TMI Blog2001 (8) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the amount paid by way of interest other than interest on securities under section 194A for the period ending on 31-3-1997. The assessee actually deposited the said sum to the credit of the Central Government on 27-6-1997 and as such, there was a delay of 27 days in depositing the amount to the Central Government A/C. For failure on the part of the assessee to pay the amount of tax deducted at source under sections 1963 and 194A within the time allowed under the Statute, the Assessing Officer had initiated on 18-51999 penalty proceedings under section 221 of the Act asking the assessee as to why penalty should not be levied fixing the case on 28-5-1999. 5. In the course of hearing of the aforesaid penalty proceedings, the assessee had shown the following reasons for the delay in depositing the amount of tax deducted under sections 193 and 194A : (a) that the assessee was passing through financial crisis for last few years as a result of losses suffered by the assessee, (b) that the assessee had paid the entire amount of tax deducted at source without any notice or remainder from the Income-tax Department; (c) that the assessee had also paid interest of its own under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to in section 194A by crediting such amount to the accounts of the payees in the month of March, 1997 and, as such, the assessee was under obligation to pay the amount so deducted to "the credit of the Central Government within 31-5-1997 as envisaged under the provision of Rule 30 of the Rules read with section 200 of the Act but the assessee had failed to deposit the same within the stipulated time as the assessee had paid the amount so deducted on 27-6-1997. 9. Failure to make payment of the deducted amount of tax amounts to contumacious conduct on the part of the person liable to pay the deducted tax and penal consequences as enumerated in section 201 of the Act would follow for such default. Section 201 of the Act enacts a threefold punishment for defaulting in making the payment of the sum deducted at source to the credit of the Central Government in the manner as prescribed in section 200 of the Act/Rule 30 of the Rules. Firstly, without prejudice to any other consequences which the assessee may incur, the assessee shall be deemed to be an assessee in default in respect of the tax deducted; secondly, any such assessee is liable to pay interest at the specified rate on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 221 of the Act unless good and sufficient reasons for delay in depositing the tax deducted by it was shown by the assessee. 13. As regards the existence of good and sufficient reasons for delay in depositing the tax deducted by the assessee, it was contended by learned counsel for the assessee that the assessee, on its own, paid the interest leviable under section 201 (1A). In our considered opinion, this submission of the assessee is of no assistance to the assessee as it is clear whether the assessee had paid the interest or not is immaterial in view of the language of sections 201(1) and 201(1A) which are very categorical to state that payment of interest under section 201(1A) is without prejudice to the provisions of sub-section (1) of section 201. The Hon'ble Calcutta High Court in the case of Jubilee Investments Industries Ltd. v. Asstt. CIT [1999] 238 ITR 648 has laid down that whether the assessee has paid interest or not was immaterial and when assessee was found in default in depositing the amount of TDS within the time limit prescribed, the assessee was liable to pay the interest as well as the penalty. In this view of the matter, considering the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 'The Assistant Commissioner has rightly pointed out that once the TDS is deducted from the income of somebody, the assessee is merely a custodian of the TDS amount. He cannot touch the amount. That amount is to be deposited within the time prescribed in the Central Government Account and any loss or profit in the business of the assessee has nothing to do with deposit of the TDS amount.' 15. The third argument of learned counsel of the assessee that the assessee was passing through financial crisis for last few years as a result of loss suffered by the assessee is also to be rejected following the decision of the jurisdictional High Court in the case of Jubilee Investments Industries Ltd. wherein it is held that any loss or profit in business of the assessee has nothing to do with the deposit of the TDS amount. In support of his contention, the assessee's counsel has drawn our attention to the decision of the Tribunal, Jodhpur Bench in the case of CIT v. Jugalkishore Ganeshilal [2000] 109 Taxman 284 wherein it was held as under : "The Assessing Officer had not properly considered elaborate submissions made on behalf of the assessee while imposing the said penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the amount referred to in sections 193 and 194A lay crediting such amount to the account of the payee gets more time of two months from the end of the month in which such credit is made for making the payment of TDS amount to the account of the Central Government in comparison to the person making the payment of above referred amount in cash or by cheque or draft or any other mode where the time allowed for making payment of the sum deducted at source is only one week from the end of the month in which the deduction is made. It, therefore, implied that the Legislature had already taken care of these contingencies of making payment of amount by crediting the same to the account of the payee by providing larger period of 2 months for making the payment of sum deducted at source to the Central Government. Account in comparison to other cases. Thus, the assessee has been given larger period of two months for making the payment of TDS amount because of mode of payment by crediting the same to the account of the payee and as such, the mode of payment by crediting the amount to the account of the payee cannot be considered to be sufficient and reasonable cause for not making the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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