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2017 (11) TMI 1717 - HC - Income TaxTDS u/s 195 - levy of interest u/s 201(A) - assessee failed to deduct tax at source as mandatorily required u/s 195 and wrongly gave benefit of the orders u/s 195/197 of the Act, beyond the amount and period of their validity? - Interest on the amount of tax which had already been paid on the due date - Held that:- In the instant case Ravi Builder, on whose behalf the tax was to be paid by the assessee, had duly paid its tax and was not required to pay any tax to the Revenue in respect of the income earned by it from the assessee. If the tax was duly paid and that too at the time when it had become due, it would not be proper on the part of the Revenue to levy any interest under Section 201(1A) of the Act especially when Ravi Builder had paid more amount of tax by way of advance tax than what was payable by it. As the amount of tax payable by the contractor had already been paid by it and that too in excess of the amount which was payable by way of advance tax, in our opinion, the Tribunal was absolutely right in holding that the tax paid by the contractor in its own case, by way of advance tax and self-assessment tax, should be deducted from the gross tax that the assessee should have deducted under Section 194C while computing interest chargeable under Section 201(1A). If the Revenue is permitted to levy interest under the provisions of 201(1A), even in a case where the person liable to pay the tax has paid the tax on the date due for the payment of the tax, the Revenue would derive undue benefit or advantage by getting interest on the amount of tax which had already been paid on the due date. Such a position, in our opinion, cannot be permitted. - Decided in favour of assessee.
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