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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 ..... ed in favour of assessee. - TAX APPEAL NO. 1970 of 2006 With TAX APPEAL NO. 1971 of 2006 - - - Dated:- 3-8-2015 - MR. A.J.DESAI AND MR. A.G.URAIZEE, JJ. FOR THE APPELLANT : MR MR BHATT, SR. ADVOCATE for MRS MAUNA M BHATT, DVOCATE FOR THE OPPONENT : MR. B.S.SOPARKAR, ADVOCATE for MRS SWATI SOPARKAR, ADVOCATE JUDGMENT (PER : HONOURABLE MR.JUSTICE A.J.DESAI) 1. These two appeals filed by the Commissioner of Income Tax, Ahmedabad under Section 260A of the Income Tax Act, 1961 (herein after referred to as the Act for short) came to be admitted by this Court and the following common question of law was framed as substantial question of law. Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) directing the A.O. To recalculate the interest payment under Section 201(1A) from the date of deduction of TDS to the date of assessment of payee or after the date of actual payment of TDS, whichever is earlier ? 2. The issue involved in the present case is with regard to interest payable by the respondent assessee company under the provisions of 201(1A) of the Act for the assessment year 1997-989 and 1998-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two appeals came to be dismissed by the Tribunal. Hence, present appeals. 4. Mr.M.R.Bhatt, learned Senior Advocate assisted by Ms. Mauna Bhatt, learned advocate has vehemently submitted that the Tribunal has grossly erred in interpreting the mandatory provisions of Section 201(1A) of the Act. He would further submit that the respondent company was duty bound to credit since the same was deduced at the time of payment to those two companies (herein after referred to as the payee companies for short). He would further submit that it is an undisputed fact that though the assessee company had paid the amount after deducting the TDS, the said tax was not credited with the revenue within prescribed period. 5. Since the respondent assessee company had deposited the said TDS at belated stage, the provisions of Section 201(1A) of the Act would be applicable. He would further submit that the defaulting assessee company is bound to pay the interest at the rate prescribed under Section 201(1A)(2) of the Act from the date of which such tax was deducted and on the date on which such tax was actually paid. The CIT (Appeals) as well as Tribunal have erred in holding that since assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety Ltd. reported in (2001) 119 Taxman 239 (Gujarat), he would submit that there is no loss, whatsoever in nature, caused to revenue on account of delay payment of TDS and therefore, would not be entitled to charge any interest subsequent to assessment of payee companies. He would further submit that in the said decision, the payee company had already paid taxes, which the said company is liable to pay and therefore, it was held that the asessee company cannot be charged with any interest under Section 201(1A) of the Act. Here is the case where the payee company is not at all taxed with any liability and therefore, the assessee company would not be liable to pay interest subsequent to the assessment made qua the payee company. 11. By relying upon the decision in case of Hindustan Coca Cola Beverage P. Ltd. V. Commissioner of Income Tax reported in [(2007) 293 ITR 226 (SC)], he would submit that it has been held by the Apex Court that there cannot be double taxation if the department has already received tax from the payee company since the payee company had to pay the tax. He would further submit that in the present case, the Assessing Officer has held that the payee company w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to deduct and pay the tax. [(1A) Without prejudice to the provisions of subsection (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct 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 at [fifteen] per cent per annum on the amount of such tax from the date on which tax was deductible to the date on which such tax is actually paid.] (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, referred to in subsection( 1). 14. It is true that plain reading of Section 201(1A) of the Act would prima facie read that the defaulter has to pay the interest from the date of deducting the TDS till the said amount of tax is actually paid by the concerned person. 15. However, as stated herein above, both the payee companies have been held that they were not liable to pay any tax and therefore, whether the revenue can ask the interest on such de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d paid under Section 194C, had paid more amount of tax by way of advance tax and than what was payble and had also paid tax on self-assessment. Thus, it is not at all in dispute that for the relevant two years that amount of tax was paid by Ravi Builder, on its income as per the provisions of the Act , and for other two yers, was was paid by Ravi Builder little late. So far as the late payment is concerned, the AAC held that the assessee had to pay interest under Section 201(1A) for the said years and the assessee accepted the said finding. Thus, it can very well be seen that the facts of the case which have been relied upon by Mr. Qureshi cannot help the revenue for the reason that in the said case it was not known whethere the person on whose behalf the tax was to be paid to the revenue had in fact paid the tax payable by him. In the instant case, the contractor, viz., Ravi Builder, had admittely paid the amount of tax payable by it and, thus, no loss of whatsoever nature had been caused to the revenue on account of non-deduction of tax at source by the assessee. 12. From the legal provisions discussed herein above, it is crystal clear that in the instant case Ravi Builder, on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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