TMI Blog2006 (4) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty order was passed, the direction to recalculate the interest up to the date of assessment is not in accordance with law, 1.( b ) Without prejudice to the ground No. 1 and 1( a ) above, the decision of the ld. CIT(A) is misconceived as the interest is to be charged under section 201(1A) for delay in payment of TDS and non-payment thereof. This has nothing to do with the tax paid or payable in the case of the deductee. 1.( c ) Without prejudice to the ground No. 1, 1( a ) and 1( b ) above, the ld. CIT(A) grossly erred in law in ignoring the provisions of Sec. 201(1A) which reads "he or it shall be liable to pay interest .... on the amount of such tax from the date on which such tax was deductible to the date of on which such tax is paid" ".... The learned CIT(A) erred in not interpreting the meaning of the word such tax correctly. Here such tax means the TDS deductible and not paid." 3. A survey was conducted on assessee under the provisions of section 133A of Income-tax Act, 1961 on 6-3-2000 wherein a statement on oath under section 131 of the Act was recorded of the Director of the company. The Director admitted that company has committed the default in respect of TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no loss of revenue to the department and therefore, levy of interest should be deleted. Considering these submissions, ld. CIT(A) had restricted the levy of interest only to the extent up to the date of assessments in the hands of payees. The concluding portion of order of ld. CIT(A) is reproduced hereinbelow for the sake of convenience : "I have very carefully considered the submissions of the appellant and have gone through the relevant materials available on record. I have also perused the decisions relied upon by the appellant and the Assessing Officer, if any, I find that the appellant had not paid the TDS to the Government account till the penalty orders were passed. I also find that TDS could not be paid into the Government account on account of non-availability of liquid funds. I also find that the interest under section 201(1A) has been charged from the appellant for the delayed period up to the date of passing of the order by the Assessing Officer. I also find that payee s of whom the tax was deducted by the appellant have filed their returns of income and have paid due taxes except in the case of M/s. Labh Organisers for assessment year 1997-98 where deemed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the years under appeal from the date of deduction of TDS to the date of completion of assessment order up to the actual date of TDS whichever is earlier and where no assessment has been made, up to the date of processing of return under section 143(1)( a ) of the Act and charge interest accordingly. After careful consideration, we are of the opinion that these directions of CIT(A) are in accordance with the decision in the case of Voltas Ltd. ( supra ), it will be relevant to reproduce following observations of the Tribunal from the said order : "10. We are not convinced with the argument of the learned counsel for the assessee that it was not liable to deduct tax at source, in view of the certificate dated 6-1-1993, issued under section 197 to the payee. In fact, as on the date of deduction i.e., as on 31-3-1992, and as on 30-9-1992, the liability to deduct tax at source was there and the tax in fact was deducted by the assessee-company. Certificate dated 6-1-1993, cannot be said to be having any retrospective effect and would apply in respect of the amount of income credited or paid on or after the date. Since in this case, the liability to deduct tax at source arose much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty has wrongly been levied. The assessee did not have requisite information to fill up the Form 16A. Issuer had no authority to issue TDS certificates. Section 203 of the I.T. Act, TDS certificates are required to be issued within the specified time to the person who is liable to get credit of the TDS and in the prescribed certificate. Rule 31 of the I.T. Rules, 1962 provides that TDS certificate in the prescribed form should be issued within 30 days from the date of payment/credit to the Government account. The prescribed form in the present case is form as prescribed under section 194A of the Act where following particulars have to be filled in Form No. 16A : 1.Date payment/credit 2.Amount paid/credited 3.Amount of income-tax deducted 4.Rate at which deducted 5.Date of challan No. of deposit of tax into Central Government A/c 6.Name of bank and branch where tax deposited 7.Certificate that a sum of Rs. (in word) ...... has been deducted at source and paid to the credit of the Central Government 8.Date of issue of TDS certificate. Thus, it was contended that unless the assessee is in possession of information mentioned at serial Nos. 1 to 7, TDS certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificates, quantum of penalty could not be worked out. The Legislature has provided charging of interest for the delayed payment of tax to the Government account under section 201(1A) of the Act. I, therefore, hold that the Addl. CIT, TDS Range, Ahmedabad had erred in levy of penalty under section 272A(2)( g ) of the Act. Accordingly, penalty levied for all the years is deleted. 