Interest under section 201(1A) runs until actual tax payment, and section 231 limitation does not curtail the levy.

Interest under section 201(1A) is chargeable as simple interest from the date tax was deductible until the date of actual payment. The expression "actually paid" was construed to mean the real payment of the tax due, and the limitation concept in section 231 was held irrelevant to the levy of this interest. The period for charging interest therefore runs up to actual discharge of the tax liability, and the section 231 restriction was rejected.

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Issues: Whether interest under section 201(1A) of the Income-tax Act, 1961, for failure to deduct or pay tax at source is chargeable from the date on which the tax was deductible until the date on which the tax is actually paid, and whether the limitation concept in section 231 affects the period for which such interest can be levied.

Analysis: Section 201(1A) expressly provides for simple interest from the date on which the tax was deductible to the date on which the tax is actually paid. The expression "actually paid" was held to mean the actual payment of the due tax, and the limitation contemplated by section 231 for recovery proceedings was held to be irrelevant to the levy of interest under section 201(1A).

Conclusion: Interest under section 201(1A) is chargeable from the date the tax was deductible up to the date of actual payment, and the restriction based on section 231 was disapproved.

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