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TMI Blog2013 (12) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... common order. 3. The assessee had, in its grounds of appeal, raised seven grounds in an illustrative and exhaustive manner. However, the grievance of the assessee is confined to a solitary issue, namely: 'that the CIT (A) erred in confirming the action of the AO (TDS) on levy of interest u/s 201(1A) of the Act till the due date of filing of the returns of income for the relevant financial years concerned'. 4. The facts of the issue, in brief, are as under: The assessee, a Private Limited Company, is engaged in the business of providing third party administration services (TPA) on health insurance issued by the Insurance Companies and is governed by the Insurance Regulatory and Development Authority (IRDA). There was an acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest u/s 201(1A) of the Act up-to the due date of filing of the returns of income for the following reasons: "Note: ................................................... ...................................................... The deductors pay advance tax in four installments starting from June to March. Some of the assessee clear the tax liability by way of self-assessment tax. In some cases after scrutiny further demand would have been paid. In the absence of all the above information, the due date of filing the return of income is taken for the purpose of calculation of interest u/s 201(1A). Auditor certificate does not give any of the above information and some certificates have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a date prior to the due date of filing of the return of income. In such a case, the action of the AO in complying with the order of CIT (A)-V, Bangalore dated 22.2.2010 as has been done by him cannot be faulted with." 7. Aggrieved, the assessee has come with the present appeals. During the course of hearing, the submissions made by the learned A R are summarized as under: (i) that the CIT (A) grossly erred in confirming the stand of the AO (TDS) on levy of interest u/s 201(1A) of the Act till the due date of filing of return of income for the relevant financial year concerned; (ii) that she ought to have held that the above action of the AO was contrary to the directions of the CIT (A)-V; (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that, in the Circular it is made clear how the interest is to be calculated. The grievance is in respect of the said Circular instead of calculating the interest till the date of payment of the tax by the deductees, the interest is calculated up-to the due date of filing of return. In fact, this Court had an occasion to consider this question in the case of Solar Automobiles India (P) Ltd v. Deputy Commissioner of Income-tax reported in where at para-9 it is held as under: '9. In so far as payment of interest under section 194A is concerned, the interest is payable for the period it is not paid after deduction. The principal liability of paying tax is that the creditor and a statutory duty is cast on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at would meet the ends of justice......................" 8.2. On a decisive perusal of the observations of the Hon'ble Court (supra), it is observed that the AO has to find out whether the creditors (hospitals) have filed their returns and paid the taxes. If they have filed the returns and paid the taxes, the liability of the asessee ceases from the day they have paid the taxes. This exercise has not been done by the AO with letter and spirit, instead, he had adopted the due date of filing of return of income for the purpose of calculation of interest u/s 201(1A) of the Act which, in our considered view, goes contrary to the substance of the ruling of the Hon'ble Jurisdictional Court. 8.3. In view of the above, the AO is directed to under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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