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2016 (6) TMI 887

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..... th appeals by different assessees are directed against different orders of ld. CIT(Appeals)-43 New Delhi dated 26.08.2015 for assessment year 2009-10 challenging the order under section 201(1A) of the Income Tax Act. 2. I have heard ld. DR, perused the findings of authorities below and considered the material on record. The assessee did not appear despite service of the notice. The written submission filed by assessee on record has been considered. It is stated that issue is same in both the appeals and ld. DR argued mainly in the case of assessee Shri Tarsem Singh Saini. Therefore, for the purpose of disposal of both the appeals, same is decided as under. ITA 810/2015 U ( Shri Tarsem Singh Saini ) 3. Briefly, the facts of the case are that in the year under consideration, assessee jointly alongwith Smt. Paramjit Kaur, wife of Shri Tarsem Singh Saini, purchased property bearing No. 2178, Sector 21-C, Chandigarh for a total purchase consideration of ₹ 1.35 Crores from non residents i.e. S/Shri Krishan Lal, Sohan Lal and Mohan Lal, residents of U.K. vide Sale Deed dated 23.05.2008. The Assessing Officer noted provisions of Section 195 and 201 of the Income Tax Act in t .....

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..... assessee. The assessee is not in default and relied upon certain decisions in support of the above contention. The ld. CIT(Appeals), however, did not accept contention of the assessee and dismissed appeal of the assessee. The findings of ld. CIT(Appeals) in para 5.1 to 5.3 of the impugned order are reproduced as under : 5.1 I have considered the submissions of the counsel. I have perused the order available on record. I have heard the counsel. The action of the Assessing Officer is summed up, in his order, towards the end which is as follows :- Hindustan, Coca Cola. vs. CIT (2007) 178 Taxman 355 (SC) In this case, the Hon'ble Supreme Court has held that no demand visualized under section 201(1) of the Income-lax ACL , 1962 should be enforced after the tax deductor has satisfied the officer-in-charqe of TDS, that taxes due have been paid by the deductee-assessee. The Hon'ble Court further held that this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the- deductee-assessee or the liability for penalty under section 271C of the Income-tax Act, 1961. Hence, it is clear that the assessee .....

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..... erest u/s 201(1A) amounting to ₹ 1,89,302/-. In view of the decision of the Hon'ble ITAT, Mumbai, Bench-C in the case of Raymond limited vs. Deputy Commissioner of Income-tax (2003) 86 JTD 791 (MUM), 'since the liability to tax is because of the operation of the statute itself, therefore, the demand is to be paid immediately. Issue demand notice. Penalty proceedings u/s 271C of the Income-tax Act, 1961 for failure to deduct tax at source are being referred to the Add/. Director of Income-tax. International Taxation. Chandigarh. The appellant has raised a plea that the payee/deductee has filed the return and has already borne taxes u/s 234A, 234B and 234C. It is noted that the interest u/s. 201(1 A) is compensatory and has been levied as a compensation only. The appellant's plea that the same is penal in nature is unfounded. There is no double charge of interest u/s 201(1A), as Section 234A. 234B and 234C operate in separate spheres. There might not have been any loss to revenue in terms of tax, but revenue needs to be compensated for the delay in payment to the exchequer. This is mandated as per statute. 5.3 Further, the interest paid by the ded .....

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..... es by the seller. Therefore, appeal of the assessee may be dismissed. 8. I have considered rival submissions and material on record. The facts noted in the findings of ld. CIT(Appeals) have not been disputed by the assessee in any manner. Hon'ble Supreme Court in the case of Hindustan Coco Cola Beverage P. Ltd. (supra) while referring to the Board's Circular observed that No demand visualize under section 201 ( 1 ) of the Income Tax Act should be enforced afte r the tax deductor has satisfied to Officr-in-charge of the TDS that taxes due have been paid by the deductee assessee. However , this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee assessee or the liability for penalty under section 271 C of the Income Tax Act 9. Hon'ble Supreme Court in the case of CIT V Elililly Co. (India) P. Ltd. 312 ITR 225 (S.C) held as under : The levy of interest under section 201(1A) is mandatory and the absence of liability for tax will not dilute the default. The liability of deducting tax at source is in the nature of a vicarious liability, which presupposes existence of primary liabili .....

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