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TMI Blog2017 (10) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... eals are clubbed and heard together and decided in common order for the sake of convenience as under: 2. All the grounds of appeal are related to the levy of interest u/s 201(1A) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). A survey by TDS wing of Income Tax Department u/s 133A of the Act was conducted in this case on 16.10.2011 and found that the assessee had made the payments of Rs. 88,43,193/- for the period ending 31.3.2013 and Rs. 87,04,620/- for the period from 1.4.2013 to 31.3.2013 but not deducted the TDS on the above payments. Therefore, the Assessing Officer (A.O.) held that the assessee required to deduct the tax at source u/s 194J of the Act and accordingly treated the assessee as assessee in default a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn. The deductees filed returns of income admitting the nil return. Even after admitting the receipts paid by the assessee, the income in the hands of the deductee was nil resulting to no tax liability. The interest u/s 201(1A) of the Act is compensatory in nature and in the deductee's case, since there was no advance tax liability thus the interest under section 201(1A) does not attract. Since there was no loss of revenue in the deductee's case the interest chargeable under section 201(1A), which is compensatory in nature is not applicable to the assessee. The Ld. A.R. referring to the provisions of section 201 & 201(1A) of the Act argued that after the amendment of Act by insertion of proviso to section 201 of the Act, once the deductee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the Board circular No.2 of 2014 with regard to the non-deduction of tax at source in the case of non-residents particularly with reference to section 195 of the Act. There is no similar instruction in the case of residents. Therefore, the case law relied upon by the Ld. A.R. is not applicable in the assessee's case. Further, the Ld. D.R. argued that the decisions of ITAT Cochin bench and the ITAT Lucknow bench are related to the assessment years 2003-04 to 2007-08. A proviso has been inserted in the Income Tax Act to section 201(1A) of the Act enabling the department to levy interest u/s 201(1A) of the Act from the date of such the tax is deductible to the date of furnishing the return of income by such resident without relating to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the deductee's income was below taxable limit and need not pay any advance tax, the Ld. A.R. contended that there is no loss to revenue and interest need not be charged u/s 201(1A) of the Act. The Ld. A.R. taken the support of the decision of ITAT Cochin Bench in the case of Thomas Muthoot Vs. DCIT (supra) and the decision of Sahara India Commercial Corporation Limited reported in (2015) 169 TTJ 0292 Lucknow bench. The Ld. A.R. further argued that the decision of ITAT Lucknow bench was confirmed by the Hon'ble High Court of Allahabad. The Ld. A.R. also taken the support of the decision of this Tribunal in the case of Manne Rajesh Kumar in ITA No.40/Vizag/2017 dated 6.9.2017 and argued that when the deductee has no taxable income, the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, And such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200:] [Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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