9911796707
TMI Blog2000 (10) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment undertaking, which raised loan from Indian Bank Merchant Banking Services Ltd. (hereinafter called IBMBSL for short) The assessee i.e., M/s Hyderabad Allwyn Ltd. was paying interest to IBMBSL and the amount of interest payable by the said assessee to IBMBSL is shown in the table below together with the amount of tax deducted at source and paid to the Government exchequer. ----------------------------------------------------------- S. Fin. year Date Interest TDS Date of No. credited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49,75,068 11,44,266 --------- --------- 3. Total TDS.: Financial year 1991-92 = 20,28,033 Financial year 1992-93 = 11,44,266 --------- Total TDS& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover the amount of TDS. What the assessee is disputing before us, is the action of the AO in charging interest under s. 201(1A) of the IT Act, 1961. 4. On the date of hearing, learned counsel for the assessee raised the following contentions: (i) Assessee was not liable to deduct tax at source out of the interest payable, as there existed a certificate dt. 6th Jan., 1993, issued by the IT Department to the payee under s. 197 and that TDS was not required to be deducted; even if it is deducted but not paid, it would not render the assessee liable to pay interest. (ii) Assessment of payee for asst. yr. 1992-93 and 1993-94 were completed and entire tax due on the income of the payee have been paid, there was no tax liability remaining with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that certificate under s. 197 issued on 6th Jan., 1993, would exempt the assessee from deduction of tax at source even in respect of the tax deductible prior to that date. He contended that Circular No. 774 clearly says that certificate under s. 197 should not be acted upon, if submitted after credit/payment of the amount subject to tax deduction at source and according to learned counsel for the assessee, this circular is prospective in operation and by implication the certificates issued under s. 197 in the past shall have effect even if this has been issued after the credit of the amount subject to tax deduction at source. 7. We have heard rival submissions. As the facts stand, assessee credited interest of Rs. 88,17,534 to the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redited or paid on or after that date. Since in this case, the liability to deduct tax at source arose much before 6th Jan., 1993, we hold that the assessee was liable to deduct tax at source and by not depositing it after deduction in the Government treasury, within the time prescribed rendered itself liable to penal interest under s. 201(1A). 11. We are also not convinced by the argument of the leaned counsel for the assessee that since assessments of the payee were completed and taxes have been paid, there was no liability to deduct tax at source and after deducting at source, it was not required to pay to the Government. If the logic and reasoning advanced by the learned counsel are given effect to, the whole scheme of deduction of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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