order u/s 201(1) and 201(1A) of the Income Tax Act, 1961 (the Act) in relation to the assessment year 2009-10. 2. Briefly stated the facts of the case are that the assessee bank filed its e-TDS statement. On the perusal of the same it was observed that there was non-payment of TDS, non/low deduction of tax at source and late payment of tax deducted at source in certain cases. On the basis of a chart consisting of 39 entries, which is annexure to the order passed by the ACIT(TDS), it was concluded that there was total short deduction of tax at source on interest amounting to ₹ 5,71,910/-. The assessee was held to be in default in respect of this amount u/s 201(1) and also interest u/s 201(1A) amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that where the payee has already paid tax on income of which there was a short deduction of tax at source, recovery of tax cannot be made once again from the tax deductor. The ld. AR contended that 39 instances in respect of which the assessee short deducted tax at source, the payees had already included such interest in their respective total incomes and paid tax thereon. It appears that impressed with this submission, the ld. CIT(A) directed the assessee to co-ordinate with the TDS officer for necessary verification in this regard. However, the fact of the matter is that the ld. CIT(A) has no power to remand the proceedings before the A.O. In view of the foregoing precedent from the Hon'ble Supreme Court, it is clear that if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their total income and paid tax thereon. 5. In so far as the question of interest u/s 201(1A) is concerned, the same is chargeable for the period between the date on which tax was deductible till the date on which the tax was actually paid by the payee notwithstanding the fact that the payee ceases to be an assessee in default for the purpose of Sec. 201(1). The Hon'ble Supreme Court in CIT Vs Eli Lilly and Company (India) (P) Ltd. and Others 2009 312 ITR 225 (SC) has laid down to this extent. The matter of charging interest, wherever chargeable, is also remitted to the Assessing Officer for fresh determination in line with his verification of the liability of the assessee u/s 201(1). 6. In the result, the appeal is allowed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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