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2014 (10) TMI 3 - HC - Income TaxAssessee in default u/s 201 – TDS deduction – Held that:- The deduction of tax at source is one of the important features of the Act - In a way, it obviates the necessity for the department to track the amount paid by an assessee to another, and then to levy tax on the recipient - The failure to deduct tax at source which was otherwise to be done, invites several consequences, including levy of interest u/s 201 of the Act. Such assessee is liable to be treated as the one, in default, u/s 221 of the Act - 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 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.
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