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2012 (10) TMI 293 - AT - Income TaxNon deduction of TDS - payment for purchase of three bedroom residential flat in the land at a multistoried residential complex - assessee in default u/s 201(1) - Held that:- From a plain reading of section 195(1) it is clear that the assessee was liable to deduct tax at source at the specified rates (i.e. 20% plus surcharge 10% and education cess 2%) from out of the sale consideration paid by him to the seller of the said flat purchased by him as she was an NRI. If the assessee (i.e. the person responsible for paying such sum to the NRI seller) was of the view that the whole or part of such sum viz. the sale consideration, would not be income chargeable in the hands of the recipient (i.e. in this case the seller, an NRI), Section 195(2) required him to make an application to the Assessing Officer under section 197 r.w.s. 195(2) to determine the amount chargeable and upon such determination deduct tax on such sum so determined. A plain reading of the provisions of section 201 of the Act clearly indicate that it is consequential and gets activated the moment an assessee liable to deduct tax under the Act fails to either deduct or pay the same at source - As decided in CIT Versus Samsung Electronics Co. Ltd. [2009 (9) TMI 526 - KARNATAKA HIGH COURT] the Assessing Officer is competent to quantify and raise demand under section 201 and issue notice of demand under section 156 the moment the assessee failed to deduct tax at source at the specified rate from the sale consideration before making payment of the same to the seller who is an NRI in the relevant period. The action of the AO in charging the assessee, interest under section 201(1A) is consequent to the quantification of tax demand under section 201(1) r.w.s. 195 and is chargeable in respect of any person who has failed to deduct the whole or part of any tax at the rates and period specified therein. Therefore, uphold the Assessing Officer's action of charging of interest under section 201(1A). The CIT (Appeals) has already addressed issue of quantification of interest in which he has directed the Assessing Officer to verify the assessee's claim of payment of taxes to the extent of ₹ 2,61,764 on 24.10.2009 out of demand of ₹ 13,82,820 and rework the interest chargeable under section 201(1A) of the Act. As no submissions have been made with regard to any error by the learned CIT (Appeals) in his order, the assessee's grounds on this issue are dismissed as infructuous - appeal decided against assessee.
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