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2014 (8) TMI 726 - AT - Income TaxLow or Non-deduction of Tax at source certificate u/s 197 – Assessee in default u/s 201(1) - advance tax was paid by the deductee – Held that:- There was a short deduction of tax u/s 194C of the Act, but the deductee has also paid advance tax in different quarters – relying upon Jagran Prakashan Ltd. v. Deputy Commissioner of Income-tax (TDS) [2012 (5) TMI 488 - ALLAHABAD HIGH COURT] and Hindustan Coca Cola Beverage P. Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] and also CBDT Circular No.275/201/95-IT(B) dated 29.1.1997 - when tax was paid by the deductee, the assessee shall not be held to be in default, but the interest u/s 201(1A) of the Act is mandatory and is to be calculated from the date tax was deductible at source till payment by the payee by way of advance tax or any other mode - CIT(A) has passed a just and proper order by directing the AO to compute the interest chargeable u/s 201(1A) of the Act – Decided against assessee. Charging of interest on short deduction – Held that:- In Hindustan Coca Cola Beverage P. Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] and CBDT Circular no. 275/201/95-IT(B), dated 29th January, 1997 it has been clearly held that "interest u/s 201(1A) of the Act till the payment of taxes" will be applicable - it will be against the very context of levy of interest that the interest is compensatory in nature - as charging of interest u/s 201(1 A) is mandatory and there is short deduction as the certificate for lower deduction of tax has been held to be not applicable to the assessee, the AO is directed to re-compute the short deduction of TDS for various dates of payments by the deductor to the deductee and charge interest u/s 201(1A) from the date the TDS was deductible to the date on which such tax is actually paid by the deductee by way of payment of advance tax to the extent of including this liability for the respective quarter after the assessee furnishes evidence for date wise payment of taxes by the deductee - The AO is directed to re-compute the interest u/s 201(1A) – Decided partly in favour of Assessee.
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