TMI Blog2000 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company was liable to deduct tax from dividends under section 194 of the Income-tax Act when the dividend warrants were sent out to the shareholders and not on the dates of issue put on the dividend warrants ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the Income-tax Officer to recalculate the interest levied under section 201(1A) from the date the dividend warrants were actually sent out to the shareholders and not from the date(s) of issue put on the dividend warrants ?" The factual position which is almost undisputed is as follows : The assessee is a public limited company. It declared dividends of Rs. 1,61,354, Rs. 1,71,422 and Rs. 2,05,836 on December 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 47,296 19-3-1974 14,138 10-3-1976 33,124 16-3-1975 33 ------------------------------------------------------------------------------ The Income-tax Officer was of the view that tax deducted at source was not deposited to the credit of the Central Government within the specified period of 30 days as provided under rule 30 of the Income-tax Rules, 1962 (in short "the Rules"). Accordingly, it was held that the assessee was liable to pay interest under section 201(1A) at 12 per cent. per annum and this interest was to be calculated from the dates on which the dividends were dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on does not deduct or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at twelve per, cent. per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid." "194. Dividends.---The principal officer of an Indian company or a company which has made the prescribed arrangements for the declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment in cash or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to a shareholder of any dividend within the meaning of sub-clause (a) or sub-clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch tax from the date on which such tax was deductible to the date on which such tax was actually paid. As indicated above, in terms of section 194 of the Act, the relevant date is the date on which the dividend warrant is issued. While dealing with section 205(5) of the Companies Act, 1956 (in short "the Companies Act"), the apex court in Hanuman Prasad Gupta v. Hiralal [1970] 40 Comp Cas 1058, had occasion to consider as to when the dividend warrant can be said to be issued. It was observed that once a dividend warrant is posted to the registered address of the shareholder, the dividend is deemed to have been paid within the meaning of section 205. The section, according to the apex court, makes the failure to post within the prescribed p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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