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2015 (1) TMI 568 - HC - Income TaxLiability to deduct tax at source as required u/s. 194A - loan against pledge of shares - Special Court conclusively held that the provisions of TDS do not apply to the alleged liability to pay interest to the Custodian by order dated 14.08.1993, 20.2.1995 and 9.9.1996 and 3.5.199 - Held that:- In the present case, we find that the Tribunal has committed serious error in interpreting the provisions of law. It goes without saying that Special Court was created for fast tracking the economy. The purpose for which the Special Court was enacted will prevail over the other law. Hence, we are of the opinion that the Tribunal has committed grave error in holding that the order of the Special Court will not prevail and that the TDS is required to be deducted by interpreting that it will apply only from the date of the order of the Supreme Court i.e. 9th September, 1996. In our view, the Tribunal has committed an error of law in restraining / prohibiting / constraining. Apart from that the appellants-assessees have not made any payment to the Department but have so simply made provision for it. The interpretation put forward by the Tribunal that TDS is income of the Department is misconceived. Therefore, in our view, restrained TDS could not have been deducted. Tribunal was not right in holding that appellants-assessees were liable to deduct tax at source as required under under Section 194A of the Act, in spite of the order of the Special Court. - Decided in favour of assessee.
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