Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 412 - DELHI HIGH COURTRequirement to deduct TDS – Interest payable on FDRs - Whether the provisions of Chapter XVII of the Act would be applicable in respect of interest which is payable on the fixed deposits maintained by this Court with the petitioner bank, in the name of the Registrar General – Held that:- Although the collection of tax by deduction at source may precede the assessment, it is clear that it does not affect the basis of the levy of tax - The provisions for collection of tax, under Part B of Chapter XVII of the Act, by way of tax deduction at source are provisions for recovering tax payable by assessees and do not in any manner affect the levy or the charge of tax - in absence of an assessee, the machinery of provisions for deduction of tax to his credit are ineffective - The expression “payee” under Section 194A of the Act would mean the recipient of the income whose account is maintained by the person paying interest. Although the FD is made in the name of the Registrar General, the account represents funds and the Registrar General is neither the recipient of the amount credited to that account nor the interest accruing - the Registrar General cannot be considered as a “payee” for the purposes of Section 194A of the Act - The credit by the petitioner bank in the name of the Registrar General would, thus, not attract the provisions of Section 194A of the Act - Section 190(1) of the Act clarifies that deduction of tax can be made prior to the assessment year of regular assessment, nonetheless the same would not imply that deduction of tax is mandatory even where it is known that the payee is not the assessee and there is no other assessee. Deducting tax in the name of the litigant who deposits the funds with this Court would also create another anomaly because the amount deducted would necessarily lie to his credit with the income tax authorities - the tax deducted at source would reflect as a tax paid by that litigant/depositor – He would be entitled to claim credit in his return of income – thus, the notice is to be set aside – Decided in favour of assessee.
|