TMI Blog2008 (10) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... rce to the revenue. Assessing Officer issued notice to the respondent and after enquiry found that the respondent had violated the mandate of section 194A. The Commissioner (Appeals) confirmed the order of the Assessing Officer. Tribunal partly allow the appeal. Held that- (i) the respondent was liable to pay interest on the undeducted tax. (ii) that the Tribunal had rightly directed that the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent becomes liable to pay the said amount to the Revenue under section 201 of the Income-tax Act with interest and penalty. 3. The respondent failed to deduct and remit the tax deducted at source amount to the Revenue. The Assessing Officer issued notice to the respondent, after enquiry found that the respondent has violated the mandate of section 194A. Hence, he directed the company to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the Tribunal was correct in holding that no interest need be paid by the assessee for non-deduction of TDS (being con-sequential) after having held that the assessee was liable to deduct TDS on the interest component paid by having remanded to verify certain facts and recompute the interest ? (ii) Whether the Tribunal was correct in holding that there was no specific provision to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to levy interest for delayed remittance. It is in the practice of the Revenue that for belated payment of tax for any reasonable cause, the assessee is liable to pay interest at the rate of 12 per cent. per annum. Similarly, for refunds, the Revenue pays interest to the assessee. Therefore, the levy of interest under section 201(1A) cannot at any rate be construed as a penalty. In that view, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the interest received. If it is found that there is a tax liability on the person concerned, the Revenue should collect the tax from the person concerned and refund the amount to the respondent. So also, if there is no tax liability on the person concerned, the TDS collected should be refunded to the respondent, of course with interest in either case. 9. With the above observations, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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