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2015 (1) TMI 1168 - HC - Income TaxInterest liability under Section 234B - non-payment of advance tax - non deduction of tds -assessee was manufacturing equipment relating to oil and gas, energy, transportation and aviation, for supply to customers in India - assessees had a permanent establishment (“PE”) in India - Held that:- The primary liability of deducting tax (for the period concerned, since the law has undergone a change after the Finance Act, 2012) is that of the payer. The payer will be an assessee in default, on failure to discharge the obligation to deduct tax, under Section 201 of the Act. For the above reasons, this Court finds that no interest is leviable on the respondent assessees under Section 234B, even though they filed returns declaring NIL income at the stage of reassessment. The payers were obliged to determine whether the assessees were liable to tax under Section 195(1), and to what extent, by taking recourse to the mechanism provided in Section 195(2) of the Act. The failure of the payers to do so does not leave the Revenue without remedy; the payer may be regarded an assessee-in-default under Section 201, and the consequences delineated in that provision will visit the payer. The appeal of the Revenue is accordingly dismissed - Decided against revenue.
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