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TMI Blog2017 (12) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 201(1A). The assessee also failed to produce any order from the Competent Authority that assessee need not to make any TDS as the payee has paid the advance tax including the impugned transactions in the return of income. It is well settled law that charging of interest is mandatory under section 201(1A) of the I.T. Act. The provision for payment of interest are mandatory and automatic and interest has to be paid from the date on which the tax was chargeable till the date on which tax is actually paid. Even if recipient has paid the tax, for the short fall, the interest shall have to be paid by the assessee. Thus interest in question is chargeable. The assessee has failed to produce any details before the authorities below as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-in-default under section 201(1) of the I.T. Act. The assessee on this argument tried to establish that since advance tax has been paid by the payee, no interest is leviable under section 201(1A) of the I.T. Act. The A.O. rejected the contention of the assessee. The A.O. noted that as the assessee failed to deduct TDS but surrender the expenditure on account of interest paid to these concerns in its taxable income, interest liability under section 201(1A) is calculated as per the details mentioned in page-4 of the assessment order up to the date of filing of the return filed by the said two companies. The A.O. accordingly, calculated the interest liability payable by assessee under section 201(1A) amounting to ₹ 28,92,314. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and the appellant cannot take a plea not to make TDS which is mandatory. The appellant failed to produce any letter from the competent authority that the appellant need not make any TDS as the payee has paid advance tax including the particular transaction in the return of income. As mentioned by AO, the judicial pronouncements cited by the appellant do not take away the mandatory nature of TDS provision and consequential levy of interest on failure to do so. In view of this, the AO has rightly computed the interest leviable for the delay period which requires no interference. Hence, the ground of appeal is dismissed. 4. The Learned Counsel for the Assessee submitted that assessee need not to make any TDS as the payee has paid th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient on such income the Income Tax Department may not be justified to recover the said amount of tax, but so far as the liability of interest is concerned, that cannot be considered to be non7 existent on account of deposit of tax by the recipient at a subsequent or later stage. 5.2. In the case of CIT vs. Dhanalakshmy Weaving Works (2000) 245 ITR 13 (HC) (Kerala), the Hon ble Kerala High Court held as under : Held : that the levy of interest is a compensatory measure for withholding tax which ought to have gone to the exchequer, Section 201(A) of the Income Tax Act, 1961, makes it clear that the levy of interest is mandatory. It is true that use of the expression shall is not always determinative of the fact whether a provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.4. The Ld. D.R. submitted that since assessee failed to produce any material before the authorities below as well as before the Tribunal with regard to payment of taxes by the recipient, therefore, matter cannot be remanded to the A.O. 6. We have considered the rival contentions and do not find any merit in the appeal of the assessee. The assessee contended before the authorities below that once tax is paid by both these companies which is recorded in their books of account, therefore, assessee cannot be held to be in default for payment of the tax. Therefore, no interest is chargeable. The assessee further admitted that assessee has not deducted the TDS on account of interest paid to these two companies. The A.O. has given details at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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