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TMI Blog2015 (8) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent assessee company under the provisions of 201(1A) of the Act for the assessment year 1997-989 and 1998-99. 3. The brief facts arise from the record are as under: 3.1. That survey was conducted on respondent assessee company under the provisions of Section 133(A) of the Act on 06.03.2000, wherein the statement of the director of the company under Section 133 of the Act was recorded. The director had admitted that the company had committed a default in respect of its liability with regard to payment tax deducted at source (herein after referred to as 'TDS' for short), which tax was already deducted from the account of two other parties and was not credited to the Government within a prescribed period. It was noticed that the assessee company had paid interest to other companies amounting to Rs. 2,99,98,853/- and also paid the interest other than company amounting to Rs. 23,66,890/-. It was also noticed that those two parties namely Labh Estate Organizers Pvt. Ltd and M/s. Labh Organizer Pvt. Ltd., though tax was deducted at source to the tune of Rs. 4,46,120/- and Rs. 5,23,770/- respectively, the same was not deposited with the Government. 3.2. The Assessing Officer tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals) as well as Tribunal have erred in holding that since assessment of the payee companies was made before delayed payment when the payee companies were not liable to pay any tax under the Act, the assessee company would be liable to pay interest till that date. 6. He would further submit that plain reading of Section 201(1A) of the Act makes it clear that the defaulting assessee company in depositing the tax at belated stage is bound to pay the tax till the tax is actually paid by him and not till the date of the assessment made with regard to the payee companies. 7. By relying upon the decision in case of Commissioner of Income Tax V. Anjum M.H.Ghaswalla & Ors. reported in (2001) 252 ITR 1, he would submit that the Tribunal has erred in expanding the definition or the provisions of Section 201(1A) of the Act. 8. He, therefore, would submit that the appeals be allowed and the orders of the CIT (Appeals) as well as the Tribunal be quashed and set aside. 9. On the other hand, Mr.B.S.Soparkar, learned advocate appearing for the respondent vehemenly opposed this appeal. He would submit that the respondent asseesee company has already paid the TDS, however, at later stage. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the Assessing Officer has held that the payee company was not liable to pay any tax and therefore, the CIT (Appeals) and the Tribunal have not committed any error in holding that the interest under Section 201(1A) of the Act would be payable by the assessee company till the assessment of the payee companies were made. He, therefore, would submit that present appeals be dismissed. 12. We have heard learned advocates for the respective parties. Perused the orders of the CIT (Appeals) as well as the Tribunal along with some details of delayed payment of TDS produced for perusal of this Court. It is an undisputed fact that those two companies namely Labh Estate Organizers Pvt. Ltd and M/s. Labh Organizer Pvt. Ltd. were assessed for two years i.e. 1997-98 and 1998-99 and the Assessing Officer has held that the said companies were not liable to pay any tax under the provisions of the Act. It was accepted by the officers that both the companies were running in losses and considering their income and expenditure, it was held that they are not liable to pay any tax. 13. As far as respondent assessee company is concerned, it is an admitted position that the assessee company has made p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue can ask the interest on such delayed payment of TDS even though, subsequent to the date of the declaration that the payee companies had not to pay any tax for those financial years. In our opinion, when the assessee company had to pay the tax on behalf of the payee companies and when the payee companies themselves had not to pay any tax, subsequent to such declaration with regard to payee companies, no interest can be leviable against the company since there would be no loss of revenue in whatsoever manner. The case of Commissioner of Income Tax V. Rishikesh Apartments Co-op. Housing Society Ltd. (supra) is comparable with the case of the present case on hand since theres is no loss of revenue on account of non-payment of TDS within prescribed period. Even if TDS, which was subsequently deposited with the department on behalf of payee company must have been refunded in view of losses suffered by them and on declaration that they were not liable to pay any tax. In the above referred case, the payee companies might have paid the taxes as it was liable to pay the same. It was held that no interest can be refunded under Section 201(1A) of the Act on the delayed payment or on non-d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstant case Ravi Builder, on whose behalf the tax was to be paid by the assessee, had duly paid its tax and was not required to be pay any tax to the revenue in respect of the income earned by it from the assessee. If the tax was duly paid and that too at the time when it had become due, it would not be proper on the part of the revenue to revy any interest under Section 201(1A) of the Act especially when Ravi Builder had paid more amount of tax by way of advance tax than what was payable by it. As the amount of tax payable by the Contractor had already been paid by it and that too, in excess of the amount which was payable by way of advance tax, in our opinion, the Tribunal was absolutely right in holding that the tax paid by the Contractor in its own case, by way of advance tax and selfassessment tax, should be deducted from the gross tax that the assessee should have deducted under Section 194C while computing interest chargeable under Section 201(1A) of the Act. If the revenue is permitted to levy interest under the provisions of section 201(1A) of the Act, even in the case where the person is liable to pay the tax has paid the tax on the date due for the payment of the tax, th ..... 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