TMI Blog2014 (9) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... uctibility of tax till the end of the Financial Year - levy of interest u/s 201(1A) is neither treated as penalty nor has the said provision been included in Section 273B to make “reasonableness of the cause” for the failure to deduct a relevant consideration - Section 201(1A) makes the payment of simple interest mandatory - The payment of interest under that provision is not penal - There is no question of waiver of such interest on the basis that the default was not intentional or on any other basis. If the employees (i.e. payee) had paid taxes as per the individual return/assessment, no amount as tax would be payable to that extent and the liability for interest would be only for the period commencing from the date of such tax was ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. 3. Respondent-assessee did not deduct Tax at Source on the salary paid on the ground that tax was not required to be deducted. The Assessing Officer disagreed and also directed interest under Section 201(A) of the Act be charged. 4. The respondent-assessee challenged the order of the CIT (Appeals) before the Tribunal primarily on three grounds. The first one being that the provisions of Section 192 were not applicable to the respondent-assessee inasmuch as the assessee as well as the foreign technicians were non-residents; the remuneration was paid outside India; the contract of employment was also outside India. The second ground was that the assessee was under a bone fide belief that the provisions of Section 192 were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue of levy of interest this Court has dismissed the appeal by answering the substantial question of law against the appellant Revenue in the following manner:- 3. The respondent/assessee - M/s. Babcock Power (Overseas Projects) Ltd. is a non-resident company incorporated in United Kingdom, which during the Assessment Years 1987-88 to 1989-90 had a project office in India for execution of a contract. The respondent to fulfil their contractual obligations had engaged foreign technicians who were deputed to work at the Indian project office. These employees were on pay roll of UK office of the respondent/assessee and salaries were also paid in foreign currency in their bank accounts abroad. These contracts of employment were duly appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the end of the relevant Financial Year till the date of actual payment i.e. the date of payment of self assessment tax, if payable by the employees, or after taking into consideration the advance tax and self assessment tax paid by the employees. No further interest, it has been directed, would be payable. The view taken by the Tribunal is in consonance with the decision of a Division Bench of this Court dated 21.12.2011 in ITA No.74/2003 titled Commissioner of Income Tax TDS vs. M/s. American Express Bank Ltd., in which it has been held as under: Insofar as the second question is concerned i.e., with regard to the interest payable under Section 201(1A) of the said Act, that is a mandatory provision, as already held by a Division ..... X X X X Extracts X X X X X X X X Extracts X X X X
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