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2016 (3) TMI 539 - AT - Income TaxTDS U/S 194J - initiation of proceedings u/s 201(1)/(1A) - Held that:- We hold that payment made to M/s Glow Show Stage Events requires deduction of tax u/s 194J of the Act. There will be no liability of the payer u/s 201(1) to the extent of the payee including the amount received in its total income and paying tax thereon. However, liability towards interest u/s 201(1A) will still be there from the date on which such tax was deductible to the date of furnishing of return of income by M/s Glow Show Stage Events even if the assessee is not treated as in default u/s 201(1). Non deduction of tds u/s 192 - TDS ON TIPS TO EMPLOYEES - assessee found to have paid Tips to its employees during the two years under consideration on which no deduction of tax at source was made as AO treated such tips to employees as part of 'Salaries’ - initiation of proceedings u/s 201(1)/(1A) - Held that:- As decided in ITC Ltd. [2011 (5) TMI 310 - DELHI HIGH COURT] such tips have been held to be chargeable to tax in the hands of employees. However, as regards the obligation of the employer to deduct tax at source and the consequential liability u/s 201(1), the Hon’ble Court held that the benefit of bonafide belief be given to the assessee. However, the obligation for interest u/s 201(1A) still remains as has been clarified by the Hon’ble Delhi High Court in the aforestated case of the assessee with the caption of ITC Ltd. (supra). The action of the ld. CIT(A) in also erasing the liability u/s 201(1A) is, therefore, set aside. We, therefore, hold that the assessee is liable for interest u/s 201(1A) in respect of non-deduction of tax at source from tips given to its staff.
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