Interest charged on short deduction of TDS

[Arun Newalkar]

Kindly clarify whether Interest u/s 201(1A) of the Act is not chargable to the deductor in light of the following cases: Bennett Coleman & Co Ltd Vs 1TO [1984 (11) TMI 58 - BOMBAY High Court], ICICI Bank Limited vs. Dy. CIT [2014 (1) TMI 706 - ITAT LUCKNOW], Uttar Pradesh Financial Corporation Versus ITO. (TDS) -5(2), Kanpur etc.

In other words, is the company liable to pay interest charged on short deduction of TDS for earlier years without any evidence of the fact that the income on which TDS was deducted has not been taxed so far in the hands of the recipient. What stand should the deductor company take

AI Summary

Interest under section 201(1A) may be charged on short TDS deduction unless recipient has paid tax.
Where the recipient has not paid the tax on income, the deductor is liable to pay interest under section 201(1A) from the date the tax was due to the date of deduction; if the recipient proves payment of the differential tax, the deductor may contend that interest should be waived.