2008 (10) TMI 339

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... K. Sreedhar Rao J.- The respondent (insurance company), pursuant to the award made under the Motor Vehicles Act, has paid compensation to the victim of motor vehicle accident. The award amount consisted of the compensation and interest liability. 2. The provisions of section 194A(3)(ix) mandates that when the respondent pays interest liability more than Rs. 50,000, it should deduct tax at sou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aside, the rest of the order was confirmed. The respondent was permitted under the order to split and spread over the interest liability for each of the assessment years. The Revenue aggrieved by the order of the Tribunal in denying the interest has filed the appeal.  The respondent has not preferred any appeal against the order to the extent adverse to its interest. 5. In the above appeal....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ay interest on the undeducted TDS amount since the said liability is in the nature of penalty. In this regard, the Tribunal relied upon the decision of this court in Mittal Steel Ltd. v. Asst. CIT [1999] 240 ITR 707 (Karn). 7. In Mittal Steel Ltd.'s case [1999] 240 ITR 707 (Karn), the proviso to section 201 was under consideration. The said proviso empowers the levy of penalty if the TDS deduct....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rightly directed that the interest paid above Rs. 50,000 is to be split and spread over the period from the date interest is directed to be paid till its payment. If the spread over is given in majority of cases, the respondent may not incur liability to pay any TDS. In the event, the respondent remits the TDS amount as directed by the Tribunal, the Revenue is directed to hold suo motu enquiry by ....