2011 (1) TMI 1472

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....into assests and liabilities transfer agreements on 15th March, 2003 with M/s Intel Asia Electronics Inc., USA. All the assets were transferred in terms of the said agreements to the assessee on 1st April, 2003, Rs. 2,60,00,000 was the consideration. The assessee failed to deduct tax in accordance with s. 191/195 of the Act and remit the same to the Central Government. Therefore notice under ss. 201(1) and 201(1A) of the Act was issued. The assessee contested the said notice by contending that the sale of assets resulted in loss. Therefore no tax was liable to be paid and accordingly TDS was not deducted. The AO held that at the time of the payment of sale consideration, the assessee was bound to deduct the tax based on payments made to non....

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....case of CIT vs. Eli Lilly & Co. (India) (P) Ltd. & Ors. (2009) 223 CTR (SC) 20 : (2009) 21 DTR (SC) 74 : (2009) 312 ITR 225 (SC) at p. 251, on the scope of s. 201(1) and s. 201(1A) has held as under : "A perusal of s. 201(1) and s. 201(1A) shows that both these provisions are without prejudice to each other. It means that the provisions of both the subsections are to be considered independently without affecting the rights mentioned in either of the sub-sections. Further, interest under s. 201(1A) is a compensatory measure for withholding the tax which ought to have gone to the exchequer. The levy of interest is mandatory and the absence of liability for tax will not dilute the default. The liability of deducting tax at source is in the n....

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.... is hereby declared that if any person including the principal officer of a company- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-s. (17) of s. 192, being an employer, does not deduct, or after so deducting fails to pay, or does not pay, the whole or any part of the tax, as required by or under this Act, and where the assessee has also failed to pay such tax directly, then such person shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default within the meaning of sub-s. (1) of s. 201, in respect of such tax." From the aforesaid judgment and the Explanation to s. 191, it is clear that once the payee acknowledges the receipt ....