“interest under section 201(1A)”

TDS / TCSSection 201(1A)Section 201(1A)369 judgments

The decision most relied on for interest under section 201(1A) is Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT (293 ITR 226), cited in 576 judgments on BharatTax.

Leading authorities on interest under section 201(1A)

Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT

293 ITR 226 · 2007 · Supreme Court

576

citing judgments

The deductor cannot be treated as an assessee-in-default under Section 201(1) if the deductee has already paid the tax or offered the impugned receipts in their return of income. However, interest under Section 201(1A) for delayed deposit of tax can still be levied up to the date of filing of the return of income by the deductee.

Prakash Cotton Mills Pvt. Ltd. v. CIT

201 ITR 684 · 1993 · Supreme Court

133

citing judgments

Compensatory interest or damages paid for a breach of contract, arising in the normal course of business, are allowable as a deduction under section 37(1) as wholly and exclusively incurred for business purposes. This principle extends to indirect taxes paid in the course of business, which are admissible as business expenditure.

Bharat Commerce Industries Ltd. v. CIT

230 ITR 733 · 1998 · Supreme Court

130

citing judgments

The Supreme Court holds that interest paid under Section 201(1A) of the Income-tax Act, for failure to deduct tax at source, is not an allowable business expenditure under Section 37(1) of the Act.

Lachmandas Mathura v. CIT

254 ITR 799 · 2002 · Supreme Court

119

citing judgments

Interest paid on delayed payment of statutory dues, such as sales tax, service tax, TDS, and GST, is compensatory in nature rather than penal. Consequently, such interest is an allowable deduction in computing business profits.

American Express International Banking Corporation v. CIT

258 ITR 601 · 2002 · High Court

citing judgments

Interest paid by banks is allowable as a deduction in computing total income. The decision distinguished the Supreme Court's ruling in Vijaya Bank regarding the deductibility of such interest.

CIT v. Chennai Properties & Investment Ltd.

239 ITR 435 · 1999 · High Court

citing judgments

Interest paid under section 201(1A) for delay in remitting tax deducted at source is not an allowable business expenditure and cannot be regarded as a compensatory payment. This interest takes its character from the nature of the tax levy, being a direct tax itself.

CIT v. Oriental Insurance Co. Ltd.

125 Taxmann 1094 · 2002 · High Court

citing judgments

Interest levied under Section 201(1A) for delayed remittance of Tax Deducted at Source (TDS) is compensatory in nature, not penal. It is a distinct provision for delayed remittance, similar to interest paid by Revenue on refunds.

Bank Ltd. (supra), Saraswat Co-op. Bank Ltd. v. ITO (TDS)

54 Taxmann.com 297 · 2015 · Reported

citing judgments

A multi-state cooperative bank is obligated to deduct tax at source on interest paid on fixed deposits placed by cooperative societies, as Section 194A(3)(viia) of the Income Tax Act, 1961, rather than Section 194A(3)(v), applies to cooperative banks in this context.

Judgments citing interest under section 201(1A)

M/S Karnataka Emta Coal Mines Limited, Bangalore vs. The Assistant Commissioner of Income Tax Circle-4(1)(1), Bangalore

In the result, assessee’s appeals are partly allowed for statistical purposes

ITA 2136/BANG/2018[2011-12]Status: DisposedITAT Bangalore14 Nov 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Sheetal Borkar, A.RFor Respondent: Shri Gudimella V.P. Pavan Kumar &

Section 32(1)(ii)Section 35ESection 37

interest at the rate of 12 per cent p.a. Similarly, for refunds, revenue pays interest to the assessee. Therefore, the levy of interest under section 201(1A) cannot at any rate be construed as a penalty. In that view, the contra finding of the Tribunal is set aside. The questions

M/S Karnataka Emta Coal Mines Limited, Bangalore vs. The Assistant Commissioner of Income Tax Circle-4(1)(1), Bangalore

In the result, assessee’s appeals are partly allowed for statistical purposes

ITA 2135/BANG/2018[2010-11]Status: DisposedITAT Bangalore14 Nov 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Smt. Sheetal Borkar, A.RFor Respondent: Shri Gudimella V.P. Pavan Kumar &

