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2010 (11) TMI 393 - AT - Income TaxAssessee in default - TDS u/s 195 - The assessee had taken three Air Crafts on wetlease from M/s Caribjet Inc. in December, 1995, it terminated the lease in September, 1996 - it is clear that, the assessee has been prevented from deducting tax at source under section 195 of the Act, despite its best bona fide efforts - The courts of appeal in United Kingdom have not permitted it to comply and on the other hand, by directing the assessee to pay the amount into the escrow account of the solicitors, for which even the RBI permitted and thereafter allowing Caribjet to withdraw the same, made it impossible for the assessee to deduct tax at source and put the issues beyond the control of the assessee - The law of impossibility of performance does not necessarily require absolute impossibility, but also encompass the concept of severe impracticability - when the assessee is prevented from deducting tax under section 195, the question of his not performing the obligation under law does not arise and thus he cannot be held a defaulter - Held that: assessee cannot be held to be an assessee in default in terms of section 201 and 201(1A) of the Act - Decided in favour of the assessee
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