Interest on delayed TDS deposit required fresh computation after assessee challenged the calculation and adjustment of excess payment.

Interest under section 201(1A) for delayed TDS deposit was upheld in principle, but the computation required fresh verification because the assessee disputed the rate and calculation and sought adjustment of excess deposit for an earlier period. The wider controversy on the applicability of sections 194J and 194C did not survive in this appeal. The Assessing Officer was directed to re-examine the interest working after giving the assessee an opportunity of hearing and to pass a fresh order in accordance with law.

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Issues: Whether the levy of interest under section 201(1A) was correctly computed and required reconsideration in light of the assessee's objection to the rate and calculation.

Analysis: The appeal arose from an order sustaining interest for delayed deposit of tax deducted at source. The assessee questioned the computation of interest under section 201(1A) and sought adjustment of the excess amount stated to have been deposited for an earlier period against the correct liability. The substantive dispute relating to the applicability of sections 194J and 194C did not survive for adjudication in this appeal, and the only live controversy was the correctness of the interest computation. The matter required verification of the calculation in accordance with law after affording opportunity of hearing.

Conclusion: The levy of interest under section 201(1A) was not interfered with in principle, but the Assessing Officer was directed to re-examine the computation and pass a fresh order in accordance with law. The issue was decided partly in favour of the assessee.

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