TaxTMI 
TaxTMI 
2000 (9) TMI 48
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....case, the Tribunal was justified in law in holding that the company was liable to deduct tax from dividends under section 194 of the Income-tax Act when the dividend warrants were sent out to the shareholders and not on the dates of issue put on the dividend warrants ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the Income-tax Officer to recalculate the interest levied under section 201(1A) from the date the dividend warrants were actually sent out to the shareholders and not from the date(s) of issue put on the dividend warrants ?" The factual position which is almost undisputed is as follows : The assessee is a public limited company. It declared dividends of Rs. 1,61,3....
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....ral Government within the specified period of 30 days as provided under rule 30 of the Income-tax Rules, 1962 (in short "the Rules"). Accordingly, it was held that the assessee was liable to pay interest under section 201(1A) at 12 per cent. per annum and this interest was to be calculated from the dates on which the dividends were declared. His case was that the relevant date is the date when the dividend warrants were prepared. The assessee filed appeals before the Appellate Assistant Commissioner (in short "the AAC") and took the stand that the dates on the dividend warrants should not be taken to be the date, and it should be the date of despatch. The Appellate Assistant Commissioner did not accept the stand of the assessee and observed....
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....he declaration and payment of dividends (including dividends on preference shares) within India, shall, before making any payment in cash or before issuing any cheque or warrant in respect of any dividend or before making any distribution or payment to a shareholder of any dividend within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2, deduct from the amount of such dividend, income-tax at the rates in force : Provided that . . ." Section 194 lays down that the principal officer of a company shall before making any payment in cash or before issuing any cheque or warrant in respect of any dividend deduct therefrom, the amount of income-tax at the rate applic....