Full Judgment
201(1A) of the Act. While the learned CIT(A) allowed all the appeals against penalty orders under s. 201/221(1), he gave only partial relief so far as appeals of the assessee against order under s. 201(1A) were concerned. That is how, assessee is in appeal in five of its appeals before us. The sixth appeal filed by the assessee i.e. ITA No.4442/Bom/1987 is for the asst. yr. 1983-84 pertaining to AO's order under s. 221 r/w s. 201(1) in as far as the AO has directed the assessee to pay the amount of tax deductible from two payments of Rs. 7,27,823 and Rs. 1,19,974 made on 28th June, 1982, and 17th June, 1982, respectively.
The assessee is a limited company which had entered into an agreement with another limited company viz., The Grant Eastern Shipping Co. Ltd., referred to as "GESCO" in various parts of the orders as well as in the grounds of appeal. According to this agreement, the assessee-company had purchased a ship from the other company for about Rs. 4.87 crores. Out of this, an amount of Rs. 53.07 lakhs was to be paid on signing the agreement. A further instalment of like amount was to be paid within three days after the vessel was ready for delivery. The balance amount along with interest at 15% was to be paid in twenty equal quarterly instalments as under :------------------------------------------------------------------------ Asst. yr.
Date of payment Principal amount Interest------------------------------------------------------------------------ 1979-80 20-9-1977 19,06,025 14,29,590 -do- 26-12-1977 19,06,025 13,58,043 -do- 27-3-1978 19,06,025 12,86,567 -do- 26-6-1978 19,06,025 12,15,090 1980-81 27/9/1978 19,06,025 11,43,615 -do- 31-1-1979 19,06,025 10,72,139 -do- 26-3-1979 19,06,025 10,00,663 -do- 26-6-1979 19,06,025 9,29,187 1981-82 26-9-1979 19,06,025 8,57,711 -do- 26-12-1979 19,06,025 7,86,236 -do- 27-3-1980 19,06,025 7,14,759 -do- 26-6-1980 19,06,025 6,43,283 1982-83 27-2-1981 19,06,025 4,28,856 -do- 27-4-1981 19,06,025 8,30,860 -do- 26-6-1981 19,06,025 10,73,690 1983-84 28-9-1981 19,06,025 2,85,904 -do- 29-6-1982 57,18,057 7,27,823 -do- 17-6-1982 Repair bill 1,19,974------------------------------------------------------------------------ During the course of assessment proceedings for the asst. yr. 1981-82 the AO discovered that the appellant had not deducted tax at source from the payment of interest to GESCO. After issuing the necessary show-cause notice the AO passed separate orders for the asst. yr.
1979-80 to 1983-84. One set of orders was under s. 201(1A) of the IT Act and the other set was under s. 201(1) r/w s. 221(1) of the IT Act.
After discussing all facts and circumstances of the case, the AO ordered in his orders under s. 201(1) r/w s. 221 that the assessee should pay tax which it was required to deduct at source amounting to Rs. 32,73,927 by 31st July, 1984. He levied penalty at the rate of 10% for each of the years which is as under : In the set of orders under s. 201(1A) for these assessment years, the AO completed the interest leviable upto 31st July, 1984, i.e., the date by which he had ordered the assessee to pay the tax which was to be deducted at source, as per Annexure 'A' of his order. The interest for each of the years under consideration worked out to the following figures : There was similar default regarding payments to three individual parties of Jaipur on 14th May, 1980, and 8th August, 1980, against whom he computed the interest at Rs. 2,528.
3. The assessee went in appeal against the above-mentioned orders and took various grounds against the orders passed by the AO. The learned CIT(A) passed a common order deciding all the appeals after taking into account various decided cases on the subject including the decision of the Bombay High Court in the case of Bennet Coleman & Co. Ltd. vs. V.P. Damle, ITO (1986) 157 ITR 812 (Bom) ordered that the AO should call for information regarding the assessments and payments of taxes of GESCO and charge interest for the periods from the dates on which the tax was deductible under s. 194A to the dates on which the tax was actually paid by GESCO on completion of regular assessment for the respective assessment years. Further, if any of such payment was made on a date beyond the date on which the payment was made by the appellant company pursuant to the impugned orders, interest is to be charged only upto the date of payment by the appellant. Further, if in the case of GESCO any of the relevant assessments had been made on a negative or nil income, the terminal date for the period of default will be the date of the assessment order in the case of GESCO.4. So far as assessee's objection regarding AO's directions to pay the amount of tax required to be deducted at source was concerned, he held that it was barred by limitation under s. 231 of the IT Act except to the extent it related to the tax deductible from the two payments of Rs. 7,27,823 and Rs. 1,19,947 made on 28th June, 1982, and 17th June, 1982, respectively. These dates are relevant for the asst. yr. 1983-84 against which the assessee has come in appeal before us in IT Appeal No. 4442/Bom/1987. So far as the imposition of penalties under s. 201 r/w s. 221(1) was concerned, the learned CIT(A) held that the failure of the appellant to deduct tax at source from various payments of interest was not without good and sufficient reasons and hence, penalties imposed for all the five years were cancelled. This has brought the Revenue in appeal before us.
5. The learned counsel for the assessee submitted that it is a case where the propositions to whether tax was to be deducted at source was itself questioned by the assessee because the assessee entertained a belief that there was no interest payment to the GESCO and hence, no tax was to be deducted. This objection of the learned counsel is not accepted, because the CIT(A) has very clearly mentioned that there was a clear break-up of the principal amount and the interest to be paid in each instalment and hence, the assessee cannot say that it was not aware of the payment of interest from which tax had to be deducted.
6. Another argument given by the learned counsel was that as per the letter from GESCO dt. 7th March, 1987, filed along with assessee's letter dt. 5th November, 1996, before the Tribunal and the letter dt.
