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2017 (2) TMI 509 - AT - Income TaxDeduction of tax at a lower rate - levy of interest u/s 201(1A) - submission of the Assessee that the certificate issued by the AO u/s 197(1) clearly specifies that the assessee was authorised to pay any sum by way of interest other than interest on securities as referred to in section 194A after deducting the tax at source @ 1% plus surcharge and education cess thereon - Held that:- Provision of section 197(2) of the Act does not make any reference to any income specified in such certificate. A perusal of Rule 28AA(2) of the Rules also shows that the certificate issued u/s 197 of the Act will be valid for the assessment year specified in the certificate. Even in the rules there is no reference to the payment without TDS or at lesser rate should be on the sums specified as payable in the certificate. It is therefore clear in the statutory provision of deduction of tax at source at lower rate is “person specific” and cannot be extended to the amounts specified by the recipient of the payment while making an application for grant of certificate u/s 197 of the Act in Form No.13. AO has annexed the details in Schedule-II of Form No.13 to the certificate issued u/s.197 of the Act. By doing so, the AO cannot treat the assessee as a person who has not deducted tax at source to the extent of the payments made by the assessee over and above the sum specified in the certificate u/s 197 of the Act. We therefore agree with the arguments of assessee that certificate u/s 197 of the Act is with reference to the person to whom the income is paid and is not with reference to any sum as may be specified in the certificate. Assessee cannot be treated as a person who has not deducted tax at source on the difference between the amounts specified in the certificate issued u/s 197 of the Act and the amounts actually paid by the assessee. Consequently the levy of interest u/s 201(1A) of the Act cannot be sustained and the same is directed to be deleted. - Decided in favour of assessee
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