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2015 (6) TMI 323 - ITAT BANGALORENon deduction of TDS - Assessee in default u/s.201(1) and also levying interest on tax not paid u/s.201(1A) - Consequences of failure to deduct or pay - Held that:- The assessee company has deducted tax at source on these amounts in the subsequent year as and when the same were paid by it.In view of the above, the demand on account of tax u/s.201(1) of the Act, in our view, will no longer survive. The argument that TDS provisions operate on income and not on payment, in the facts and circumstances of the present case, is erroneous. As we have already seen Sec.194C, 194J and 195, which are the sections applicable in the present case, does not use the expression, "Income". The above sections use the expression "Sum" and tax deduction has to be on the "sum so paid". Sec.194H and Sec.194-I deal with TDS obligation on payment of commission and rental income. These payments by its nature are specific and the entire payment is attributable to commission or rent and therefore the commission and rent paid is treated as "income" and therefore the expression income by way of commission or rent is found in these sections. Moreover as person responsible for making payment, it is the duty of the Assessee to deduct tax at source. Sec.194C, 194-J, 194-H and 194-I do not use the expression "Chargeable to tax". As we have already seen, it is not the case of the Assessee that the payments are not chargeable to tax in the hands of the payee. As we have already seen, the Assessee deducted tax on the provision made for various expenses in the subsequent financial years when the provision entries were reversed. The Assessee therefore cannot take a plea that the payments in question are not chargeable to tax and therefore there was no obligation on its part to deduct tax at source. As already held that the said CBDT circular No.30/2010 is applicable to banks and cannot be taken advantage by the Assessee who is not a bank. As we have already seen, the Assessee is fully aware of the payee but postpones credit to the account of the payee for want of receipt of invoice. We do not find any merit in the appeals that relate to challenge of levy of interest u/s.201(1A) of the Act. - Decided partly in favour of assessee.
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