TMI Blog2014 (8) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... s – Relying upon Sriram Refregeration Industries v. ITO [2014 (4) TMI 277 - ANDHRA PRADESH HIGH COURT] - section 201(1A) of the Act has no application in the case of short deduction - when we say "even assuming" it does not mean that at the relevant point of time there was any obligation on the Municipal Corporation to deduct surcharge as the very obligation to collect surcharge was not in existence and the same came to be introduced only with effect from April 1, 1991, by the Finance (No. 2) Act, 1991 – the order of the Tribunal is upheld – Decided against revenue. - - - - - Dated:- 4-3-2014 - CHANDRAIAH G. AND CHALLA KODANDA RAM, JJ. JUDGEMENT Challa Kodanda Ram J.- At the instance of the Revenue, the below mentioned ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92, under section 194C read with section 201(1) of Income-tax Act, 1961 (for short, the Act ), directing the respondent-Municipal Corporation to make good the short deduction of ₹ 2.08 lakhs representing the non-deducted surcharge. Obviously, the Income-tax Officer passed the said order treating the Municipal Corporation as an assessee in default under section 201 of the Act. Further, an amount of ₹ 13,028 was levied towards interest on the short deduction of ₹ 2.08 lakhs under section 201(1A) of the Act and, accordingly, raised a demand. The respondent-assessee preferred an appeal and the first appellate authority on analysis of section 194C of the Act as existing at that point of time had come to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporation established by or under a Central, State or Provincial Act ; or (d) any company ; or (e) any co-operative society, shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to two per cent. of such sum as income-tax on income comprised therein. (2) Any person (being a contractor and not being an individual or a Hindu undivided family) responsible for paying any sum to any resident (hereafter in this section referred to as the sub-contractor) in pursuance of a contract with the sub-contractor for carrying out, or for the supply of labour for carrying out, the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and considering the provisions as existing at that point of time, by following the judgment in the case of P. V. Rajagopal v. Union of India [1998] 233 ITR 678 (AP) held that section 201(1A) of the Act has no application in the case of short deduction. The ratio of the said judgment would squarely apply to the present case on hand even assuming that there is short deduction. We make it clear that when we say even assuming it does not mean that at the relevant point of time there was any obligation on the Municipal Corporation to deduct surcharge as the very obligation to collect surcharge was not in existence and the same came to be introduced only with effect from April 1, 1991, by the Finance (No. 2) Act, 1991. In the circumstances, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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