27th April, 1984, from Shri J. L. Khanna, Finance executive of the assessee-company filed along with letter, it was clear that GESCO had suffered huge losses in the past and hence, that company was not liable to pay any tax and that is why the assessee-company did not deduct any tax at source. He argued that when penal provisions were to be implemented, a reasonable view should be taken. In this context, the learned counsel has filed a copy of the decision of the Tribunal 'B' Bench, Delhi in the case of Salwan Construction Co. vs. Asstt. CIT (1995) 53 TTJ (Del) 39 : (1996) 84 Taxman 34. He pointed out that the Tribunal had held that in view of judicial decisions, when assessments of the payees have been completed and no tax is payable by them, the TDS cannot be realised once again from the payer. Similarly, regarding charging of interest under s. 201(1A), the Tribunal had held that under s. 201(1A) interest is chargeable from the date on which tax was deductible to the date on which the tax is actually paid. In that case, as in the case of the assessee before us, assessee had not paid the tax at all and hence, the TDS could not be recovered from the assessee as the payees were not liable to tax. Further, if interest was held to be chargeable, it would be chargeable from the date on which the tax was deductible to the indefinite period because interest was chargeable till payment was actually made while in the instant case no payment was made. For this proposition the learned Members had relied on the ratio of decision in the case of CIT vs. B. C. Srinivasa Setty (1981) 128 ITR 294 (SC).
7. The learned counsel referred to the provisions of s. 231 and pointed out that since the penalties were barred by time as held by the Calcutta High Court in the case of CIT vs. Dunlop Rubber Co. (India) Ltd. (1980) 121 ITR 476 (Cal), no tax could be recovered from the assessee and since charging of interest under s. 201(1A) was part of recovery proceedings, no interest could be charged.
8. In this context, he further referred to the two decisions of the Madras Bench of Tribunal in the case of M/s S. P. G. Ramaswamy Nadar & Sons and M/s Ramesh Enterprises, on decision of Cochin Bench in the case of K. N. Mathew & Sons and one decision of Bombay Bench in the case of GESCO itself, viz., The Great Eastern Shipping Co. Ltd. vs.
Asstt. CIT, copies of which have been filed before us. He pointed out that in each one of the above-mentioned cases, the respective Benches of the Tribunal had referred to earlier decisions of the Tribunal on these issues and hence, in the instant case neither the penalties could be imposed on the assessee because the assessee had reasonable basis for not paying the taxes, nor the assessee could be directed to pay the tax which should have been deducted because the assessments of GESCO had been made by the time the AO had passed the impugned orders and no interest could be charged from the assessee under s. 201(1A). In any case, since now it is clear from the letter of GESCO dt. 7th March, 1987, that the assessments of that company had been made either at huge losses or at nill till asst. yr. 1983-84, the learned counsel argued as per the ratio of decision of the Tribunal in the case of Salwan Construction Co (supra) no action can be taken against the assessee.
9. The learned Departmental Representative, on the other hand, drew our attention to s. 190 of the IT Act, according to which payment of TDS could not be postponed, Sec. 191 makes it direct responsibility of the person making the impugned payments to deduct the tax at source. He pointed out that the provisions of s. 197 were very specific giving power only to the ITO assessing the payee and no higher or lower authority or other person could take a decision not to deduct the tax at source. Further, in a case where the payee was a limited company, as in the instant case, even the ITO had not been given authority at the relevant time to give permission to the payer not to deduct tax at source. Hence, neither Mr. J. Khanna nor any other person had the authority to take a decision on the basis of any reason whatsoever, not to deduct the tax at source. He pointed out that non-deduction of tax at source made the assessee, an assessee in default according to s. 201 of the Act and hence, all other consequences for imposing penalty, directing payment and recovery of tax and charging of interest follows.
In this way, according to the learned Departmental Representative, the orders of the AO were legally sound and had to be restored on all the points. He further pointed out that according to the decision of the Bombay High Court in the case of Bennet Coleman & Co. Ltd. vs. V. P.Damle, ITO (supra) the liability starts immediately on default and that interest under s. 201(1A) was not a penalty provision. He further referred to the decision in the case of B. D. Khaitan vs. ITO (1978) 113 ITR 556 (Cal) where it was held that in the context of the language of s. 231 a proceeding for imposition of penalty is not a proceeding for the recovery of taxes. Further, the fact that other proceedings for recovery of tax had been taken would not operate as res judicata to bar a proceeding for imposition of penalty. He also referred to the decision in the case of CIT vs. Shamsunder Tea Co. (1978) 114 ITR 116 (Gau) where a similar contention of the assessee had been rejected. He further argued that since a responsibility of deducting tax at source was imposed on the payer, the assessee in default could not be saved on the basis of so called bona fide reason or reasonable cause for defiance of these provisions.
10. In his rejoinder, the learned counsel for the assessee submitted that according to the provisions of s. 205, the Court should ensure that there is no double payment of taxes. Secondly, according to s.
201(2) the consequences of interest penalty, etc. start after the tax has been deducted and not where it has not been deducted. Thirdly, the words "such person" in s. 201(1) refer to the person mentioned in s.
200. In s. 200 it is a person who has deducted the tax at source and hence, would not include a person who had not deducted tax at source, as the assessee before us. Fourthly, in s. 221 the words "any default or deemed to be in default in payment of tax ....." would mean that it is not the same thing as a person deemed to be in default for not deducting the tax at source. Fifthly, there is no provision in law to charge interest upto a particular date when tax is not paid at all. He submitted that all the Bombay High Court decisions on the subject, viz., the case of Benett Coleman (supra) so also the case of Pentagon Engg. (P) Ltd. vs. CIT (1995) 212 ITR 92 (Bom) were those where the tax had been deducted at source and had not been paid to the Government within the prescribed time. He submitted that the ratio of those cases is not applicable to assessee's case.
(iii) CIT vs. Surat Art Silk Cloth Mfs. Association (1980) 121 ITR 1 (SC); He submitted that as per the ratio of decisions in all these cases and the observations made by the Hon'ble Courts, all the provisions of law had to be interpreted sympathetically, reasonably and keeping in mind the scheme of the Act. Literal interpretation of a section of words had to be avoided if it led to absurd results or would defeat the obvious intention of the legislation. With this background he submitted that there was no justification in charging interest from the assessee when no tax was payable by the payee and that even if the tax had been paid, it should have resulted in a refund to the payee, viz, GESCO. He claimed that non-deduction of tax at source neither gave any advantage to the assessee nor does it result in a loss to the revenue.
