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2023 (3) TMI 604 - AT - Income TaxTDS u/s 194A - interest was credited to the depositor's account only on the date of maturity of the deposit - orders under Sections 201(1) & 201(1A) of the Act making the assessee as an assessee in default - CIT(A) concluded that the assessee ought to have deducted tax at source on credit to the account of interest income instead of making deduction of tax at source when interest is paid on maturity - HELD THAT:- Assessee’s contention that a part of the interest charged to the P&L Account has neither been paid nor credited to the customers account, rather credited to the interest payable account and thereore the same is not liable to TDS under Section 194A is devoid of any merit. Section 194A of the Act mandates that any persosn responsbile for paying to a resident any income by way of interest (other than interest on security) shall at the time of credit of such income to the account of the payee or payment thereon in any mode shall deduct TDS thereon at the rate in force. The Explanation below sub-section (1) of Section 194A of the Act clarifies that where any income by way of interest is credited to any account, whether called “interest payable account” or “suspense account” or any other name in the books of account of the payer, such credit shall be deemed to be credit for the purpose of Secton 194A of the Act. Therefore the above contention raised by the assessee is rejected. Assessee contends that it had deducted tax at source on a later point of time, i.e. at the time of maturity of deposit and to such kind of deduction of tax at source, the assessee ought to be granted credit/adjustment for treating the assessee as an assessee in default - When the assessee has already deducted tax at source (though at a latter point of time) to the same extent assessee cannot be made an assessee in default under Section 201(1) of the Act, as this would amount to collection of tax at source under Section 194A of the Act twice. However, we make it clear that the assessee would be liable for interest under Section 201(1A) of the Act in respect of the said amount. Therefore, it is for the assessee to prove the above contention raised. Hence, we restore grounds C & D to the files of the AO. The assessee shall provide necessary details/ proof for the amount of tax that is deducted at source under Section 194A of the Act at a later point of time for claiming credit/adjustment against the orders passed under Section 201(1) of the Act. Once again we make it clear that the assessee shall be liable for interest as per the provisions of Section 201(1A) of the Act in respect of the tax deducted at source at a later point of time. Appeals filed by the assessee are partly allowed for statistical purposes
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