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The case pertains to the levy of interest u/s 234C for failure on the part of the payer to deduct tax deducted at source (TDS) u/ss 196D and 194LD. The key points are: Tax due on returned income means the tax chargeable on the total income declared in the return, reduced by the TDS amount. The advance tax is reduced by the TDS amount, meaning the assessee is not required to pay advance tax to that extent. Since the payers failed to deduct TDS, the assessee paid the full tax. Therefore, interest u/s 234C cannot be levied on the assessee for the payers' fault. The Bombay High Court in Ngc Network Asia LLC held that when the payer fails to deduct TDS, no interest u/s 234B can be imposed on the payee assessee. It is not a case of deferment in payment of advance tax u/s 234C since the assessee discharged the tax liability. Thus, the Appellate Tribunal directed the Assessing Officer to delete the impugned addition of interest u/s 234C, deciding in favor of the assessee.
The case pertains to the levy of interest u/s 234C for failure on the part of the payer to deduct tax deducted at source (TDS) u/ss 196D and 194LD. The key points are: Tax due on returned income means the tax chargeable on the total income declared in the return, reduced by the TDS amount. The advance tax is reduced by the TDS amount, meaning the assessee is not required to pay advance tax to that extent. Since the payers failed to deduct TDS, the assessee paid the full tax. Therefore, interest u/s 234C cannot be levied on the assessee for the payers' fault. The Bombay High Court in Ngc Network Asia LLC held that when the payer fails to deduct TDS, no interest u/s 234B can be imposed on the payee assessee. It is not a case of deferment in payment of advance tax u/s 234C since the assessee discharged the tax liability. Thus, the Appellate Tribunal directed the Assessing Officer to delete the impugned addition of interest u/s 234C, deciding in favor of the assessee.
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