12. So far as the appeals filed by the Revenue are concerned, the learned Departmental Representative stated that since the learned CIT(A) had not held that the proceedings for the asst. yr. 1983-84 were time-barred, he may have to seek instructions from the Department as to why this appeal had been filed. Since the Revenue has not been liable to give any jurisdiction for filing this appeal, this is dismissed.
13. In his arguments for the other appeals, the learned Departmental Representative submitted that all the provisions starting from s. 192 onwards including and upto s. 221 were enacted to affect quick and early realisation of revenue and to avoid tax evasion and hence, they were not merely procedural but regulatory provisions. He pointed out that when an assessee was in default it led to the inter alia consequences of interest being charged from him under s. 201(1A), realisation of tax from him and imposition of penalty under s. 221 on him. He pointed out that in the instant case the assessee had failed to deduct tax at source not only from GESCO but from other parties at Jaipur also and about whom assessee could not show as to whether their income was below taxable limit. This showed that the assessee was a habitual defaulter who habitually and knowingly defied the provisions of law. Regarding the observation of the learned CIT(A) who had held that these were recovery proceedings, he referred to the decisions in the cases of Union of India vs. Ammenabi & Ors. ((1978) 112 ITR 863 (Mad), Raja Yuvrajdutt Singh vs. Dy. CIT (1970) 78 ITR 252 (SC), Lal Bhan Pratap Narain Bahadur Pal vs. State of U.P. & Anr. (1962) 46 ITR 247 (All), Mohammed vs. Collector of Calicut & Ors. (1967) 66 ITR 113 (Ker) and Kashi Ram Agarwal vs. Collector of 24 Paragana & Ors. (1958) 33 ITR 800 (Cal), sum and substance of which was that the date of commencement of recovery proceedings was the date when the AO sends certificate of recovery to the TRO. In this view of the matter, the provisions of s. 201 were outside the purview of the recovery proceedings. He submitted that as against the decision of the Calcutta High Court in the case of Dunlop Rubber Co. (supra) on which the learned CIT(A) has relied, the decisions in the cases of B. D. Khitan vs. ITO and CIT vs. Shyamsunder & Co. (supra) and Anandram Gajadhar vs.
CIT (1978) 113 ITR 566 (Cal) at p. 568, were rendered prior to the decision in the case of Dunlop Rubber Co. (supra) but had not been referred to by the Calcutta High Court although two of them were of the same High Court. He pleaded that in these circumstances we should rather follow the decision in the cases of B. D. Khaitan, Anandram Gajadhar and Shyam Sunder & Co. (supra) than the decision in the case of Dunlop Rubber Co. (supra). Further, he referred to the decisions in the cases in Krishna Bhatta vs. Agrl. ITO (1981) 132 ITR 21 (Ker), K.P. Narayanappa Setty & Co. vs. CIT (1975) 100 ITR 17 (AP), Ramkishan Baldeo Pd. vs. CIT (1967) 65 ITR 491 (All) and Mohd Atiq. vs. ITO (1962) 46 ITR 452 (All) to the effect that there was no time-limit for imposition of penalty under s. 221 although is should be initiated and imposed within a reasonable time. He also filed a copy of the decision of the Bombay Bench of Tribunal in the case of Vile Parle Sunjeevan. He pointed out that assessee's explanation that he had not deducted the tax at source by oversight was contrary to his other explanation that Shri J. L. Khanna had taken a conscious decision not to deduct the tax.
He submitted that when as per agreement with GESCO the instalments included payment of interest which amounts were separately mentioned, covering a period of five years it was difficult to believe that a company like the assessee which has got the benefit of best of advice besides its own finance and taxation cell, would not be under a legal obligation to deduct the tax at source from payment of interest amounting to several crore in all and several lakh of rupees each year.
He submitted that a strict interpretation was required for mandatory or procedural section so far as it benefitted the assessee. However, when the interpretation of a regulatory provision was required, we had to implement the intention of the legislature. Referring to the case of K.P. Verghese (supra) relied upon by Shri Vyas, he submitted that that was in connection with interpreting a vague and Draconian law and that is why those provisions were taken away from the statute. He further submitted that a large number of decisions of apex Court had reiterated that there was no equity in taxing laws and submitted that the provisions under consideration viz. in ss. 197, 201, 201(1A) etc. were inbuilt provisions to prevent evasion of tax and of non-payment of taxes due to the Government. He submitted that if the interpretation of s. 197 as argued by the learned counsel is accepted, it would make the provisions of s. 197 totally non est. He referred to the decision in the case of M. S. Ranganayakamma vs. M. G. Bhashyam (1992) 198 ITR 157 (Kar) at p. 168 where it was held that an interpretation of statute which does not advance the object of the Act but nullifies the provisions of Act, cannot be accepted. He also referred to the decision in the case of ITO vs. Girivanvashi Pragati Mandal (1992) 198 ITR 157 (AT) (Del) (SB) where it was held that the Courts should not interpret the statute to render any provision redundant. He submitted that the learned counsel for the assessee had emphasised and urged as to how justice can be extracted from provisions of the Act but he did not address us on interpretations making provision of Act redundant. He submitted that there could be no good and sufficient reason in the case of the assessee before us for not deducting the tax at source and not paying it to the Government as prescribed under the Act. According to the learned Departmental Representative law did not give the assessee-company a right to usurp the powers of the AO for allowing a person not to deduct tax at source, which is given to the ITO/AO only in s. 197 of the IT Act.
14. Regarding the question as to how long the default would continue, the learned Departmental Representative submitted that the learned CIT(A) had held that it would continue till the assessment of the payee was made. In any case, according to the learned Departmental Representative the reasons given by the assessee-company for not deducting tax at source were not convincing and hence, he urged that the orders of the AO imposing penalties and directing payment of tax from the assessee-company GESCO be restored. The learned counsel for the assessee in his rejoinder submitted that the arguments of the learned Departmental Representative were not relevant because the question of limitation under s. 221 was not in issue. He submitted that in these appeals the issue is as to whether there were good and sufficient reasons for not deducting tax at source. He referred to the decision in the case of Dr. Narottam Shah (copy of the order filed) where the Tribunal Bombay had cancelled the penalty imposed under s.
