TMI Blog1998 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, Penalty was therefore levied under section 201(1A) of the Act by the Income-tax Officer in the sum of Rs. 1,71,500 for the assessment year 1983-84 and in the sum of Rs. 1,17,406 for the assessment year 1984-85. The assessee unsuccessfully appealed to the Commissioner of Income tax. On further appeal to the Tribunal, the Tribunal accepted the assessee's claim that it had no liability to deduct tax at source as the recipients had filed loss returns or had claimed refund of the tax on the ground that the advance tax paid was in excess of the amount of tax due. Aggrieved by that order, the Revenue has secured these references of the following question of law: "Whether, on the facts and in the circumstances of the case, the Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contingent upon the assessee's valuation of the likely liability for tax of the recipient of interest payment. It is only in cases where the recipients of interest is in a position to file any certificate or declaration to show that the person's total income is below the taxable limit that the tax on the interest payment made to such person is not to be deducted. In all other cases, it must be deducted as required under section 195 of the Act. It is not the convenience of the assessee, and its assessment of the likely extent of the liability for payment of interest of the recipients of the interest, that determines the extent of the assessee's obligation to deduct tax at source on the interest paid by it. The provision requiring deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal was clearly in error in accepting the case pleaded for the assessee that it had no duty to pay tax at source solely on the ground that one of its sister concerns had filed a loss return and the other sister concern had claimed refund. The concern which had filed the loss return was at the time of assessment found liable to pay tax and the concern which had claimed refund at the time of original assessment was found not entitled to the refund, though such refund was directed in appeal. The assessee had a duty to deduct tax at source. It apparently did not do so as payments were made to its own sister concerns and it did not wish to part with any part of that interest to the Revenue at that point of time. That however cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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