1998 (12) TMI 18

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....8,479. Tax at source was not deducted on these amounts, Penalty was therefore levied under section 201(1A) of the Act by the Income-tax Officer in the sum of Rs. 1,71,500 for the assessment year 1983-84 and in the sum of Rs. 1,17,406 for the assessment year 1984-85. The assessee unsuccessfully appealed to the Commissioner of Income tax. On further appeal to the Tribunal, the Tribunal accepted the assessee's claim that it had no liability to deduct tax at source as the recipients had filed loss returns or had claimed refund of the tax on the ground that the advance tax paid was in excess of the amount of tax due. Aggrieved by that order, the Revenue has secured these references of the following question of law: "Whether, on the fact....

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....nterest payment does not make the duty to effect deduction contingent upon the assessee's valuation of the likely liability for tax of the recipient of interest payment. It is only in cases where the recipients of interest is in a position to file any certificate or declaration to show that the person's total income is below the taxable limit that the tax on the interest payment made to such person is not to be deducted. In all other cases, it must be deducted as required under section 195 of the Act. It is not the convenience of the assessee, and its assessment of the likely extent of the liability for payment of interest of the recipients of the interest, that determines the extent of the assessee's obligation to deduct tax at source o....