Section 32(1)(ii)Section 35ESection 37

M/S. Icici Securities Ltd, Mumbai vs. The Income Tax Officer (International Tax Ward)2(2) (2), Mumbai

In the result, the appeal is allowed in the terms indicated above

ITA 1511/MUM/2022[2015-16]Status: DisposedITAT Mumbai09 Nov 2022AY 2015-16

Section 195Section 201Section 201(1)Section 201(4)Section 204Section 49

interest of Rs.44,55,51,676 under section 201(1A) of the Act. 11. The learned CIT(A) failed to appreciate that interest under section 201(1A) of the Act cannot be calculated beyond the date of deposit of taxes by the recipient i.e., BNY Mellon. 3. To adjudicate

M/S. Macrotech Developers Ltd (Sucessor to Palava Dwellers Pvt. Ltd), Mumbai vs. Income Tax Officer, International Taxation 3(2) (2), Mumbai

In the result, appeal by the assessee is allowed for statistical purpose

ITA 1813/MUM/2022[2016-17]Status: DisposedITAT Mumbai11 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Niraj ShethFor Respondent: Shri Lovish Kumar

Section 201(1)Section 250Section 271CSection 4(2)

year under consideration. In respect of transaction with resident vendor, wherein assessee was deemed to be an assessee in default and interest under section 201(1A) of the Act was levied, assessee sought resolution of the dispute under VSV scheme. However, in respect of transaction with non-resident vendor

M/S. Karnataka State Beverages Corporation Limited, Bangalore vs. The Principal Commissioner of Income Tax, Bangalore - 4, Bangalore

In the result, the appeal filed by the assessee stands partly allowed

ITA 397/BANG/2020[2015-16]Status: DisposedITAT Bangalore29 Sept 2022AY 2015-16

For Respondent: Shri Narendra Sharma

Section 143(3)Section 154Section 263

Allowability of - Assessment year 1981-82 - Assessee having failed to deduct tax at source and remit same to State, had to pay interest under section 201(1A) for delayed period, which it claimed as business deduction - Whether interest paid takes colour from nature of principal amount required to be paid

ACIT (TDS -2(2), Mumbai vs. M/S. Sula Vineyards Pvt. Ltd, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 12/MUM/2022[2018-19]Status: DisposedITAT Mumbai16 Sept 2022AY 2018-19

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2018-19 Acit (Tds)-2(2), Sula Vineyards Pvt. Ltd., Room No. 322, Mtnl Office, 901, Hubtown Solaries, N.S. Cumballa Hill, Vs. Phadke Marg, Mumbai-400026. Mumbai-400029. Pan No. Aabcn 7126 Q Appellant Respondent Revenue By : Mr. Hoshang B. Irani, Dr Assessee By : Mr. Niraj Singh, Ar Date Of Hearing : 28/07/2022 Date Of Pronouncement : 16/09/2022

For Appellant: Mr. Niraj Singh, ARFor Respondent: Mr. Hoshang B. Irani, DR

Section 201(1)

perquisite and liability in terms of section computed the quantum of perquisite and liability in terms of section 201(1) and interest under section 201(1A) of the 201(1) and interest under section 201(1A) of the Act Act as under: “5.3 After looking into facts of After looking ... deleted the liability raise On further appeal, the Ld. CIT(A) deleted the liability raise under section 201(1) and interest under section 201(1A) of the under section 201(1) and interest under section 201(1A) of the under section 201(1) and interest under section 201(1A

M/S. Life Insurance Corporation of India, Mumbai vs. ITO(TDS)-2(3), Mumbai

Appeal is partly allowed

ITA 7030/MUM/2017[2010-11]Status: DisposedITAT Mumbai06 Sept 2022AY 2010-11

For Appellant: Shri Vijay MehtaFor Respondent: Shri Milind Chavan

Section 133ASection 194CSection 194ISection 201Section 201(1)

Crores and, therefore the Assessing Officer raised the demand under Section 201(1) of the Act levying interest under Section 201(1A) of the Act for a period of 35 months @ 1% p.m. 4. Being aggrieved, the Appellant preferred appeal the CIT(A) and filed additional evidence. The Appellant also

