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TMI Blog2015 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar controversy had arisen in the case of CIT v. Arvind Mills Ltd. [2011 (9) TMI 244 - GUJARAT HIGH COURT ] wherein the assessee claimed interest under section 244A on the basis of British calendar month.. The Tribunal allowed the same. When the matter was carried before the hon'ble Gujarat High Court in an appeal filed by the Revenue, their Lordships held that a reading of sub-section (1) of section 244A, the relevant provisions of which are analogous to the provisions of clause (ii) of section 201(1A) read with rule 119A, would make it clear that the term "month" must be given the ordinary meaning of the term of 30 days period and not the British calendar month as defined in section 3(35) of the General Clauses Act. It was held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. As found during the course of survey, the assessee-company had purportedly deducted tax under sections 194C and 194J and also remitted the same to the Government account. There was, however, delay in the said remittance, for which, according to the Assessing Officer, interest of ₹ 32,28,121 was payable by the assessee under section 201(1A). Since interest under section 201(1A) only to the extent of ₹ 17,84,625 was paid by the assessee, the Assessing Officer passed the order dated November 23, 2013, treating the assessee as liable for payment of balance interest under section 201(1A) amounting to ₹ 14,43,496. 3. Against the order passed by the Assessing Officer under section 201(1)/ 201(1A), an appeal was preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned Commissioner of Income-tax (Appeals) did not find merit in the contentions raised by the assessee and relying on rule 119A(b) of the Income-tax Rules, 1962, she confirmed the levy of interest under section 201(1A) as computed by the Assessing Officer for the following reasons given in paragraphs 3.5 to 3.7 of her impugned order. 3.5 As per rule 119A(b) the interest is to be calculated for every month and any fraction of the month shall be deemed to be full month. It is also pertinent to mention that under section 244A, the Income-tax Department pays interest to the assessee, the interest is to be calculated on refund as per rule 119A, therefore, even though the rate of interest collected by the Department an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. The issue involved in this appeal relates to the computation of interest payable by the assessee under section 201(1A), the provisions of which read as under : 201(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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated ; (c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated. 6. In the present case, clause (ii) of section 201(1A) read with clause (b) of rule 119A is applicable and it provides that where the interest is to be calculated for every month or part of a month comprised in a period, any fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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