9911796707
TMI Blog1990 (11) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961, pertaining to the returns filed for 1977-78, 1978-79, 1979-80 and 1980-81, by deliberately showing the payment of interest to different payees in the interest payable account instead of crediting it to the respective payee's accounts for avoiding the lapse of non deduction of tax on the interest payable. A brief resume of facts relevant for the disposal of the petition is that the concerned Income-tax Officer, Yamunanagar, filed a complaint against the petitioner which is a private limited company, besides Shri S. L. Dosaj, former managing director, K. R. Malhotra, former general manager, R. P. Sikka, S. K. Mahajan, directors, and K. L. Sehgal, former secretary of the company, alleging that, for the relevant assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a penal offence by filling up the lacuna in the existing provisions of section 194A of the Incometax Act and that its operation would be prospective and not retrospective as the provisions of law at the time of commission of the offence had to be seen in order to ascertain whether the petitioners had committed any offence. He also relied upon the explanatory notes on the provisions relating to direct taxes while introducing the Finance Act, 1987 (see [1987] 168 ITR (St) 87). Mr. Sibal also relied upon the decisions of the apex court in CIT v. T. V. Sundaram Iyengar and Sons P. Ltd. [1975] 101 ITR 764 AIR 1976 SC 255 and Goodyear India Ltd. v. State of Haryana [1991] 188 ITR 402 ; AIR 1990 SC 781, in support of the proposition that the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that conditions laid therein are satisfied and lead only to the one and only reasonable interpretation that the assessee is liable to pay additional super tax. The above-referred view was again reiterated by the apex court in Goodyear India Ltd.'s case [1991] 188 ITR 402 while interpreting the provisions of section 9(1)(b) of the Haryana General Sales Tax Act, 1973. In para No. 21 of the judgment, it was observed that the apex court had said, and said on numerous occasions, that fiscal laws must be strictly construed, words must say what they mean. It was further held that nothing should be presumed or implied and the true test for interpreting fiscal legislation was always the language used therein by the Legislature. In the case in han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be deemed to be payment to the different depositors and the company would be liable for non-deduction of 10 per cent. tax on this amount. This question has to be answered in the negative in view of the provisions of section 194A(1) of the Income-tax Act, 1961, which reads as under : "Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force : Provided that no such d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Note relating to modification of the provisions relating to tax deduction at source reads as under : "38.1 With a view to rationalise the provisions of sections 194, 194A and 194D, the limits up to which no tax is to be deducted have been raised as under: ------------------------------------------------------------------------------------------------------------------------------------------------- Sl. Present limit up Amended No. Type of payment to which no tax limit is deductible ------------------------------------------------------------------------------------------------------------------------------------------------- (Rs.) (Rs.) 1. Dividend (section 194) 1,000 2,500 2. Interest other than interest on securities (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity relating to such deduction of tax at source. Thus, the explanatory note itself reveals that there was a lacuna or loophole in the unamended provisions of section 194A which enabled the concerned person to postpone the liability relating to such deduction of tax at source and thus dwindling the tax collection. For the reasons stated above, there is absolutely no doubt that the Explanation to sub-section (1) of section 194A has created a fresh penal liability and it cannot be said to be a simple Explanation of the existing provisions of this section. If that is so, then this Explanation cannot have retrospective operation. Consequently, it cannot be said that the petitioners had violated the provisions of section 194A by showing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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