Kamal Jafferali Wadhwania, Mumbai vs. Income Tax Officer WD 2(2) (4), Mumbai

ITA 391/MUM/2022[2013-14]Status: DisposedITAT Mumbai25 Aug 2022AY 2013-14

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: NoneFor Respondent: Shri Tejinder Pal Singh, Sr. A.R

Section 193(1)Section 194Section 194CSection 201Section 201(1)

deducting and depositing of TDS under section 193(1) of the Act on the amount of Rs.5,68,076/- and interest under section 201(1A) of the Act and thereby raised the demand of Rs.82,010/- (Rs.45,443 default + Rs.36,568 interest) by passing an order under section 201

Kamal Jafferali Wadhwania, Mumbai vs. Income Tas Officer, WD 2(2) (4), Mumbai

ITA 390/MUM/2022[2012-13]Status: DisposedITAT Mumbai25 Aug 2022AY 2012-13

Bench: Shri Kuldip Singh & Shri Gagan Goyal

For Appellant: NoneFor Respondent: Shri Tejinder Pal Singh, Sr. A.R

Section 193(1)Section 194Section 194CSection 201Section 201(1)

M/S. Volvo Group India Private Limited (Earlier Known As Volvo India Private Limited), Bengaluru vs. Income Tax Officer (OSD) Large Tax Payers Unit, Bangalore

ITA 498/BANG/2020[2014-15]Status: DisposedITAT Bangalore25 Aug 2022AY 2014-15

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2014-15

For Appellant: Shri Neeraj K. Jain, AdvocateFor Respondent: Shri Bijoy Kumar Panda, CIT(DR)(ITAT), Bengaluru

Section 194CSection 194C(6)Section 201Section 40

cannot be subject to the TDS provisions again so as to demand tax under the provisions of section 201 and also levy interest under section 201(1A), rendering provisions of section 40(a)(ia) of the Act otiose. 10. Without prejudice, the CIT(A) failed to appreciate that

M/S Google India Private Limited, Bangalore vs. Dy. D.I.T., Bangalore

In the result, the appeals by the assessee are allowed

ITA 1512/BANG/2013[2008-09]Status: DisposedITAT Bangalore10 Aug 2022AY 2008-09

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri Percy Pardiwala, Sr. AdvocateFor Respondent: Shri K V Aravind, Standing Counsel

Supreme Court decision in Eli Lily & Co. (India) (P.) Ltd. (supra) wherein it was held as follows:- “…….. For computation of interest under section 201(1A), there are three elements. One is the quantum on which interest has to be levied. Second is the rate at which interest

M/S Google India Private Limited, Bangalore vs. Dy. D.I.T., Bangalore

In the result, the appeals by the assessee are allowed

ITA 1511/BANG/2013[2007-08]Status: DisposedITAT Bangalore10 Aug 2022AY 2007-08

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri Percy Pardiwala, Sr. AdvocateFor Respondent: Shri K V Aravind, Standing Counsel

Expat Engineering India Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-2(1)(1), Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 503/BANG/2022[2017-18]Status: DisposedITAT Bangalore01 Aug 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Rajgopal, CAFor Respondent: Smt. Priyadarshini Baseganni

Section 139Section 139(1)Section 143(3)Section 2(24)(x)Section 36Section 43B

rendered in the context of period up to which interest u/s.201(1A) is to be calculated and in that regard held that interest under section 201(1A) is a compensatory measure for withholding the tax which ought to have gone to the exchequer. The decision of Hon’ble Karnataka High

M/S. Ozone Urban Infra Developers Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax TDS, Circel-2(1), Bangalore

In the result, appeal is allowed in favour of the assessee

ITA 225/BANG/2022[2019-20]Status: DisposedITAT Bangalore12 Jul 2022AY 2019-20

Bench: Shri. George George K & Ms. Padmavathy Sassessment Year : 2019-20 M/S. Ozone Urbana Infra Developers Pvt. Ltd., Vs. Acit Tds, No.30, Ulsoor Road, Bengaluru North, Circle – 2(1), Bengaluru – 560 042. Bengaluru. Pan : Aaecm 5394 G Appellant Respondent Assessee By : Shri. Narendra Kumar Jain, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 05.07.2022 Date Of Pronouncement : 12.07.2022

