TMI Blog2011 (9) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Case remanded back. Levy of interest for failure to deduct and pay TDS - retrospective amendment - section 201 - held that:- even though at the relevant years, as Section 194A read with Section 201 stood, there was no liability to pay interest on the assessee by virtue of retrospective operations, he is liable to pay interest. Therefore, the said finding recorded by the authorities concurrently cannot be found fault with. Hence, the first substantial question of law is answered in favour of the revenue and against the assessee. - IT APPEAL NOS. 413, 444 & 445 OF 2009 - - - Dated:- 12-9-2011 - N. KUMAR AND RAVI MALIMATH, JJ. Chythanya K.K. for the Appellant. Jeevan J. Neeralgi for the Respondent. JUDGMENT N. Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be dismissed. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal, which also came to be dismissed. Aggrieved by the said order, the assessee is before this Court. 3. The learned Counsel for the assessee assailing the impugned order contends that the assessee is running under loss. He has borrowed money from the creditors and was liable to pay interest. As he was running under loss, he did not make any payment of interest. But for the purpose of complying with the provisions of the Companies Act, a credit entry was made as if the interest is paid to the creditors. On such entry being made, such payment of interest shown as an expenditure, though actually was not paid and the said amount was really not an expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, the order of the tribunal and lower authorities holding that the assessee is liable to pay interest on the amount deducted or not deducted till the date of order of assessment is erroneous. 4. Per contra, the learned Counsel for the revenue pointed out that when once Section 201 has been amended retrospectively plugging the loophole of not including section 194A within the scope of the said provision even though on the day the amount was credited to the account of the creditors and on the day returns were filed by the assessee for the relevant years, there was no liability to pay interest in view of the retrospective effect of the amendment, the liability exists and rightly the said liability has been imposed by the lower a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors by way of interest is credited to the account of the payee under Section 194(A), they shall deduct income tax thereon at the rate in force and remit the same to the department. Admittedly, in this case though interest payable to the creditors was credited to the account of the payee, it was not actually paid. Therefore, no income was deducted at source as there was no payment at all. Section 200 of the Act provides that any person deducting any sum in accordance with the provisions of this Chapter shall pay within the prescribed time, the sum so deducted to the credit of the Central Government or as the Board directs. Section 201 deals with the consequences of failure to deduct or pay. Section 201 prior to its amendment during the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, in the first place, the validity of the amendment is not challenged. It is well settled that the Parliament has the power to bring in any legislation making it retrospective in nature. By such an amendment, even vested rights and substantive rights could be taken away or modified. The only limitation on the Parliament making any such law retrospective is that the person should not be exposed to criminal liability. Therefore, even though at the relevant years, as Section 194A read with Section 201 stood, there was no liability to pay interest on the assessee by virtue of retrospective operations, he is liable to pay interest. Therefore, the said finding recorded by the authorities concurrently cannot be found fault with. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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