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2014 (1) TMI 706 - ITAT LUCKNOWShort deduction of TDS Payment of interest to a society - Liability on late deposit f TDS u/s 194A of the Act r.w. Rule 30(1)(b)(i)(1) of the Rules Held that:- The lapse on account of non-deduction of tax at source is to be visited with three different consequences penal provisions, interest provisions and recovery provisions - The penal provisions in respect of such a lapse are set out in Section 271 C - So far as penal provisions are concerned, the penalty is for lapse on the part of the assessee and it has nothing to do with whether or not the taxes were ultimately recovered through other means - The provisions regarding interest in delay in depositing the taxes are set out in Section 201(1A) - These provisions provide that for any delay in recovery of such taxes is to be compensated by the levy of interest. As far as recovery provisions are concerned, these provisions are set out in Section 201(1) which seeks to make good any loss to revenue on account of lapse by the assessee tax deductor - the question of making good the loss of revenue arises only when there is indeed a loss of revenue and the loss of revenue can be there only when recipient of income has not paid tax - recovery provisions under section 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes. In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact - once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. Levy of Interest u/s 201(1A) of the Act Held that:- The interest is a compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes - Following Bennett Coleman & Co Ltd Vs ITO [1984 (11) TMI 58 - BOMBAY High Court] - levy of interest under section 201(1A) is applicable whether or not the assessee was at fault - it is only compensatory in nature it is applicable for the period of the date on which tax was required to be deducted till the date when tax was eventually paid the matter remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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