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2014 (1) TMI 1442 - AT - Income TaxNon-deduction of TDS u/s 193 of the Act - Default u/s 201 of the Act – Interest u/s 201(1A) of the Act – Held that:- The assessee Corporation could not calculate the actual interest, it could not deduct TDS as the amount of tax was itself undetermined - These arguments are not substantiated with any documentary evidence nor we find any observations of the lower authorities in this regard. However, the assessee has filed the bunch of papers relating to copy of Form No. 15A and copy of one time settlement offers along with the settled accounts. Relying upon ICICI Bank Limited vs. Dy. CIT [2014 (1) TMI 706 - ITAT LUCKNOW] - Recovery provisions under section 201(1) of the Act can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes - In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - Once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income - once recipient has paid the taxes on the receipts, the payer cannot be held to be the assessee in default and so far the levy of interest u/s 201(1A) is concerned, the interest is compensatory in nature and it is applicable for the period of the date on which tax was required to be deducted till the date when tax was eventually paid. Levy of interest under section 201(1A) is a compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes – The judgement in Bennett Coleman & Co Ltd Vs 1TO [1984 (11) TMI 58 - BOMBAY High Court] followed – thus, levy of interest under section 201(1A) is applicable whether or not the assessee was at fault - it is only compensatory in nature it is applicable for the period of the date on which tax was required to be deducted till the date when tax was eventually paid - unless and until it is established that the recipients have not paid any tax on the receipts on which they are liable to pay the tax, the assessee cannot be held to be in default - So far as the chargeability of interest is concerned, it is to be charged as per the guidelines laid down in the orders of the Tribunal i.e. from the date on which the tax was required to be deducted till the date of payment – thus, the matter is to be remanded to adjudicate the issue afresh – Decided in favour of Assessee.
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