221 which was imposed for non-payment of advance tax, the learned counsel referred to a good number of cases such as the case of Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC), CIT vs.
Smt. Vijayanthimala (1977) 108 ITR 882 (Mad), CIT vs. Dadu Wala & Co.
(1988) 170 ITR 491 (Raj), etc. to canvass that if there was reasonable and sufficient cause, no penalty should be imposed.
15. We have carefully considered the learned arguments advanced from both the sides, the provisions of law on the subject so also the case law cited by the learned counsel for the assessee as well as by the learned Departmental Representative and the material on record. At the outset we may mention that all these appeals have arisen for alleged defaults for non-compliance of provisions regarding deducting of tax at source prescribed under s. 194A of the IT Act. Since these appeals pertain to the asst. yr. 1979-80 to 1983-84 we reproduce herebelow the provisions of s. 194A as they stood at the relevant time before being modified by Finance Acts 1987 and 1992. Sec. 194A read as under : 194A. "Interest other than "Interest on securities". - (1) Any person, not being an individual or an HUF, who is responsible for paying to a resident any income by way of interest other than income chargeable under the head "Interest on securities", shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force : Provided that no such deduction shall be made in a case where the person (not being a company or a registered firm) entitled to receive such income furnishes to the person responsible for making the payment - declaring that his estimated total income assessable for the assessment year next following the financial year in which the income is credited or paid will be less than the minimum liable to income-tax.
(2) The statement in writing referred to in sub-s. (1) shall also contain such other particulars as may be prescribed, be verified in the prescribed manner, be signed in the presence of - (b) a member of District Council or a Metropolitan Council, a Municipal Corporation or Municipal Committee; or (d) an officer of any banking company (including a co-operative bank) of the rank of sub-agent, agent or manager, and bear an attestation by such member or officer to the effect that the person who has signed the statement is known to him).
(i) where the amount of such income or as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-s. (1) to the account of, or to, the payee, does not exceed one thousand rupees; (ii) to such income credited or paid before the 1st day of October, 1967; (a) any banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies, or any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank), or (b) any financial corporation established by or under a Central, State or Provincial Act, or (c) the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or (d) the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963), or (e) any company or co-operative society carrying on the business of insurance, or (f) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette; (iv) to such income credited or paid by a firm to a partner of the firm; (v) to such income credited or paid by a co-operative society to a member thereof or to any other co-operative society; (vi) to such income credited or paid in respect of deposits under any scheme framed by the Central Government and notified by it in this behalf in the Official Gazette; (vii) to such income credited or paid in respect of deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in s. 51 of that Act, or with a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank); (viii) to such income credited or paid by the Central Government under any provision of this Act or the Indian IT Act, 1922 (11 of 1922), or the ED Act, 1953 (34 of 1953), or the WT Act, 1957 (27 of 1957) or the GT Act, 1958 (18 of 1958), or the Super Profit Tax Act, 1963 (14 of 1963), or the Companies (Profits) Surtax Act, 1964 (7 of 1964), or the Interest-tax Act, 1974 (45 of 1974).
(4) The person responsible for making the payment referred to sub-s.
(1) may, at the time of making any deduction, increase or reduce the amount to be deducted under this section for the purpose of adjusting any excess or deficiency arising out of any previous deduction of failure to deduct during the financial year.
Explanation : In this section, "Gazetted Officer" includes a Tehsildar or a Mamalatdar of a Taluka or Tehsil or any other officer performing functions similar to those of a Tehsildar or Mamlatdar".
16. We may further mention that in order to ensure that the various provisions for deduction of tax at source were duly complied with and did not cause unnecessary harassment to a person who was not liable to pay income-tax some exceptions were made in s. 197. Sec. 197 of the IT Act read as under at the relevant time : 197. "Certificate for deduction at lower rate. - (1) Where, in the case of any income of any person other than a company - (a) income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of ss. 192, 193, 194A (194B) (194BB) (194D) and (b) being a non-resident income-tax is required to be deducted at the time of payment at the rates in force under the provisions of s.
the ITO is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the ITO shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate.
(2) Where any such certificate is given, the person responsible for paying the income shall, untill such certificate is cancelled by the ITO, deduct income-tax at the rates specified in such certificate or deduct no tax as the case may be.
(3) Where the principal officer of a company considers that, by reason of the provisions of s. 80K, the whole or any portion of the dividend referred to in s. 194 will be deductible in computing the total income of the recipient, he may, before paying the dividend to the shareholder or issuing any cheque or warrant in respect thereof, make an application to the ITO to determine the appropriate proportion of the dividend to be deducted under the provisions of s.
80K; and on such determination by the ITO no tax shall be deducted on such proportionate account.
17. In order to further mitigate inconvenience to individuals assessees only s. 197A was introduced by the Finance Act 1982 w.e.f. 1st June, 1982, which reads as under : 197A "No deduction to be made in certain cases. - (1) Notwithstanding anything contained in s. 193 or s. 194 or s. 194A, no deduction of tax shall be made under any of the said sections in the case of an individual, who is resident in India, if such individual furnishes to the person responsible for paying any income of the nature referred to in s. 193 or s. 194, as the case may be, s. 194A, a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner to the effect that his estimated total income of the previous year in which such income is to included in computing his total income will be less than the minimum liable to income-tax.
(2) The person responsible for paying any income of the nature referred to in sub-s. (1) shall deliver or cause to be delivered to the CIT one copy of the declaration referred to in sub-s. (1) on or before the seventh day of the month next following the month in which the declaration is furnished to him." 18. Sec. 199 of the IT Act provides that credit for the tax deducted at source shall be given in the assessment of the payee, including provisional assessment under s. 141A, provided a certificate as required under s. 203 was furnished by the payee to this effect. Sec.
200 of the IT Act made it mandatory by laying down that the person deducting tax at source "shall pay within the prescribed time the sum so deducted to the credit of the Central Government or as the Board directs". According to r. 30(1)(b)(i)(2) the tax required to be deducted according to the provisions of law has to be paid to the credit of the Central Government in the case like that of the assessee (where the question is being considered in the light of deduction of tax at the time of payment of income by way of interest), within one week from the last date of the month in which the deduction is made.