10. Revenue is aggrieved, hence in appeal. It was vehemently argued by ld. DR that non-availability of particulars regarding deposit of tax cannot be a ground for cancellation of penalty. There was no force in the argument of assessee that the credit given in respect of interest was only a hypothetical entry. It was pleaded that profit and loss account of the assessee was prepared after considering the liability of interest so debited in the books and assessee has computed its taxable income after considering the deductibility of said interest from its income. Thus, he pleaded that levy of penalty has wrongly been cancelled by ld CIT(A). Therefore, his order is liable to be set aside. 11. On the other hand, the ld. AR of the assessee pleaded that Form No. 16A requires to fill in various particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to issue TDS certificate under section 203 and deductee is incompetent to avail credit of TDS in his assessment unless the tax has been paid to the credit of Central Government. The intention of the law makers is to levy penalty in the cases where in spite of deposit of taxes to the credit of Government account by the deductor no certificate if issued in the prescribed time resulting into inconvenience both to the deductee and to the Central Government in possessing and granting of refunds/credits etc. It was further pleaded that assessee supports the order of CIT(A) for deleting the penalty. The time limit for issue of TDS certificate has to be counted from the date of payment to the credit of Central Government because only in such a situation the deductor can issue the valid certificate and deductee can validly claim the refund of tax/credit of tax upon receipt of the TDS certificates. 12. It was further pleaded that CBDT has issued guidelines to claim belated refunds wherein the assessee was prevented to claim the refund in the normal course of assessment proceedings in a situation like that of the assessee where the deductee will make the application to avail the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been deposited till date. Non-deposit of TDS itself is a default and assessee cannot take shelter of that non-deposit for non-levy of penalty by pleading that particulars of deposit of tax were not available, therefore, Form No. 16A could not be issued by the assessee. The law in this respect is clear that principle of double jeopardy not available to the penalties leviable under I.T. Act, 1961. The doctrine enshrined in article 20(2) of the Constitution of India is not applicable in respect of penalty prescribed under I.T. Act. Reliance in this regard can be placed on the decision of Hon ble Gujarat High Court in the case of CIT v. J.L. Trivedi Sons [1994] 210 ITR 112 wherein in this respect the observations of their Lordships are as under: "5. In our opinion, there is much substance in this contention raised on behalf of the revenue. Article 20(2) can be invoked, if the following conditions are satisfied : 1.There must be a previous prosecution. 2.The accused must have been punished at such prosecution. 3.The subsequent prosecution must also be one for the prosecution and punishment of the accused. 4.The prosecution on both the actions must be in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of TDS or delay in depositing TDS to Government account can certainly not be taken as reasonable cause for not filing returns. Income-tax Officer v. Shri Gajanan Auto Engg. (P.) Ltd. [2002] 75 TTJ (Pune) 75". 14. In view of above discussion, we are of the opinion that penalty was rightly levied by Assessing Officer and CIT(A) was wrong in deleting the same. However, as in the appeals relating to levy of interest, we have uphold the order of CIT(A) on the ground that interest should be levied only up to the date as mentioned in the order of CIT(A), keeping in view the said order, we direct the Assessing Officer that penalty should be restricted to the period of default up to which levy of interest has been upheld. 15. Now coming to the case law relied upon by ld. AR in the case of Kedia Textile (P.) Ltd. ( supra ), the issue was not relating to levy of penalty under section 272A(2)( g ). In the said case assessee did not furnish any document in support of the ground raised that the parties who issued the certificate had actually paid the tax to the Central Government. Therefore, assessee was not entitled to get refund of TDS. Thus, the said case is not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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