9911796707
TMI Blog2003 (12) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was Chief Agricultural Officer, who had made the payments to the contractors namely, M/s Unitech Engineers, Pathankot and M/s Competent Engineers, Pathankot, in respect of installation of tubewell pump sets, etc. While making these payments, the assessee had not deducted tax at source under s. 194C of the IT Act, 1961 and when the default was noted by the ITO, TDS Circle, Amritsar, he issued a letter, in response to which the assessee agreed that no deduction of tax at source was made by his office on the payments made to the contractors. The ITO, TDS Circle, Amritsar, raised a demand of Rs. 1,55,196 @ 2 per cent on gross payment of Rs. 77,59,827 in consolidated form of the above-referred years. In the first appeal, it was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment years under consideration when the taxes to the extent of Rs. 1,03,000 (representing only total amount of income-tax paid by the contractor and not the interest paid under ss. 234A, 234B and 234C) had already been paid by the recipient contractor. Accordingly, assessment year-wise shortfall (TDS due minus only income-tax paid under s. 140A) was arrived at as under: Asst. yr. Total contract payments made to M/s. Competent Engineers and Unitech Engineers, Pr. Sh. Rajesh Verma, HUF (Karta) TDS due 2 per cent Less income-tax paid under s. 140A based on returns processed as per assessment record Shortfall if any 1996-97 12,47,094 24,942 16,000 8,942 1997-98 3,71,578 7,432 500 6,932 1998-99 38,19,925 76,339 56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erns were represented by Sh. Rajesh Verma, HUF. The AO in his report to the first appellate authority had made it clear that the said payments were included by Sh. Rajesh Verma, HUF in its business receipts and the tax was paid under s. 140A and the returns so filed were duly processed as per assessment record. These facts point out that the tax due on the contract payments was rightly recovered from the contractor, which amounted to Rs. 1,03,000. 2.4 The provisions concerning deduction of tax at source were introduced by keeping into mind the fact that the income should not go tax free. There are various methods provided in the Act for the recovery of tax which, inter alia, includes payment of advance tax, self-assessment tax and deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his shortfall from the assessee in question as against no tax due. The deduction of tax at source is different from tax on total income. Any amount of TDS is liable to be adjusted against the actual demand. Since the assessments of the recipient (contractors) have been finalized and there remains no tax liability as per Revenue's own version, we are of the considered opinion that no recovery can be made from the assessee in this regard. These four appeals are, therefore, allowed. 2.5. In the result, all these four appeals are allowed. 3. ITA Nos. 6 to 9/ASR/2003 These four appeals relate to charging of interest under s. 201(1A) in respect of four assessment years under consideration. Pursuant to the order passed by the CIT(A) under s. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. The learned Departmental Representative relied on the case of CIT vs. Dhanalakshmy Weaving Works (2000) 160 CTR (Ker) 374 : (2000) 245 ITR 13 (Ker) to contend that the levy of interest under s. 201(1A) was mandatory. 3.3. We have considered the rival submissions in the light of material placed before us and the precedents relied upon. Insofar as the contention of the assessee regarding non-charging of interest under s. 201(1A), we find that it is not acceptable. Though in the foregoing paras, we have held the assessee to be not in default but insofar as the charging of interest is concerned, the same is governed by sub-s. (1A) of the s. 201 which provides that "without prejudice to the provisions of sub-s. (1), if any such person, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01(1A). For the foregoing reasons, we hold the assessee liable to interest inspite of the fact that no liability remains under s. 201(1). 3.4. Now we proceed with the determination of the amount of interest chargeable under s. 201(1A). The answer to this question can be easily found in sub-s. (1A) itself which provides that interest at the specified rate shall be charged 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. Since the necessary information is not coming up from the orders of the authorities below, we are of the considered opinion that it would be in the interest of justice, if the impugned order is set aside and the matter is restored to the file of the AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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