Accordingly to sub-r. (3) of r. 30 of IT Rules the person responsible for deducting the tax at source from interest income "is required to remit the tax so deducted within one week, as mentioned above, in a branch of RBI or SBI "accompanied by a income-tax challan, blank copies of which will be supplied by the ITO on request for the purpose.
.........." 19. Sec. 201(1) lays down that "if any 'such person' does not deduct or after deducting fails to pay the tax, he or it shall, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax. Sub-s. (1A) of s. 201 prescribes as under : "(1A) Without prejudice to the provisions of sub-s. (1), if any such person, principal officer or company ............. does not deduct 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 at twelve per cent per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid." "The power to levy tax by deduction under s. 194A. .................
shall be without prejudice to any other mode of recovery." Sec. 203 prescribes that every person deducting tax in accordance with the provisions of ss. 192 to 194, 194A ............... shall, at the time of credit or payment of the sum, or, as the case may be, at the time of issue of a cheque ............. furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount so deducted, the rate at which the tax has been deducted and such other particulars as may be prescribed.
21. Sec. 205 to which our attention was drawn by the learned counsel for the assessee lays down "Where tax is deductible at the source under ......... s. 194A ......... the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income". At this point we may clarify that Shri Vyas wanted us to infer from this section that it provided that tax is not to be realised twice in respect of same income, first by deducting tax at source and again at the time of making assessment.
"Any person responsible for paying any income referred to in s. 194A shall prepare, and within thirty days from the 31st day of March in each year, deliver or cause to be delivered to the ITO in the prescribed form and verified in the prescribed manner, a return in writing showing - (a) the name and address of every person who has furnished to him an affidavit or a statement under the proviso to sub-s. (1) of s. 194A; (b) the amount of the income credited or paid during the financial year to each such person and the time or times at which the same was credited or paid, as the case may be; and 23. Sec. 221 of the IT Act prescribes that when an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-s. (2) of s. 220, be liable, by way of penalty, to pay such amount as the ITO may direct, and in the case of a continuing default, such further amount or amounts as the ITO may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears.
Explanation to s. 221 clarifies "For the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under s. 221(1) merely by reason of the fact that before the levy of such penalty he has paid the tax." Sub-s. (2) of s. 221 prescribes that "Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded.
24. We have reproduced the various provisions which concerns us in order to examine as to what extent the arguments advanced from both the sides can be considered in the light of these provisions and how far the ratio of decisions of various cases cited by both the parties can be applied in the light of various tenets for interpretation of statutes laid down by the Hon'ble Supreme Court in many of its judgments including the judgments referred to by the learned counsel for the assessee.
25. We need hardly refer to any specific judgment, but it is obvious from the Supreme Court decisions referred to by the learned counsel for the assessee that in the first instance where the provisions of law are specific and clear, the Courts cannot question the reasonableness of such provisions. It is only when the language of the statute is not clear and is capable of two interpretations, the interpretation in favour to the assessee had to be preferred. We may mention at this stage that in two of its recent decisions the Hon'ble Supreme Court has changed this concept also when in the case of Liberty Oil Mills Ltd. vs. Collector of Central Excise(SC) and Novopan India Ltd. vs. Collector of Central Excise (1995) 73 ELT 769 (SC) it laid down that doubtful points should be resolved in favour of the Revenue.
However, since in our view the various provisions of law with which we are concerned, are very clear and obvious, the question of two interpretations or the provisions being doubtful may not arise.
26. Another principle which has been laid down by the Hon'ble Supreme Court following various principles laid down by the House of Lords, is to the effect, that the Courts should not assume that any words or provisions in a statute are redundant or superfluous. It is only when a literal application of the language of a statute or provision of law produces a wholly unreasonable result, the Courts may do some violence to the words and so achieve that obvious intention and produce a rational construction [refer to CIT vs. National Taj Traders (1980) 121 ITR 535 (SC) at pp. 541 and 542]. In this particular case, viz., National Taj Traders, the Tribunal had set aside a revisional order of CIT under s. 33B of the old IT Act. According to the provisions of law existing at that time, the CIT was empowered to pass a revision order under s. 33B of IT Act, 1922, within two years from the date of ITO's order which was regarded as erroneous by the CIT. Since, by the time the Tribunal set aside that order of the CIT those two years had elapsed, it was argued that since two years had elapsed the CIT could not again pass an order under s. 33B (of the old IT Act). In such a situation the Hon'ble Supreme Court observed - "According to the construction contended for by the assessee and which found favour with the High Court the answer was in the affirmative, because sub-s. (2)(b), on its literal construction was absolute. In our view, such literal construction would lead to a manifestly absurd result, because in a given case like the present one, where the appellate authority (Tribunal) has found (a) the ITO's order to be clearly erroneous as being prejudicial to the interest of the Revenue; and (b) the CIT's order unsustainable as being in violation of principles of natural justice, how should the appellate authority exercise its appellate powers Obviously, it could not withhold its hands and refuse to interfere with the CIT's order altogether, for, that would amount to perpetuating the CIT's erroneous order, nor could it merely cancel or set aside the CIT's wrong order without doing anything about the ITO's order which had been found to be manifestly erroneous as being prejudicial to the Revenue .................. Such manifestly absurd result could never have been intended by the legislature." 27. In the case of CWT vs. Kripashankar Dayashanker Worah (1971) 81 ITR 763 (SC) cited by the learned counsel for the assessee at p. 768 the Hon'ble Supreme Court has observed as under : "It is true that a taxing provision must receive a strict construction at the hands of the Courts and if there is any ambiguity a benefit of that ambiguity must go to the assessee. But that is not the same thing as saying that a taxing provision should not receive a reasonable construction. If the intention of the legislature is clear and beyond doubt then the fact that provision could have been more artistically drafted cannot be a ground to treat and part of a provision as otiose. If the construction contended for and on behalf of the respondent is accepted then a part of s. 21(1) would become otiose. So long as the intention of the legislature is clear and beyond doubt, the Courts have to carry out that intention." 28. In the case of Addl. CIT vs. Surat Art Silk Cloth Manufacturers Association (supra), relied upon by the learned counsel for the assessee, the observation of the Court is at p. 17 to the effect : "It is true that the consequences of a suggested construction cannot alter the meaning of a statutory provision where such meaning is plain and unambiguous, but they can certainly help to fix its meaning in case of doubt or ambiguity. ......." In continuation with the same discussion the Hon'ble Court observes on p. 19 of the report that - "The construction contended for on behalf of the Revenue would thus have the effect of rendering s. 11, sub-s. (4), totally redundant after the enactment of s. 13(1)(bb). We do not think we can accept such construction which renders a provision of the Act superfluous and reduces it to silence. If there is one rule of interpretation more well settled than any other, it is that if the language of a statutory provision is ambiguous and capable of two constructions, that construction must be adopted which will give meaning and effect to the other provisions of the enactment rather than that which will give none." 29. When we apply the above-mentioned principles of interpretation of statute to the provisions contained in ss. 194A to 206C and s. 221 quoted by us in the preceding part of this order, we find that if the contentions of the learned counsel for the assessee are accepted, it would render not merely one sub-section or a clause of a section or even one full section otiose, but would make the entire scheme contained in ss. 190 to 206C redundant. We may notice that the scheme behind these sections is that the legislature laid down that even while some payments by way of income are being made to a payee, an obligation is cast upon the payer to deduct tax at source at the rates in force.
