TMI Blog2014 (8) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] and CBDT Circular no. 275/201/95-IT(B), dated 29th January, 1997 it has been clearly held that "interest u/s 201(1A) of the Act till the payment of taxes" will be applicable - it will be against the very context of levy of interest that the interest is compensatory in nature - as charging of interest u/s 201(1 A) is mandatory and there is short deduction as the certificate for lower deduction of tax has been held to be not applicable to the assessee, the AO is directed to re-compute the short deduction of TDS for various dates of payments by the deductor to the deductee and charge interest u/s 201(1A) from the date the TDS was deductible to the date on which such tax is actually paid by the deductee by way of payment of advance tax to the extent of including this liability for the respective quarter after the assessee furnishes evidence for date wise payment of taxes by the deductee - The AO is directed to re-compute the interest u/s 201(1A) – Decided partly in favour of Assessee. - ITA Nos. 440,441,442 & 466/LKW/2012 - - - Dated:- 21-8-2014 - Sunil Kumar Yadav, JM And A. K. Garodia, AM,JJ. For the Appellant : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D), Lucknow on the basis of TAN is erroneous. 6. Because the finding of learned first Appellate authority in point No.3.3.3 of appellate order that while there is overall claim for refund, but there is short payment of advance tax in various quarters when considered with reference to the liability to deduct tax at source on various dates by the deductor and the actual dates of payments by way of advance tax by the deductee is erroneous in view of clear position displayed in the chart of short deduction pointed by the Assessing Officer and details of advance tax liability and advance tax paid by the deductee; both given on Page 6 of the appellate order. 7. Because in view of the clear position brought out in chart and the evidence of (i) advance tax paid by the deductee and (ii) filing the Return of Income, filed in appellate proceedings, the learned first appellate authority ought to have held that no interest was payable by the deductor u/s 201(1A) of the I.T. Act, 1961. 8. Because the learned first appellate authority officer did not allow the appellant sufficient opportunity to produce evidence of advance tax paid by the deductee, as per chart as also the Return of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without prejudice to the above) learned first appellate authority ought to have directed the assessing officer to reduce/delete the demand raised on the assessee to the extent tax liability of the deductee stood discharged by payment of advance tax by the deductee; the same treatment was done by the assessing officer himself in second and third quarters of financial year 2007-08 relevant to A. Y. 2008-09. 7. Because in view of the evidence of (i) advance tax paid by the deductee and (ii) filing the Return of Income, filed in appellate proceedings, the learned first appellate authority ought to have held that no interest was payable by the deductor u/s 201(1A) of the I.T. Act, 1961. 8. Because the learned first appellate authority officer did not allow the appellant sufficient opportunity to produce evidence of advance tax paid by the deductee, as per chart as also the Return of Income to arrive at a clear cut position before passing the appellate order by the learned by the first appellate authority. 9. Because the order appealed against is contrary to facts, law and principles of natural justice. 3. During the course of hearing of the appeals, the ld. counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the assessee furnishes evidence for date-wise payment of taxes by the deductee. 5. Aggrieved, the assessee has preferred an appeal before the Tribunal with the submission that since advance tax was paid by the deductee and there was surplus payment in different quarters, no interest shall be charged under section 201(1A) of the Act. 6. The ld. D.R., on the other hand, has placed reliance upon the order of the ld. CIT(A) with the submission that under the given facts and circumstances of the case, the ld. CIT(A) has taken a cognizance of the advance tax paid by the deductee and has given proper directions as required under the law. 7. