TMI Blog2007 (3) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has mentioned that she was not aware of the fact that she is liable to deduct tax at source from the payments by her for the reason that the seller was a non-resident. Inadvertently, the appellant failed to deduct tax at source from such payment made. The seller paid an advance tax of Rs. 4,25,126. The seller filed a return on July 18, 2002, in which long-term capital gains of Rs. 16,80,782 was disclosed in respect of property purchased by the appellant. The seller filed the revised return on March 23, 2003, vide which an income of Rs. 62,28,370 was declared. Along with the revised return the assessee paid not only the tax but also interest under sections 234B and 234C of the Income-tax Act, 1961. The total amount paid along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer was not legally competent to issue another notice calling upon the appellant to show cause as to why the appellant should not be held as the assessee in default. The learned authorized representative submitted that once an order is cancelled without any direction of redoing the same, the Assessing Officer could not have passed order under the same section and for the same default. We have heard both parties. According to us the issue raised before us has been answered by the jurisdictional High Court in the case of Ashok and Co. v. CIT [1992] 195 ITR 786 (Karn). In that case, assessment order was cancelled without order of remand. The learned High Court held that the Assessing Officer was competent to make an order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the jurisdictional High Court, it is held that the Assessing Officer was competent to pass a fresh order. The second grievance of the appellant is that the learned Commissioner of Income-tax (Appeals) should have held that the appellant is not liable to deduct tax under section 195 as the seller was a non-resident HUF. Before us, the learned authorised representative argued that the property, which was purchased, is situated in India. The payment was made in India at the time of registration. The appellant could not have been aware of the fact that the sellers are non-residents. On the other hand, the learned Departmental representative supported the order of the learned Commissioner of Income-tax (Appeals). It is seen from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged interest up to October 31, 2004. We have heard the parties. Deduction of tax at source is one of the modes of recovery of tax. The deductor pays the tax on behalf of the deductee. As per section 191 of the Income-tax Act, if the deductor fails to make the requisite deduction of tax at source, the deductee would be liable to pay income tax on the amount received by him as income. The Delhi High Court held that there is no justification for the Revenue to seek to levy interest for any period after the date on which the tax is actually paid. Here there is no dispute that tax of the seller has been paid along with interest while following the revised return on March 23, 2003. No tax was payable after that date once the interest under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te on which such tax was deductible to the date on which such tax was actually paid. In the instant case, the tax has actually been paid not by the deductor but by the deductee. The total tax payable as per the assessment order of seller is Rs. 12,74,629. A sum of Rs. 4,25,126 was paid in advance. Hence the tax which was payable by the seller in respect of capital gains accruing on the sale of property after adjustment of advance tax was only Rs. 8,49,503. On this amount, the seller has paid interest under sections 234B and 234C from April 1, 2002, till the date of order i.e. May 9, 2003. As per the Assessing Officer, the total tax deductible at the rates in force was Rs. 19,38,000. The Assessing Officer himself has given credit of advance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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