The person paying the tax is not given an option to determine the income or loss which may be earned or sustained by the payee in that current year. Thereafter certain exceptions are provided e.g., in the proviso to s. 194A. But for that also an affidavit has to be filed, or a statement in writing is to be given, a declaration has to be made.
Even for these exceptions, a company, as is the case before us, was not included in the financial years relevant for these appeals. This would mean that the legislature consciously did not want a company to be saved from the scheme of deduction of tax at source, while receiving interest income. Even if those requirements are fulfilled by the payee, his filing of an affidavit or a statement in writing and getting it verified by member of Parliament or State legislature, etc. is mandatory and that too could be done only if the payee was a person other than a company or a registered firm. If we accept the contentions of the assessee, these provisions are rendered otiose. Further, the provisions of sub-s. (3) and sub-s. (4) of s. 194A would become redundant. Similarly, s. 197(1) permits a person who is required to deduct tax at source under various provisions from ss. 192 to 195, not to deduct the tax at source or to deduct it at any lower rate only if, on an application made by the payee to give him such a certificate the ITO is satisfied that the total income of the recipient justifies the deduction of income tax at lower rate or no deduction of tax and only when the ITO issues such a certificate and according to sub-s. (2) of s. 197 when such a certificate is given to the person responsible for deduction of tax at source. Further, in the case of a company, even the ITO was not authorised to issue a certificate for not deducting the tax at source or for deducting it at a lower rate. However, if the contentions of the learned counsel for the assessee are accepted, it would mean that at the time of making payment of interest or crediting interest to the account of a company, the payer is at liberty to determine for himself whether the company to whom he is making the payment would have a taxable income or would have the benefit of brought forward losses, etc., and then may decide not to deduct the tax at source and claim that this defiance of specific provisions of s.
197(1) and (2) was bona fide and in good faith. If that were so, there was no necessity at all to bring provisions of s. 197(1) and (2) on the statute book. It need not be mentioned that automatically sub-s. (3) of s. 197 also becomes redundant. Further, the interpretation given by the learned counsel for the assessee would lead to the inference that the introduction of s. 197A w.e.f. 1st June, 1982, was a superfluous exercise done by the legislature. We noticed from those provisions that s. 197A relieves the hardships in the case of individuals only and those too who were residents in India and only if they gave a declaration in writing in duplicate in the prescribed form and verified in the prescribed manner that their estimated total income of the previous year will be less than the minimum liable to income-tax. Even in such a case the person responsible for deducting tax at source was required to deliver a copy of such declaration to the CIT before the seventh day of the month next following the month in which the declaration is furnished to him. It may again be noticed that even this newly inserted provisions do not allow a payer to make payment without deduction of tax at source to a company. Even in the case of an individual lot of formalities have to be followed. According to the arguments advanced on behalf of the assessee and material on record, it would mean that where the assessee made the payments to GESCO on e.g., 20th September, 1977, of an amount of interest at Rs. 14,29,590. The GESCO filed its return of income for the asst. yr. 1979-80 only on 27th June, 1979, because its accounting year ended on 30th June, 1978.
Further as per the information supplied by the assessee collected from the GESCO, the assessment order of the company for the asst. yr.
1979-80 was made on 27th September, 1982. It is stated to be assessed at a loss of about Rs. 8.82 crores. If we accept the arguments of the learned counsel for the assessee it would mean that we should ignore all the provisions of the IT Act and the authority given to the ITO and should permit the assessee to have a foresight as on 20th September, 1977, to know that when the GESCO would file its return of income on 27th June, 1978, and when the assessment of that company would be made on 27th September, 1982 i.e., almost full five years after the date when the deduction of tax was to be made, the assessed figure would be a loss and on that basis permit GESCO to retain the amount of Rs. 14,29,590 with it for these five years when perhaps the refund should have been allowed after five years. Besides, the fact that such a thing cannot be permitted then, yet, another factor which has to be considered, viz., according to the provisions of s. 80 of IT Act, the benefit of carrying forward of losses could not be allowed to an assessee if the return of income was not filed within the time allowed under various provisions of the IT Act. At this stage we may also mention that the total payments made by the assessee for the period relevant for asst. yr. 1979-80 in the case of GESCO in respect of interest from which tax should have been deducted at source was about Rs. 52.89 lakhs from which tax of about Rs. 10.84 lakhs should have been deducted. For the asst. yr. 1980-81 it was about Rs. 41.45 lakhs from which tax at about Rs. 8.49 lakhs should have been deducted.
Further, for the asst. yr. 1981-82 the deductions were made from 26th September, 1979, to 26th June, 1980. The returns were filed by GESCO on 26th June, 1981. The assessment was made at Nil after allowing the benefit of carrying forward of losses on 20th April, 1984. We are supposed to believe that as on 26th September, 1979, while the assessee was required to deduct tax at about Rs. 1.76 lakhs and pay the Government account within about seven days, the assessee knew that GESCO will file its return of income within the time allowed under s.
