TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 726
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....ficate u/s 197 of the Income Tax Act, 1961 issued by the DCIT, Circle II (4), Bangalore had named Controller of Defense Accounts (DAD), Bangalore at sl. No.50 and AO (DAD), Lucknow is a sub office of the CDA, Bangalore and hence the certificate was applicable to AO (DAD), Lucknow. 3. Because in the past also the AO (DAD), Lucknow was acting on similar certificate(s) u/s 197 of the Income Tax Act, 1961 issued by the assessing officers and no objection was ever raised by the Income Tax Department. 4. Because the CDA, Bangalore makes payments to HAL only through its sub offices like AO (DAD), Lucknow and hence the hyper technical view taken by the lower authorities would render the certificate u/s 197 issued by another authority of the same department as redundant/ infructuous. 5. Because the learned DCIT, Circle II(4), Bangalore has not mentioned any TAN in the certificate in lower deduction or non-deduction of tax at source as the practice of mentioning the TAN (in lower deduction or non-deduction of tax at source Certificate) has been started only from Financial Year 2010-11 after issue of Instruction No. 4 of 2010 dated 25-05-2010 by the CBDT on proper computerization in the TD....
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....1 issued by the DCIT, Circle II (4), Bangalore had named Controller of Defense Accounts (DAD), Bangalore at sl. No.50 and AO (DAD), Lucknow is a sub office of the CDA, Bangalore and hence the certificate was applicable to AO (DAD), Lucknow. 3. Because in the past also the AO (DAD), Lucknow was acting on similar certificate(s) u/s 197 of the Income Tax Act, 1961 issued by the assessing officers and no objection was ever raised by the Income Tax Department. 4. Because the CDA, Bangalore makes payments to HAL only through its sub offices like AO (DAD), Lucknow and hence the hyper technical view taken by the lower authorities would render the certificate"- u/s 197 issued by another authority of the same department as redundant/ infructuous. 5. Because the learned DCIT, Circle II(4), Bangalore has not mentioned any TAN in the certificate as the practice of mentioning the TAN in lower deduction or non-deduction of tax at source Certificate has been started only from Financial Year 2010-11 after issue of Instruction No. 4 of 2010 dated 25-05- 2010 by the CBDT on proper computerization in the TDS module of the ITD system; and the certificate issued in an earlier year when the prevalent ....
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.... tax to the date on which liability has been discharged i.e. upto the date of filing of the return by the deductee. 4. The assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) re-examined the issue in detail in the light of various judgments referred to by the assessee and has noticed that while there is overall claim for refund, but there is short payment of advance tax in various quarters when considered with reference to the liability to deduct tax at source on various dates by the deductor and the actual dates of payments by way of advance tax by the deductee. He further observed that even if the tax due has been paid by the deductee, yet interest under section 201(1A) is mandatory and the same is liable to be paid from the date the tax was deductible at source till the date of payment by the payee by way of advance tax or any other mode for the respective quarter and not till the date of filing of the return as has been erroneously held by the Assessing Officer. The ld. CIT(A) accordingly directed the Assessing Officer to recompute the short deduction of TDS for various date of payments by the deductor to the deductee and charge interest under section 201(1A)....
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.... Court in the case of Hindustan Coca Cola Beverage Pvt. Ltd. reported in 293 ITR 226 in which following the CBDT Circular no. 275/201/95 dated 29.01.1997 it has been held that if tax due had been paid by the deductee, the tax should not be recovered from the deductor. Copy of acknowledgment of the return of income of Hindustan Aeronautics Ltd. claiming refund of ?121.14 crores filed on 30th September 2008 for A.Y. 2008-09 has also been filed. 3.1.2 I have considered the ground of appeal, the order of the Assessing Officer and the submissions made. As per the provision of section 197, the certificate for lower deduction has to be issued to the person responsible for paying the income. The certificate has to be issued as per the provisions of Rule 28(1), 28AA, 28AB, 29 and Form no. 13. As per sub-rule (3) of Rule 28AA, the certificate shall be valid only for the person named therein and as per sub-rule (4) of Rule 28AA, the certificate shall be issued direct to the person responsible for paying the income under advice to the applicant. Hence, as the person responsible for paying is A.O. (DAD), HAL, Lucknow, therefore, a certificate for lower deduction of tax issued to PCDA, Bangalor....
