TMI Blog2017 (11) TMI 1717X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax was duly paid and that too at the time when it had become due, it would not be proper on the part of the Revenue to levy any interest under Section 201(1A) of the Act especially when Ravi Builder had paid more amount of tax by way of advance tax than what was payable by it. As the amount of tax payable by the contractor had already been paid by it and that too in excess of the amount which was payable by way of advance tax, in our opinion, the Tribunal was absolutely right in holding that the tax paid by the contractor in its own case, by way of advance tax and self-assessment tax, should be deducted from the gross tax that the assessee should have deducted under Section 194C while computing interest chargeable under Section 201( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein. In DBITA No. 27/2016 i) Whether on the facts and circumstances of the case and in law the Tribunal as well as CIT(A) was justified in deleting the levy of interest u/s 201(1A) of the Act of ₹ 26,33,895/- as the assessee failed to deduct tax at source as mandatorily required u/s 195 of the Act and wrongly gave benefit of the orders u/s 195/197 of the Act, beyond the amount and period of their validity? 4. Counsel for the appellant has taken us to the order of CIT(A) as well as the Tribunal. He contended that the Tribunal has seriously committed an error in passing the order. He has relied upon the decision of Delhi High Court in case of Commissioner of Income Tax vs. American Express Bank Ltd. (2012) 204 taxman 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 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, therefore, no question of waiver of such interest on the basis that the default was not intentional or on any other basis. (See Bennet Coleman Co. Ltd. v. V.P. Damle, Third ITO, MANU/MH/0083/1984 : [1986] 157 ITR 812 (Bom.) and CIT v. Prem Nath Motors (P). Ltd., MANU/DE/1938/2001 : [2002] 120 Taxman 584 (Delhi). Therefore, the second question is also answered in favour of the Revenue and against the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable cause for non-payment of taxes deducted under s. 192 of the Act. We may add here that in the case of Bennet Coleman Co. Ltd. vs. V. P. Damle, Third ITO MANU/MH/0083/1984 : [1986]157ITR812(Bom), a learned single judge of this Court has taken the same view on the interpretation of s. 201(1A) which we have taken herein. 4.2. He has also relied upon the decision of Gauhati High Court in case of Commissioner of Income Tax vs. Assam Small Industries Development Corporation Ltd. (1196) 219 ITR 0324 wherein it has been held as under:- 8. On going through the provision of Section 201(1A) it is clear that interest has to be paid for delayed payment of tax. The section does not impose any restriction unlike penalty. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ravi Builder not paid tax on the amount which it had received from the assessee, the Revenue could surely saddle the assessee with the liability of payment of interest under the provisions of Section 201(1A) of the Act. But in the instant case, as Ravi Builder had already paid the tax on the income, in our opinion, there was no question of levying any interest on the assessee as the amount which was payable to the Revenue had been duly paid. In other words, we may say that the liability of the assessee-society to make deduction at source and pay the tax to the Revenue is not independent of the liability of the contractor or Ravi Builder to pay the tax. If assessment in relation to income of Ravi Builder, i.e., the contractor, had become fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of non-deduction of tax at source by the assessee. From the legal provisions discussed hereinabove, it is crystal clear that in the instant case Ravi Builder, on whose behalf the tax was to be paid by the assessee, had duly paid its tax and was not required to pay any tax to the Revenue in respect of the income earned by it from the assessee. If the tax was duly paid and that too at the time when it had become due, it would not be proper on the part of the Revenue to levy any interest under Section 201(1A) of the Act especially when Ravi Builder had paid more amount of tax by way of advance tax than what was payable by it. As the amount of tax payable by the contractor had already been paid by it and that too in excess of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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