139 i.e., by 26th June, 1981, and that when the assessment is framed on 30th April, 1984, the income shall be assessed at nil by giving the payee the benefit of carried forward loss. It is obvious that this would be a more absurd interpretation of these provisions than the one which is canvassed on behalf of the assessee to the effect that it would be absurd if the assessee deducts the tax at source which is ultimately refunded by the Government to the payee. According to us, it is clear from the various provisions of the Act particularly which we have quoted above that the legislature required that any company which is to receive some income by way of interest cannot receive it unless the tax is deducted at source and that its information should reach the IT Department within a short time. When the assessee files its return of income it may claim the credit for such tax which has been deducted at source and if the deduction of tax at source or advance payment of tax has been higher than the assessed tax, the surplus shall be refunded to it. During this period the Government would have the benefit of retaining this amount with it. Further, as can be gathered from the other provisions which we have quoted above, that the scheme of these sections enables the IT Department to have proper information about the payments and receipts of amounts which bear the character of income. It may also enable the IT Department to ensure that the persons who have got receipts of income, disclose it before the IT Department even if it is for the purpose of getting a refund. We may repeat that if a person making the payment is given the authority to deduct or not to deduct the tax at source merely on the basis of his own discretion or on the basis of some oral or even written correspondence with the payee, there would be no necessity at all to keep the provisions of ss.
192 to 206C on the statute book much less the rules pertaining to these provisions of the Act. We have quoted from the judgment of the Hon'ble Supreme Court in the case of CWT vs. Kripashankar Dayashankar Worah (supra) and some other cases where the apex Court has not approved of accepting an interpretation which would render even one sub-section otiose. If we accept the arguments of the learned counsel for the assessee, as discussed above, we may have to hold that all these sections are otiose. In our opinion, the intention of the legislature is clear and beyond doubt regarding the deduction of tax at source in the cases enumerated between ss. 192 to 195 and we have to carry out that intention irrespective of the fact whether those provisions are fair or unreasonable.
30. At this stage we may also refer to the provisions of s. 201(1A) which, as interpreted by the Hon'ble Bombay High Court in the case of Benette Coleman & Co. (supra) come into force and the liability arises immediately upon each default and has to be computed with reference to the law. Further that the provisions are mandatory and that they are not penal provisions. Again when we consider the arguments of the learned counsel for the assessee to the effect that the interest under s. 201(1A) has to be computed from the date when the tax was deducted to the date when the tax was actually paid and that since the assessee did not deduct and pay the tax at all, no interest can be computed as per the ratio of decision of the Hon'ble Supreme Court in the case of B. C. Srinivasa Setty (supra), we find that it would be leading to very unfair and unreasonable results. Its results would be that a person who fails to deduct the tax in time or after deducting it fails to pay the tax so deducted in the prescribed time but deducts and pays it after a little over two months after the prescribed time to the Government treasury, shall be liable to pay interest under s. 201(1A) for this period of two months. On the other hand, a person like the assessee-company who does not deduct tax at source with impunity to the tune of about Rs. 32 lakhs and is discovered to have committed the default after several years can get away from the liability of paying this interest under s. 201(1A) because he has not actually deducted and paid the tax and the interest under s. 201(1A) could not be computed as there was no actual date of payment. In our opinion, this would be a very unreasonable interpretation and unfair to a person who partly complies with law as compared to a person who totally defies it. Hence, we approve that the interpretation given by the CIT(A) to the effect that the date determined by him for making the payment of tax, which the assessee was required to deduct at source, becomes the initial date for charging interest under s. 201(1A). Thereafter, it remains a continuing default and continues till the tax is actually paid by the defaulter or till the AO assessing the payee determines that no tax, is payable by that assessee or orders a refund to be given to that payee-assessee, or as GESCO in this case. Again, if the interpretation given by the learned counsel for the assessee is accepted, all provisions in the IT Act relating to refund would become superfluous because every person who deducts the tax at source which is ultimately refunded on the assessment of payee, will be free for not deducting the tax at source and, as canvassed by the learned counsel for the assessee, when the assessment of the payee is made, again on the basis of provisions of s. 205, it would be the liability of the payee-assessee to make the payment of tax and there would be no necessity of allowing any refund to that assessee.
31. As already mentioned by us, all these provisions regarding refund, being left to the sweet will of the payers contemplated in ss. 192 to 195 and accordingly making most of the provisions regarding refund contained in ss. 237, 238 and 239 of the IT Act substantially redundant, cannot be allowed.
32. We may further add that the interpretation which the learned counsel for the assessee wants us to accept would also render ss. 190 and 191 redundant. In this context, we may reproduce the provisions of s. 190 & 191 which read as under : 190 "Deduction at source and advance payment. - (1) Notwithstanding that the regular assessment in respect of any income is to be made at a later assessment year, the tax on such income shall be payable by deduction at source or by advance payment, as the case may be, in accordance with the provisions of this Chapter.
(2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of sub-s. (1) of s. 4." "191. In case of income in respect of which provision is not made under this Chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct." A bare reading of these sections makes it clear that irrespective of the fact that a regular assessment in respect of the payee is to be made for a later assessment year, the tax shall be deducted at source in accordance with the provisions of Chapter XVII which contains ss.
192 to 195. Further, these provisions clarify that deduction of tax at source does not absolve the person from his liability of paying income-tax directly on the assessment of his income.
32.1 All these discussions make it abundantly clear that the provisions of s. 201(1A) are mandatory and the liability to pay interest under this section starts the moment the default is committed by not deducting tax at source at the time of payment, etc. or after deducting the tax at source and not paying it to the Government account within the prescribed time. This liability continues till such tax is actually paid. Hence when tax is not deducted and not paid, till it is decided in the case of the payee as to what is the amount of tax to be actually paid by the payee-assessee, the liability to interest for non-payment of tax deductible at source continues. In our opinion, it is only the AO assessing the payee who can decide whether tax is payable or not payable by his assessee and no other person can decide this issue, much less a person who is making the payment in the current year, assessment of which may be made after about five years as in the case before us.
