9911796707
TMI Blog2002 (3) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... 01(1A) of the IT Act, 1961, and after giving an opportunity of being heard to the assessee, levied interest as per the following details: Asst. yr. Amount (Rs.) 1977-78 1,200 1980-81 3,214 1981-82 5,477 1982-83 194 1983-84 817 1984-85 1,588 The assessee appealed to the Dy. CIT(A) and pleaded that since the payments of interest were to the sister-concerns and since it was in the knowledge of the assessee that the said sister-concerns were paying advance tax on such interest income, the assessee did not find it necessary to deduct tax at source at the time of payment of interest. It was further pleaded that in terms of the ratio laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative charging of interest under s. 201(1A) of the Act is mandatory in nature and notwithstanding the fact that the assessee had made payments of interest to sister-concerns who had paid advance tax on such interest, the AO was duty bound to charge interest under s. 201(1A). In support of his contention, he ralied upon the judgment of Kerala High Court in the case of CIT vs. Dhanalakshmy Wvg. Works (2000) 160 CTR (Ker) 374 : (2000) 245 ITR 13 (Ker) and the judgment of the Calcutta High Court in the case of Grindlays Bank Ltd. vs. CIT (1992) 101 CTR (Cal) 164 : (1993) 200 ITR 441 (Cal). He further submitted that the decision of Jaipur Bench of the Tribunal in the case of Rathi Gum Industries has been reversed by the Hon'ble Rajasth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court in CIT vs. Dhanalakshmy Wvg. Mills has held as follows: "The levy of interest is a compensatory measure for withholding tax which ought to have gone to the exchequer. Sec. 201(1A) of the IT Act makes it clear that the levy of interest is mandatory. It is true the use of the expression "shall" is not always determinative of the fact whether a provision is directory or mandatory in nature, but the context in which expression "shall" is used in s. 201(1A) makes it clear that the levy is mandatory. The purpose of the levy is to claim that the levy is mandatory. The purpose of the levy is to claim compensation on the amount which ought to have been deducted and deposited and has not been done." An exactly similar view has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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