DC I T INTERNATIONAL TAXJAIPUR vs. M/S NATIONAL HIGHWAY AUTHORITY OF INDIA

In both appeals common questions of law and facts are involved, hence, they are decided by this common judgment.

By way of these appeals, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department.

This Court while admitting the matters framed the following questions of law:- In DBITA No. 25/2016 “i) Whether on the facts and circumstances of the case and in law the Tribunal as well as CIT(A) was justified in deleting the levy of interest u/s 201(A) of the Act of Rs. 58,05,368/- as the assessee failed to deduct tax at source as mandatorily required u/s 195 of the Act and wrongly gave benefit of the orders u/s 195/197 of the Act, beyond the amount mentioned therein. In DBITA No. 27/2016 “i) Whether on the facts and circumstances of the case and in law the Tribunal as well as CIT(A) was justified in deleting the levy of interest u/s 201(1A) of the Act of Rs. 26,33,895/- as the assessee failed to deduct tax at source as mandatorily required u/s 195 of the Act and wrongly gave benefit of the orders u/s 195/197 of the Act, beyond the amount and period of their validity?” 4. 0661 wherein it has been held as under:- “9. While we are not inclined to disturb the finding of the Income Tax Appellate Tribunal that the assessee had acted in a bona fide manner, we do not agree with the conclusion of the Income Tax Appellate Tribunal that the assessee cannot be regarded as being as an "assessee in default" in respect of the short deduction. It is important to remember that the question of "good and sufficient reasons" only arises when one considers the proviso to Section 201(1) of the said Act. That proviso has been specifically introduced to negate the possibility of imposition of penalty under Section 221 if the Assessing Officer is satisfied that (3 of 7) [ITA-25/2016]

Insofar as the second question is concerned i.e., with regard to the interest payable under Section 201(1A) of the said Act, that is a mandatory provision, as already held by a Division Bench of this Court in the case of CIT v. ITC Limited, ITA No. 475/2010, dated 11.05.2011. The said Division Bench observed as under:- X

He has further relied upon the decision of Bombay High under:- "

The basic question pertains to the interpretation of s. 201(1A) of the Act. According to learned counsel, Mr. Arun Sathe, appearing for the assessee, s. 201(1A) of the Act is not mandatory and the precondition of reasonable cause for non- payment of taxes deducted under s. 192 of the Act

We have perused s. 201(1A) of the Act, which reads

The use of the word "shall" in s. 201(1A) makes the liability to pay interest in circumstances mentioned mandatory and there is no precondition of consideration of "reasonable cause" for non- payment in time of tax deducted under s. 192 of the Act. We hold that s. 201(1A) of the Act is mandatory and the Tribunal was right in law in taking the view that the ITO was not required to take into consideration the "reasonable cause" for non-payment of taxes deducted under s. 192 of the Act. We may add here that in the case of Bennet Coleman & Co. Ltd. vs. V. P. Damle, Third ITO MANU/MH/0083/1984 : [1986]157ITR812(Bom), a learned single judge of this Court has taken the same view on the interpretation of s. 201(1A) which we have taken herein.”

He has also relied upon the decision of Gauhati High Court in been held as under:- “8. On going through the provision of Section 201(1A) it is clear that interest has to be paid for delayed payment of tax. The section does not impose any restriction unlike penalty. The Assessing Officer has jurisdiction to impose penalty only when he finds that delay in payment was without good and sufficient reason.”

Rajya Vidyut Prasaran Nigam Ltd. [2006] 287 ITR 354 (Raj.) wherein it has been held as under:- “After perusal of the facts of the case and relevant law as on the subject, we are of the opinion that learned Commissioner of Income Tax (Appeals) had rightly held that interest under Section 201(1A) of the Act was to be deleted after due verification by the Assessing Officer from the enclosures with supporting documents. In all the cases, the recipient of the income had claimed refund, which had arisen due to tax deducted at source. Therefore, we find no infirmity in the order of the learned Commissioner of Income Tax (Appeals) and the same is hereby sustained.”

He has further relied upon the decision of Gujrat High Court Co-operative Housing Society Ltd. 253 ITR 310 wherein it has been held as under:- “If one looks at the fact whether Ravi Builder had in fact paid the amount of tax payable by it on the amount which was paid to it by the assessee, one finds that Ravi Builder had paid the tax. In fact for both the years, it had paid more advance tax than what was payable by it. Thus, the entire amount of tax which was payable by it had been duly paid. Had Ravi Builder not paid tax on the amount which it had received from the assessee, the Revenue could surely saddle the assessee with the liability of payment of interest under the provisions of Section 201(1A) of the Act. But in the instant case, as Ravi Builder had already paid the tax on the income, in our opinion, there was no question of levying any interest on the assessee as the amount which was payable to the Revenue had been duly paid. In other words, we may say that the liability of the assessee-society to make deduction at source and pay the tax to the Revenue is not independent of the liability of the contractor or Ravi Builder to pay the tax. If assessment in relation to income of Ravi

In that view of the matter, the view taken by the jurisdiction High Court is required to be accepted and hence, the appeal being devoid of merit deserves to be dismissed. Even otherwise there is concurrent finding of the authorities.

The issue is answered in favour of the assessee and against the department.

The appeals stand dismissed. (VIJAY KUMAR VYAS)J. (K.S. JHAVERI)J. A.Sharma/116-117