We, therefore, uphold the orders of the learned CIT(A) with regard to his decision pertaining to s. 201(1A) and dismiss the appeals filed by the assessee. The logic behind this decision is that by defying the specific provisions of law viz., s. 194A and 197(1) of the IT Act, the assessee deprived the Government of the money which should have been in its possession soon after the payment of interest was made to the GESCO upto the time when the assessments of that company were made and that amount was adjusted against the taxes assessable on that company. By committing this default, the assessee has to compensate the Government by paying interest according to the provisions of law i.e., s. 201(1A).
33. Now coming to the Department's appeal, as already mentioned, a set of five appeals for asst. yr. 1979-80 to 1983-84 contains objections against the decision of CIT(A) to the effect that the order of the AO dt. 17th July, 1984, was barred by time except in respect of the payment made by assessee on 17th June, 1982, and 28th June, 1982. The learned CIT(A) has based his decision on the ratio decidendi of the Calcutta High Court in the case of Dunlop Rubber (supra) where it has been held that since according to s. 231 of the IT Act (as it existed at the relevant time) no recovery could be made after expiry of two years from the end of the financial year in which that demand was raised the AO could not direct the assessee to pay the tax which was to be deducted at source. Although we find force in the submissions of the learned Departmental Representative that in view of several decisions cited by him, those were not recovery proceedings and hence were not barred by limitation, we have to uphold the order of the learned CIT(A) on another ground. It has been brought on record that the assessments of the GESCO have been completed upto asst. yr. 1983-84 by 24th March, 1987. According to s. 191 : ...... in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct" As pointed out by the learned counsel various High Courts have held that after an assessment order in the case of the payee has been made, the person who was to deduct tax at source, would not be liable to pay the tax and that it shall be payable by that assessee.
Since by now all the assessment of GESCO for the assessment years under appeal have been completed, in spite of the fact that the order of the AO dt. 17th July, 1984, was valid for payments pertaining to asst. yr. 1982-83 which assessment was completed on 7th March, 1986, and asst. yr. 1983-84 which assessment was completed on 24th March, 1987, and in any case, even if those assessments have not been completed, they should now have become barred by time, we hold that now the tax cannot be realised for the assessee before us.
34. Therefore, all the appeals filed by the Revenue in this regard viz.
ITA Nos. 5550, 5552, 5554, 5556 and 5558/Bom/1987 have to be dismissed as infructuous, although when the CIT(A) made the order, he had upheld the order of the AO for asst. yr. 1983-84.
35. In this view of the matter, the appeal filed by the assessee for asst. yr. 1983-84, objecting to the order of the CIT(A) upholding AO's direction to the assessee to pay the tax on amounts paid on 28th June, 1982, and 17th June, 1982, has to be allowed at this stage.
36. So far as Revenue's appeals are concerned against orders of CIT(A) cancelling penalties under s. 201(1) r/w s. 221(1), we find some force in them. We have already quoted from Explanation to s. 221(1) according to which a person does not cease to be liable for penalty merely because, before imposition of penalty, he had paid the tax. Since we have discussed at great length the legal obligations regarding deduction of tax at source, ignorance of which a big company like the one before us could not plead, nor has been able to establish it, we are of the opinion that the CIT(A) was not justified in holding that the assessee was prevented by sufficient cause from deducting the tax at source. Hence, in principle we hold that the AO was justified in imposing the penalties under s. 201(1) r/w s. 221(1) for all the five years under consideration. However, since, according to s.221(2) if the tax in respect of which the penalty was levied has been fully reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded. Since there is no authentic evidence before us in this regard, we restore these issues to the file of the AO who shall verify with reference to the assessments of the GESCO, if after its assessments, it was found that no tax at all was leviable on it and hence, no tax at all was required to be deducted at source, all these penalties shall have to be cancelled. However, if some demand was raised against that assessee although adjusted against any taxes paid by it, in any one of these assessment years, then AO shall be entitled to impose penalty with respect to the demand in that particular assessment year or in those particular assessment years. Therefore, all these appeals, viz., ITA Nos. 5551, 5553, 5555, 5557 and 5559/Bom/1987 may be treated as partly allowed.
37. Before we part, we shall like to mention that we are conscious of the observations of the Hon'ble Madras High Court in the case of CIT vs. L. G. Ramamurthi (1977) 110 ITR 453 (Mad) at 462 and H. A. Shah & Co. vs. CIT (1956) 30 ITR 618 (Bom) which lay down that Tribunal should be slow in changing the decision taken by it on same issue earlier or by other Benches. However, we find support from the principles laid down by the Hon'ble Supreme Court regarding interpretation of law, which appears to have escaped the attention of some of the Benches of the Tribunal, whose orders were cited before us by the learned counsel for the assessee. Moreover, in the case of H. A. Shah & Co. (supra) itself, so also in the cases of Raja Bahadur Visheshwar Singh vs. Seth Mathuradas (1962) 44 ITR 273 (SC), M. M. Ipoh vs. CIT (1968) 67 ITR 106 (SC) and CIT vs. Brijlal Lohia and Mathura Prasad Khemka (1972) 84 ITR 273 (SC), the Supreme Court has taken the view that if there is some fresh material or evidence, justifying the Tribunal to take a different view than what it had taken earlier, it not only can but should take a different view than what which was taken earlier. Further, we have noted that one of the Division Benches of Tribunal in Bombay in the case of Asstt. CIT vs. Vile Parle Sanjivani Co-op. Housing Society, ITA No. 8647/Bom/1988, copy of which has been filed by the learned Departmental Representative, has taken the view that in similar circumstances action to charge interest under s. 201(1A) does not get barred by time on the basis of provisions of s. 231 and the assessee in default is bound to pay interest on not deducting tax at source, Hence we have taken a different view than what was taken in the cases of Salwan Construction Co. (Delhi Bench) and some other cases which were cited before us by the learned counsel for the assessee 38. To sum up, ITA Nos. 4437 to 4441/Bom/1987 filed by the assessee are dismissed. ITA No. 4442/Bom/1987 is allowed.
39. Revenue's ITA Nos. 5550, 5552, 5554, 5556, and 5558/Bom/1987 are dismissed as infructuous. Its ITA Nos. 5551, 5553, 5555, 5557 and 5559/Bom/1987 are partly allowed.