TMI Blog2014 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ho receives the amount happens to be non-resident, subject to certain qualifications, the individual who pays the amount stands relieved from the obligation to effect deduction of the tax on the amount so paid - if the amount paid is not taxable under the Act, the obligation ceases – assessee is not able to demonstrate that the person or agency whom it paid the amount is the one that is described in the first part of sub-section (1) of Section 195 of the Act and thereby it is not under obligation to pay tax at all - assessee was not able to establish that the amount paid by it is not taxable – Decided against assessee. - ITTA 215 of 2003 - - - Dated:- 17-9-2014 - L. Narasimha Reddy And Challa Kodanda Ram,JJ. For the Appellant: Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Commissioner of Income Tax (Appeals). That was dismissed on 14-11-1995. Thereupon, it approached the Tribunal with a further appeal. The Tribunal rejected the appeal through order dated 30-08-2002. Sri Y. Ratnakar, learned counsel for the appellant submits that the provision that gets attracted to the facts of this case is Section 195 and not Section 201 of the Act. He submits that even under Section 195, the occasion to effect deduction of tax would arise if only the amount was chargeable to tax under the provisions of the Act and in the instant case, whether one goes by the nature of person who received the amount or the nature of transaction, the amount was not chargeable. He further submits that even otherwise, the contract was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the amount. The failure to deduct tax at source which was otherwise to be done, invites several consequences, including levy of interest under Section 201 of the Act. Such assessee is liable to be treated as the one, in default, under Section 221 of the Act. Section 195 of the Act deals with a set of circumstances, pertaining to deduction of tax at source where, not only the person who receives the amount, but also the nature of the amount that is paid become relevant. In other words, the verification can be person specific and/or the amount specific. If the person who receives the amount happens to be non-resident, subject to certain qualifications, the individual who pays the amount stands relieved from the obligation to effect deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned the same in his returns, in which case it was possible for the assessing authority to address the issue even from the point of view of Sections 195 and 201 of the Act. That not having been done and the plea not having been taken in its correct perspective in the proceedings initiated under Section 201, it is difficult to accept the contention as to the severality of the two components referred to above. The inescapable conclusion is that, (a) the recipient of the amount did not qualify under Section 195(1), (b) the amount paid by the appellant was taxable and (c) the appellant was under obligation to effect deduction of tax at source. Since that was not done, no exception can be taken to the proceedings under Section 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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