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....The learned Assessing Officer while levying interest has placed reliance on the decision of Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd. vs. Commissioner of Income-tax reported in (2007) 293 ITR 226 (SC). However, while calculating the interest the learned A. O. escaped that the interest is to be levied up to the date of filing of return by deductee which is 30-9-2008. Since the assessee has discharged the entire tax liability by way of advance tax and TDS, the liability stood discharged by 15 March and the date of filing of return for calculating interest upto 30-09-2008 is not at all relevant. 16. In any case as per the Supreme Court decision in Hindustan Coca Cola and CBDT Circular no. 275/201/95-IT(B), dated 29th January, 1997 it has been clearly laid down therein that "interest u/s 201(1 A) of the Act till the payment of taxes" will be applicable. In the last hearing your goodself had called for challans of payment of advance tax by the deductee. As directed the challans have been obtained from the deductee and are enclosed herewith. It will be noticed that tax far in excess of the short deduction has been paid by the deductee and for conveni....
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....penalty under section 271C. [Para 10] In the instant case, the assessee had paid the interest under section 201(1A) and there was no dispute that the tax due had been paid by 'P'. It was not disputed that the circular was applicable to the facts situation at hand. [Para 11] 3.3.2 It has been held in Bennet Coleman & Co. Ltd. v. V.P. Damle, Third ITO [1986] 157 1TR 812 (Bom.) that section 201(1A) makes the payment of simple interest mandatory. The payment of interest under that provision is not a penal provision. There is, therefore, no question of waiver of such interest on the basis that the default was not intentional or on any other basis. Similar view has been held in CIT v. Dhanalakshmy Weaving Works [2000] 245 ITR 13 (Ker.), CIT v. K.K. Engg. Co. [2001] 116 Taxman 390 (Ker.), CIT v. Assam Small Industries Development Corporation Ltd. [1996] 219 ITR 324/88 Taxman 1 (Gauhati), CIT v. Prem Nath Motors (P.) Ltd. [2002] 120 taxman 584 (Delhi). Further, it has been held in CIT v. Majestic Hotel Ltd. [2006] 155 Taxman 447 (Delhi) and CIT v. Munni Lal & Co. [2006] 157 Taxman 466 (Raj.) that the question whether the assessee had any bona fide belief or reasonable cause for n....
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....ductee as has been held by the Assessing Officer) after the assessee furnishes evidence for date wise payment of taxes by the deductee. The Assessing Officer is directed to recompute the interest under section 201(1A) of the l.T. Act, 1961 for the 2nd and 3rd Quarters accordingly and Ground no. 4 of the appeal is, therefore, partly allowed. 3.4 Grounds no. 5, 6 and 7 are general in nature and do not call for any separate adjudication. 4. In the result, the appeals for the 2IU1 and 3rd Quarters are partly allowed. 5. A. No. 11/Dy.CIT/TDS/Lko /CIT(A)-III/Lko/ll-12, A.Y.:2008-09 (4th Quarter): As regards the appeal for the 4th Quarter, the authorised representatives relied on the submissions made in the appeals of the 2nd and 3rd Quarters and also requested for relief on account of short deduction. The appellant was found to have filed a rectification application also against the order u/s 201(1)/201(1A) which had been rejected vide order dated NIL by the Assessing Officer and a certified copy of which dated 19.07.2011 had been filed with the appeal memo in the appeal filed against the order u/s 154. As the appellant has already filed an appeal against the order u/s 154, the appea....