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TMI Blog2017 (12) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a period exceeds one month, then the question of levy of interest will arise. However, what has been done in the present case is that the interest has been charged for two calendar months, i.e. September and October. This plea of the assessee indeed meets our approval in the sense that the question of levy of interest for the second month can arise only if the period of time between the date on which tax was deducted and the date on which tax was paid to the Government exceeds one month. We, therefore, direct the Assessing Officer to recompute the levy of interest under section 201(1A) accordingly. - ITA No. 1503/Ahd/2015 - - - Dated:- 30-11-2017 - Pramod Kumar AM And S S Godara JM For The Appellant : SN Divatia For The Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest for two months. Section 201(1A) clearly states, if a person after deducting tax fails to pay the tax it shall be liable to pay simple interest at one and one-half percent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. The issue in dispute is whether the day on which tax was deducted is to be excluded or not. The Hon'ble Apex Court in Criminal Appeal No.1079 of 2006 in case of M/s Econ Antri ltd. Vs. Ron Industries Ltd. Anr, in order dated 26-03-2013 has held that for the purpose of calculating period of one month, the period has to be reckoned by excluding the date on which the cause of action arose. The contention of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest for the second month can arise only if the period of time between the date on which tax was deducted and the date on which tax was paid to the Government exceeds one month. We, therefore, direct the Assessing Officer to recompute the levy of interest under section 201(1A) accordingly. 6. As per learned counsel s plea that it is too strong a punishment to levy interest for a delay of first one day, such a plea is only to be noted and rejected. Who would know the time value of money better than a banker that the assessee is, and the interest is nothing more than a compensatory levy for the time during which tax deductor enjoyed the Government money. That is not at all penal in nature and we do not have any authority to relax t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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