2017 (12) TMI 523

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.... has challenged correctness of the order dated 1st April 2015 passed by the CIT(A)-4, Ahmedabad upholding the interest demand under section 201(1A) of the Income-tax Act, 1961 for the assessment year 2014-15. Grievance of the assessee is that the CIT(A) erred in upholding this levy of interest of Rs. 2,78,607/-. 2. The issue in appeal lies in a very narrow compass of material facts. The assessee ....

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....th interest on 08.10.2013 and as per General Clause Act, the date from is to be excluded for the purpose of computation of period for charging interest. The AO has levied interest for two months. Section 201(1A) clearly states, if a person after deducting tax fails to pay the tax it shall be liable to pay simple interest at one and one-half percent for every month or part of a month on the amount ....

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....ound is partly allowed." 3. The assessee is not satisfied and is in further appeal before us. 4. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. 5. We find that the time limit for depositing the tax deducted at source under section 194A, as set out in rule 30(2)(b) - which applies in the presen....

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....tion of levy of interest for the second month can arise only if the period of time between the date on which tax was deducted and the date on which tax was paid to the Government exceeds one month. We, therefore, direct the Assessing Officer to recompute the levy of interest under section 201(1A) accordingly. 6. As per learned counsel's plea that it is too strong a punishment to levy interest for....