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2014 (6) TMI 672 - AT - Income TaxDemand u/s 201(1) and 201(1A) against short deduction of TDS or non-deduction of TDS u/s 194A - TDS on interest on certain deposits placed by the customers with the assessee (Bank) - Held that:- the taxes cannot be recovered once again from the assessee in a situation in which the recipient of income has paid due taxes on income embedded in the payments from which tax withholding requirements were not fully or partly, complied with. - Decision in the case of Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] followed. Onus is on the revenue to demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liability is not discharged that vicarious recovery liability can be invoked. Once all the details of the persons to whom payments have been made are on record, it is for the Assessing Officer, who has all the powers to requisition the information from such payers and from the income tax authorities, to ascertain whether or not taxes have been paid by the persons in receipt of the amounts from which taxes have not been withheld. 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. In a case in which the recipient of income had no tax liability embedded in such payments, there will obviously be no question of delay in realization of taxes and the provisions of section 201(1A) will not come into play at all. The computation of interest is to be redone in the light of this legal position. Matter remanded back to AO for fresh adjudication in accordance with the law - Decided in favor of assessee.
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