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below, we find that undisputedly there was a short deduction of tax under section 194C of the Act, but the deductee has also paid advance tax in different quarters. In the light of the judgment of the Hon'ble jurisdictional High Court Jagran Prakashan Ltd. v. Deputy Commissioner of Income-tax (TDS) (supra) and the Hon'ble Apex Court in the case of Hindustan Coca Cola Beverage P. Ltd. vs. CIT (supra) and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Therefore, the action of the Assessing Officer in disregarding the certificate issued in the name of CDA (DAD), Bangalore and treating the appellant in default for short deduction's in accordance with law and is correct. Hence, grounds no. 1, 2 and 3 are rejected. In view of the decision of Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage Pvt. Ltd. 293 ITR 226, the Assessing Officer has himself observed that the short deduction cannot be realized from the deductor as the deductee has made payment of the tax deducted short by way of advance tax. 3.3 Ground no. 4 is regarding charging of interest on short deduction. In the course of the appeal, the appellant relied upon the decision of CIT v. Goel Builders (2011) 331 ITR 344 (All.) and also the decision of Hon'ble Supreme Court in Radhasoami Satsang 193 ITR 321. However, the issues and the facts in these cases are different and, therefore, these cases being distinguishable, are not applicable to the facts of the case. The appellant has further submitted as under:- 13. Without prejudice to the above plea, it was argued before the learned DCIT (TDS), that since no tax is due from the deductee, tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion pointed out by the assessing officer Quarters Short deduction pointed out Interest u/s 201(1)(A) 2nd Qr. Rs.4,90,71,880/- Rs.24,30,868/- 3rd Qr. Rs.1,74,53,260/- Rs.19,02,137/- 4th Qr. Rs.1,44,30,880/- Rs.53,32,650/- B. Assessee's tax liability for A. Y. 2008-09 ₹ 2,39,75,7,750/- Less: Tax deducted at source. ₹ 107,44,66,104/- Net liability of advance tax. ₹ 1,32,31,06,646/- C. Details of advance tax liability for A.Y. 2008-09 and deposits of advance tax. Due date Advance tax due Advance tax paid Progressive tax paid Cumulative excess deposit of advance tax By 15' June 07 15% 19,84,66,000 45,00,00,000 45,00,00,000 25,15,34,000 By 15th Sep,07 45% 59,53,98,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar view has been held in CIT v. Dhanalakshmy Weaving Works [2000] 245 ITR 13 (Ker.), CIT v. K.K. Engg. Co. [2001] 116 Taxman 390 (Ker.), CIT v. Assam Small Industries Development Corporation Ltd. [1996] 219 ITR 324/88 Taxman 1 (Gauhati), CIT v. Prem Nath Motors (P.) Ltd. [2002] 120 taxman 584 (Delhi). Further, it has been held in CIT v. Majestic Hotel Ltd. [2006] 155 Taxman 447 (Delhi) and CIT v. Munni Lal Co. [2006] 157 Taxman 466 (Raj.) that the question whether the assessee had any bona fide belief or reasonable cause for not making the deduction at source is wholly irrelevant to the question whether it is in default within the meaning of section 201. It is only for purposes of levy of a penalty as contemplated under section 201, read with section 221, that the sufficiency of reasons for the failure to deduct or to pay the tax assumes importance. Even under section 273B, the reasonableness of the cause for the imposition of a penalty is relevant only in relation to the provisions deferred to in the said section. Levy of interest under section 201(1A) is neither treated as a penalty nor has the said provision been included in section 273B to make 'reasonableness of the caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed representatives relied on the submissions made in the appeals of the 2nd and 3rd Quarters and also requested for relief on account of short deduction. The appellant was found to have filed a rectification application also against the order u/s 201(1)/201(1A) which had been rejected vide order dated NIL by the Assessing Officer and a certified copy of which dated 19.07.2011 had been filed with the appeal memo in the appeal filed against the order u/s 154. As the appellant has already filed an appeal against the order u/s 154, the appeal filed against the original order on the same issue is prima facie infructuous and is hereby dismissed as the original order has been subjected to rectification on the same issue. Hence, the appeal for the 4th Quarter is dismissed as being infructuous and the issues raised shall be considered in the appeal filed against the order u/s 154 of the Income-tax Act, 1961. 8. Since the direction issued by the ld. CIT(A) are in accordance with the law, we find no infirmity therein and we accordingly confirm the same. I.T.A. No.442/LKW/2012: 9. In this appeal, the assessee has sought rectification in the assessment order besides filing of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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