For Appellant: Shri. Narendra Kumar Jain, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 131Section 133ASection 194ASection 2Section 201Section 201(1)Section 250

buyer, who had availed the loan from NBFC and not the Appellant. 6. The Appellant denies its liability to be charged with interest under Section 201(1A) of the Act in the facts and circumstances of the case. 7. The Appellant craves for leave of this Hon'ble Tribunal ... charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under section 271C

M/S. Mobily Infotech India Private Limited, Bangalore vs. Income Tax Officer, Ward-4(1)(3), Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2022[2017-18]Status: FixedITAT Bangalore07 Jul 2022AY 2017-18

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

assessee cannot be treated as an assessee in default as per the provisions of section 201(1); (b) the payment of interest under section 201(1A) prior to filing of Form 26A is not mandatory. (c) assuming without admitting that the impugned interest expenditure is disallowed under section

M/S. Hical Infra Private Limited, Bangalore vs. Deputy Commissioner of Income Tax (OSD), Range- 1, Bangalore

In the result, the appeal by the assessee is allowed

ITA 313/BANG/2020[2016-17]Status: DisposedITAT Bangalore07 Jul 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy Sassessment Year : 2016-17

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sankarganesh K. Jt.CIT(DR)(ITAT), Bengaluru

Section 143(2)Section 143(3)Section 36(1)(iii)Section 40

M/S Total Environment Building Systems Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, revenue’s appeal stands dismissed and the assessee’s appeals for A

ITA 46/BANG/2017[2011-12]Status: DisposedITAT Bangalore29 Jun 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Vilas V Shinde, CIT DR

Section 250Section 37Section 40Section 43B

stands dismissed and Additional ground raised for AY 2011-12 stands allowed. 16. Ground no.6-7 is in respect of disallowance of interest under section 201(1A) by treating it to be penal in nature. 16.1 It is submitted that the interest under section 201(1A) is not penal

Total Environment Building Systems Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, revenue’s appeal stands dismissed and the assessee’s appeals for A

ITA 45/BANG/2017[2010-11]Status: DisposedITAT Bangalore29 Jun 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Vilas V Shinde, CIT DR

Section 250Section 37Section 40Section 43B

Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore vs. M/S Total Environment Building Systems Pvt Ltd, Bangalore

In the result, revenue’s appeal stands dismissed and the assessee’s appeals for A

ITA 40/BANG/2017[2010-11]Status: DisposedITAT Bangalore29 Jun 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri Vilas V Shinde, CIT DR

Section 250Section 37Section 40Section 43B

M/S. Goldman Sachs Services Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, International Taxation, Circle- 1(1), Bangalore

In the result, the appeal filed by the assessee for all the years under consideration stands allowed

ITA 369/BANG/2020[2014-15]Status: PendingITAT Bangalore29 Apr 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(It)A Nos. 362 To 369 & 338 To 345/Bang/2020 Assessment Years : 2011-12 To 2014-15 & 2015-16 To 2018-19 M/S. Goldman Sachs Services Pvt. Ltd., The Deputy Wing A, Wing B & Commissioner Of Ground Floor To 6Th Floor Income Tax, Of Wing C, International Helios Business Park, Taxation, 150 Outer Ring, Vs. Circle 1 (1), Kadubeesanahalli, Bangalore. Bangalore – 560 103. Pan:Aaccg2435N Appellant Respondent Assessee By : Shri Sharath Rao, Ca : Dr. Manjunath Karkihalli, Revenue By Cit Dr Date Of Hearing : 09-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Appeals Are Filed By The Assessee Against Following Orders, Passed By The Ld. Dcit, International Taxation, Circle – 1(1), Bangalore Independently, Under Section 201(1) & 201(1A) Of The Act, For The Assessment Years Under Consideration As Under:

For Appellant: Shri Sharath Rao, CA

Section 192(1)Section 195Section 201Section 201(1)

201(1) of the Act for non-deduction of taxes at source under section 195 of the Act. And; 2. Levy of interest under section 201(1A). As the above common issues in all these appeals were heard together, they are being disposed of by this common order for sake