TaxTMI 
TaxTMI 
TaxTMI 
2026 (3) TMI 338
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..../2012 and 23/Jbp/2012. As these appeals involve an identical issue, they are heard analogously and are being decided by this common order. Facts of these cases are being taken from I.T.A. No.32/2014:- 2. M/s Ssangyong Engineering and Construction Company Ltd. (hereinafter referred to as 'deductee company') entered into a contract with the respondent assessee, i.e., the National Highway Authority of India (in short 'NHAI') for the development of national highways. The NHAI, being an assessee, made a payment to the deductee company with TDS as provided under Section 195 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') at marginal rates after obtaining orders under Section 197(1) from its Assessing Officer, ITO(TDS), Ward 2(1), International Taxation, New Delhi. By virtue of the aforesaid order passed under Section 197, the deductee company was entitled to receive payment from the respondent/assessee at a marginal rate @ of 2.1% for assessment year 2006-07, @ of 2.112% for the assessment year 2007-08, @ of 1% for the assessment year 2008-09 and @ of 0.75% for the assessment year 2009-10 and 2010-11. 3. The respondent/assessee was trea....
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.... ? and 201(1A) of the Act and thereby granting the relief? 2. Whether, on the facts and in the circumstances of the case, the ITAT was justified in law in deleting the interest levied u/s 201(1A) of the Act, while failing to appreciate that the deductor cannot consider the assessment status of the deductee unless and until a certificate u/s 197 of the Act is granted by the Assessing Officer ?" 8. We have heard learned counsel for the parties. 9. Shri Siddharth Sharma, Advocate, submits that the sole issue, which requires consideration, is whether the benefit and effect of the certificate dated 30.06.2008 is liable to be given from the date of issuance of the certificate or for the entire assessment year. Learned counsel submits that the ITAT has committed a serious error of law, while appreciating the order passed by the learned A.O. and CIT, as both the Authorities have categorically held that the effect of the said certificate under Section 197(1) can only be given prospectively and not retrospectively. The respondent/assessee was in default on the date of deduction of tax, because the deductor had to deduct the tax irrespective of the income, in the absence of any....
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....priate. (2) Where any such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. (2A) The Board may, having regard to the convenience of assessee's and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub-section (1) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith. 13. It is clear from the language of Section 197 that if the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income tax at any lower rate or no deduction of income tax, as the case may be, the A.O. shall on an application made by the assessee in his behalf, give him such certificate as may be appropriate. Under Sub-section (2), where any such certificate is given, the person responsible for paying the income tax shall deduct the income tax at t....
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.... not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, - (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of subsection (3) of section 200: Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident but is not deemed to be an assessee in default under the first proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such payee: ....