TMI Blog1982 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... sury which the assessee had deducted from the salaries paid to its employees. He, therefore, proceeded to calculate interest under section 201(1A) from the date on which the salaries were payable to the employees to the date on which the tax was actually paid by the assessee into the Government treasury, on each occasion, and demanded the same from the assessee. 3. The assessee appealed before the Commissioner (Appeals) in respect of the interest levied by the ITO for the years under consideration. The main ground on which the assessee objected to the levy was that it was in extreme financial difficulties and, therefore, was not in a position to pay the taxes into the Government treasury as and when due under section 192 of the Act. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of section 194A of the Act, whereunder any person, who is responsible for paying to a resident any income by way of interest other than income chargeable under the head 'interest on securities' is obliged at the time of credit of such amount to the account of the payee or at the time of payment thereof in cash or in any other manner, deduct income-tax thereon at the rates in force. According to the learned counsel, under section 192, the tax has to be deducted at the time of actual payment, whereas under section 194A, the tax has to be deducted even when the amount of interest is credited to the payee's account. In the absence of such a specific provision, the ITO cannot proceed to levy interest from the date on which the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Bom.) of 1980 relied upon by the assessee, to our mind, does not clearly support the assessee's case that the reasonableness of the causes leading to the delayed payment of the taxes into the Government treasury are justiciable. Just because an appeal is provided against an order under section 201(1A), it does not mean that the appellate authority can go into the reasonableness of the causes. All that the appellate authorities can look into is whether the circumstances prerequisite for the levy existed and whether the quantum of the levy was in order. The assessee's appeals on this ground are rejected. 7. In our opinion, however, the assessee is entitled to succeed on the alternative plea that the interest should be levied from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax has to be deducted when the actual salary is paid to the employee. 9. Our view in this respect is also supported by the Tribunal Calcutta Bench 'B' decision in the case of Grindlays Bank Ltd. v. ITO [1982] 1 ITD 1100. In the aforesaid decision dated 4-9-1981, the Calcutta Bench held that the words used in sections 193, 194B, 194BB and 195 of the Act are 'at the time of payment' whereas those used in cognate sections like sections 194C and 194D of the Act are 'at the time of credit'. Thus, the difference between credit and actual payment was alive to the minds of the Legislature, and word 'payment' was intentionally used in section 195, for at least one reason, that in the case of non-residents, the mere placing of money at the credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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