1984 (11) TMI 58

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....rve Bank within the period prescribed under rule 30(1)(b) of the Income-tax Rules, 1962. The petitioners had, therefore, become assessees in default in terms of section 201 (1A) and had become liable to pay simple interest at the rate of 12% per annum on the amount of such tax for the period of the defaults. The petitioners preferred revision petitions against these orders to the Commissioner of Income-tax under section 264 of the Income-tax Act, 1961. In his common order dated February 24, 1981, the Commissioner noted that it was conceded that there had been delays in the remittances to the Reserve Bank of a few days over and above the seven days allowed. It was submitted by the petitioners before him that the average tax deducted by th....

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....tax Rules, 1962, was procedural and applied to all calculations of interest in proceedings that had arisen subsequent to January 1, 1975. Alternatively, it was submitted that the levy of interest under section 201 (1A) of the Income-tax Act, 1961, was penal and ought to be waived where the default was not intentional. Mr. Dwarkadas urged that the Commissioner ought to have considered the submission that the default was unintentional and that, therefore, interest should be waived; and, since he had not done so, his order was bad. Section 192 of the Income-tax Act, 1961, provides that any person responsible for paying any income chargeable under the head " Salaries " shall at the time of payment, deduct income-tax on the amount payable at ....

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....t from January 1, 1975 reads thus: 119A. In calculating the interest payable by the assessee or the interest payable by the Central Government to the assessee under any provision of the Act, (a) the period for which such interest is to be calculated shall be rounded off to whole month or months and for this purpose any fraction of a month shall be ignored; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated; (b) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored; and the amount so rounded ....