TMI Blog2001 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... way of advance tax and self-assessment tax should be deducted from the gross tax that the defaulter assessee should have deducted under section 194C in computing interest chargeable under section 201(1A) of the Act?" Mr. Akil Qureshi, the learned advocate has appeared for the applicant, whereas Mr. Bhargav Karia has appeared for the respondent-assessee. The facts giving rise to the present reference in a nutshell are as under: The assessee is a co-operative society who had entered into two contracts with Ravi Builder for construction of its building. From the amount which was to be paid by the assessee-society to the contractor, the assessee did not deduct any amount of tax which it was required to deduct as per the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on self-assessment was paid. by Ravi Builder and, therefore, the Appellate Assistant Commissioner held that the levy of interest under the provisions of section 201(1A) was not justified for those two years. So far as the other two assessment years were concerned, the contractor had not paid sufficient advance tax and, therefore, the Appellate Assistant Commissioner came to the conclusion that as advance tax was not paid by Ravi Builder and as the Revenue had not received the amount of tax on the due date, the action of the Assessing Officer with regard to levy of interest for the said years was justified. Thus, the appeal was partly allowed by the Appellate Assistant Commissioner. Being aggrieved by the order passed in the appeal, the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03, by this court. In the said case, no amount of tax was deducted under the provisions of section 194B of the Act and this court held in the said case that the assessee was liable to pay interest under section 201(1A)) of the Act. Upon a perusal of the facts of the said case, we are of the opinion that the facts of the said case and the case which is on hand are absolutely different. In the case of CIT v. Darshan Trading and Finance Pvt. Ltd. [1995] Tax LR 1203, it was submitted by the assessee and it was also held by the Tribunal that the assessee was liable to pay interest from the date of default till the date of actual payment of tax but as the tax was not paid, the amount of interest chargeable under section 201(1A) could not have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of the Act, the said tax can also be deducted at source. The portion of the tax which was payable by Ravi Builder was to be paid by the assessee by deducting tax at source under the provisions of section 194C of the Act. When the assessee was supposed to deduct tax at source and pay the same to the Revenue, the assessee had to pay the same on behalf of Ravi Builder, one who was in fact liable to pay the tax on the income which was earned from the amount which was paid by the assessee to Ravi Builder. According to the provisions of section 190 of the Act, in certain cases, as provided under Chapter XVII of the Act, the tax is to be paid by deduction at source. The said amount is to be deducted by way of tax by the person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to income of Ravi Builder, i.e., the contractor, had become final and no further tax was found due from Ravi Builder, that would put an end to the liability of the assessee-society and as the assessee-society was not liable to make any payment of tax on behalf of the contractor, no amount of interest could be leviable under the provisions of section 201(1A) of the Act. If one looks at the facts of the present case, it is not in dispute that Ravi Builder, on whose behalf the tax was to be deducted and paid under section 194C of the Act had paid more amount of tax by way of advance tax than what was payable and had also paid tax on self-assessment. Thus, it is not at all in dispute that for the relevant two years the amount of tax was pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractor had already been paid by it and that too in excess of the amount which was payable by way of advance tax, in our opinion, the Tribunal was absolutely right in holding that the tax paid by the contractor in its own case, by way of advance tax and self-assessment tax, should be deducted from the gross tax that the assessee should have deducted under section 194C of the Act while computing interest chargeable under section 201(1A) of the Act. If the Revenue is permitted to levy interest under the provisions of section 201(1A) of the Act, even in a case where the person liable to pay the tax has paid the tax on the date due for the payment of the tax, the Revenue would derive undue benefit or advantage by getting interest on the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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