9911796707
TMI Blog2003 (3) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... er deducting fails to pay the tax to the Central Government account. There is no discretion vested in the Assessing Officer or for that matter appellate authorities to go into the reasonableness of the cause for belated remittance. In other words, charging of interest under section 201(1A) is mandatory in nature for the simple reason that the assessee has withheld the amount belonging to the exchequer beyond the stipulated date, for which interest is chargeable up to the date of remittance. The word used in section 201(1A) is 'shall' which indicates the mandatory nature of the interest under section 201(1A). 3. The observation of the CIT(A) that the respective Finance Acts did not cast an obligation on the assessee to deduct surcharge is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue extracted herein above. So, the Assessing Officer levied interest under section 201(1A) vide his order dated 29-3-1996 and the said order reads as under: "The short deduction of TDS detected and demanded as per orders under section 201(1) dated 29-3-1996 attract interest under section 201(1A) which is mandatory in nature. In this case the assessee vide its letter dated 26-3-1996 had accepted in principle the short deduction of tax detected by the department. Even if there is no deliberate and mala fide intention on the part of the assessee in not including Surcharge as a part and parcel of TDS leading to short deduction of tax at source, levy of interest under section 201(1A) is inevitable. This is, therefore, charged as per the anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the provisions of section 194C of the Act. Hence, the appellant could not be penalized by way of interest under section 201(1A) for not taking into consideration the surcharge component of the tax while deducting the tax at source under section 194C from the payments made to the contractors. The impugned order is cancelled accordingly." 3. Before me, the learned DR reiterated the contentions made out in the order of the ITO, TDS and the grounds taken by the Revenue. The learned Counsel for the assessee, on the other hand, relied on the order of the CIT(A) and he has also relied upon the order of the Tribunal dated 28-10-1996 passed in ITA No. 944/H/93 in the case of the assessee for the Asst. Year 1991-92. 4. I am of the view that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the Finance Act. This is in contrast to the "provisions of sub-section (1) of section 4 of the I.T. Act wherein it is stipulated that Income Tax has to be charged as per the terms of the concerned Central Act which is the annual Finance Act. Even though, there is a difference between the provisions of sub-sections (1) and (2) of section 4, it does not follow that the Finance Act can be totally ignored for the purpose of deduction of tax at source. The Finance Act has as much validity and legal authority as the Income-tax Act. In the present case, sub-section (5) of section 2 of Finance Act, 1994 has cast an obligation on the assessee to deduct surcharge also' as claimed by the Revenue in the grounds taken in this appeal. I am of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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