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2018 (8) TMI 2108 - AT - Income TaxTDS u/s 195 - TDS when payment is made to a power of attorney holder even when the de-facto and as well as de-jure ownership lies with the NRI - assessee purchased property from NRI without deducting TDS on the payments made as consideration for the said purchase - AR argued that since the assessee has been dealing with an Indian resident and so no tax was to be deducted by the purchaser and since the seller has already paid the taxes the interest cannot be charged in the hands of the assessee - HELD THAT:- The provisions of 201(1) stipulates that the assessee is liable to deduct tax on the payment and section 201(1)(A) casts liability of the assessee to pay interest on the default. Though the statutory provisions casts liability on the assessee, keeping in view the payment received by the exchequer, whether by the assessee(purchaser) or by the recipient(seller) leverage was given by the authorities not to burden the assessee with the strict liability of the TDS deduction when the recipient pays the due taxes vide Circular No. 275/201/95-IT dt. 29/01/1997. This doesn’t mean the assessee is absolved totally of the responsibility to deduct the taxes and also interest if any. This Circular absolves the assessee in the cases where the due payments of tax or interest has been duly paid by the recipient. Hon'ble Delhi High Court in the case of DIT vs. Jacabs Civil Incorporate [2010 (8) TMI 37 - DELHI HIGH COURT] which says that an authority which is bound to make a deduction of tax at source as per statute, if does not deduct, or after deducting fails to pay the tax, than such a person or authority is liable to pay simple Interest on the amount of tax not deducted. This shows that, liability of the tax deductor is absolute. The assessee who should be the deductor as per statute failed to deduct taxes and is seeking to benefit itself by claiming the benefits which are available to the deductee. AR has also referred to the decision of the ITAT, Hyderabad in the case of Tecumseh Products(I) Ltd. [2006 (7) TMI 529 - ITAT HYDERABAD] - On perusal we find the facts of the case are not applicable to the issue before us. Hence, keeping in view the provisions of the Act and facts of the case we hold that the interest under section 201(1)(A) has been rightly confirmed by the Ld.CIT(A). Assessee appeal is dismissed.
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