9911796707
TMI Blog1981 (2) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee failed to deduct and deposit the tax from the salaries paid by it to its Directors and emplyees, in accordance with the provisions of s. 192 of the Act, r/w rr. 32,33 and 34 of the IT Rules, 1962. The orders passed by the ITO were under s. 201(1A) r/w s. 192(1) and s. 200 of the Act. The ITO calculated the period of defaults for the four years and demanded interest of Rs. 92, Rs. 3,266, Rs. 3,225 and Rs. 1,039 for the respective four years under consideration. The orders passed by the ITO merely state that he found the assessee to be in default and, so, he was imposing interests under s. 201(1A) of the Act. 3. The assessee appealed to the CIT(A) and contended that the imposition of interests was not justified. It was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the High Court. The case of the assessee was that the assessee was not able to deposit the tax deducted at source within the prescribed time limit due to difficult financial circumstances narrated above. Further, it was urged that in the last two years, no payment of salary was made to the Directors and only their accounts in the books of the company were credited with the account of the salary without any actual payment, so that there was no necessity to deduct the tax at source at the stage. The CIT(A) observed that in view of the financial difficulties and the order of the High Court, this was not a fit case to charge interests under s. 201(1A) for the four years under consideration. He, therefore, cancelled the interests for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals. About the merits of the case, he stated that the assessee was in difficulties right from the year 1968-69 and the creditors of the company took the matter to the Court only after waiting for a reasonable time with the hope that the assessee could get over its difficulties and repay their dues. He urged that the financial difficulties of the assessee did not begin in 1971 but right from the year 1968, as stated before the ITO. He stated that the assessee was not in a position to pay even the salaries of the staff on the due dates and the salaries paid during the years under consideration were, somehow, managed inspite of the great pressure from the secured and unsecured creditors. His point was that the assessee was prevented from ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as explained by him during the penal proceedings, by its letter dt. 28th July, 1979. There is force in the explanation of the assessee that the financial difficulties started at a stage earlier to the final action of the creditors in 1971 threatening legal action against the assessee. A copy of the order of the Hon'ble High Court, referred to by the CIT (A) in his order, has been placed before us. This order shows that the assessee was able to pay a part of its total dues to the creditors. This fact proves the financial difficulties of the assessee during the years under consideration. If an order is appealable, the appellate authority has to see whether the order appealed against was justified in the facts and circumstances of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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