Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court
3 years, 6 months ago

Assessee Not Liable To Pay Interest On Short Payment Of Advance Tax Due To Default Of Payer In Deducting TDS Before 2012-2013 FY : Supreme Court

Live Law  

The Supreme Court has held that the amount of income tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax before 2012-2013 Financial Year.Therefore, the assessee cannot be held liable for interest under Section 234B of Income Tax for short-fall of advance tax which arises due to reducing the income tax deductible or collectible at. The Supreme Court has held that the amount of income tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax before 2012-2013 Financial Year. The High Court had observed that interest under Section 234B of the Act cannot be imposed on an assessee for failure on the part of the payer in deducting tax at source, when Section 201 provides for consequences of failure to deduct tax at source or failure to pay the tax after making deduction Analysis by Supreme Court At the outset, the Court observed that the conundrum before it concerns the liability of an assessee to pay interest on short payment of advance tax due to default of the payer in not deducting tax at the time of payment, under the provisions of the Income-tax Act, 1961 Referring to Section 209 of the Act, the Court noted that the calculation of the advance tax is to be reduced by the amount of income-tax which would be deductible or collectible at source during the said financial year. To give the intended effect to the proviso, Section 209 of the Act has to be understood to entitle the assessee, for all assessments prior to the financial year 2012-13, to reduce the amount of income- tax which would be deductible or collectible, in computation of its advance tax liability, notwithstanding the fact that the assessee has received the full amount without deduction".

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History of this topic

Tax Weekly Round-Up: February 10 - February 16, 2025
1 month ago

Tax Weekly Round-Up: February 10 - February 16, 2025

Live Law  

NEW INCOME TAX BILL New Income Tax Bill 2025: Concept Of "Tax Year" To Be Introduced Instead Of "Assessment Year", "Financial Year" To Remain Unchanged The new Income Tax bill is set to introduce the concept of 'Tax Year'. In such circumstances, the provisions of Section 21 of the Act would not be applicable and the period of limitation would …

S.144C IT Act | AO Not Having Info About Pending Objections Before Dispute Resolution Panel No Grounds To Sustain Final Assessment Order: Delhi HC
3 months ago

S.144C IT Act | AO Not Having Info About Pending Objections Before Dispute Resolution Panel No Grounds To Sustain Final Assessment Order: Delhi HC

Live Law  

The Delhi High Court has made it clear that a Final Assessment order passed by the Income Tax Authorities under Section 143 of the Income Tax Act, 1961 is not sustainable, if it is passed in ignorance of pending objections before the Dispute Resolution Panel. It said, “.notwithstanding the lack of information with the AO, if an objection has been …

Department Can't Deny Grant For Waiver Of Interest U/S 234C Of IT Act Without Disposing Of Issues Flagged By Taxpayer: Bombay High Court
4 months ago

Department Can't Deny Grant For Waiver Of Interest U/S 234C Of IT Act Without Disposing Of Issues Flagged By Taxpayer: Bombay High Court

Live Law  

The Bombay High Court recently clarified that the Chief Commissioner of Income Tax ought to have addressed the issues/justification as flagged by the taxpayer in supporting its case for grant of waiver of interest u/s 234C. Observations of High Court: From perusal of the application of petitioner for waiver of interest u/s 234C addressed to the respondent/ Revenue, the Bench …

When Is Action For Imposition Of Penalty 'Initiated' U/S 271C Of Income Tax Act For Failure To Deduct Tax At Source: Delhi HC Explains
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4 months, 1 week ago

When Is Action For Imposition Of Penalty 'Initiated' U/S 271C Of Income Tax Act For Failure To Deduct Tax At Source: Delhi HC Explains

Live Law  

The Delhi High Court recently explained when an action for imposition of penalty under Section 271C of the Income Tax Act, 1961 can be said to have been “initiated”. At the outset, the High Court noted that when a penalty proceeding can be stated to be initiated is squarely covered in favour of the assessee by Principal Commissioner of Income …

Bank Charges & Bank Guarantee Charges Wrongly Included As Interest: ITAT
7 months, 3 weeks ago

Bank Charges & Bank Guarantee Charges Wrongly Included As Interest: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that bank charges and bank guarantee charges do not partake in the character of interest and had been wrongly included as interest while making disallowance under section 14A of the Income Tax Act.The bench of G.S.Pannu and Kul Bharat has observed that the assessee had disallowed the. The Delhi Bench …

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT
10 months, 2 weeks ago

Interest Not Leviable From Assessee For Short Payment Of Tax Due To Payer's Default In Deducting TDS Before FY 2012-2013: ITAT

Live Law  

The Delhi Bench of Income Tax Appellate Tribunal has held that since the assessee was a non-resident, the entire tax was to be deducted at source on payment made by the payer to it, and there was no question of advance tax payment by the assessee; accordingly, no interest under Section 234B could be levied upon the assessee.The bench of …

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT
10 months, 3 weeks ago

Assessee Is Eligible For Credit Of TCS Paid U/S 194Q If There Is No Shortfall In Payment Of TDS: Vishakhapatnam ITAT

Live Law  

On finding that there is no short fall of TDS and the assessee is eligible to get credit of the entire amount, the Visakhapatnam ITAT directed the AO to grant credit of the entire amount deducted as tax at source u/s. The Bench noted that Kaccha Arahtias turnover includes only the gross commission and not the sales effected on behalf …

Interest Paid On Loan Taken To Invest In Shares Of Subsidiary In Normal Course Of Business Activities Is Allowable Expenditure: Bombay High Court
1 year, 1 month ago

Interest Paid On Loan Taken To Invest In Shares Of Subsidiary In Normal Course Of Business Activities Is Allowable Expenditure: Bombay High Court

Live Law  

The Bombay High Court has held that if an assessee for commercial expediency and in the normal course of its business activities takes loan to invest in shares of its subsidiary, the interest paid on these advances utilised is allowable expenditure under Section 36 of the Income Tax Act.The bench of Justice K. R. Shriram and Justice Neela Gokhale has …

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT
1 year, 1 month ago

No Question Of Invoking Sec 201(1)/201(1A) if Taxpayer Has Deducted TDS At Appropriate Rates: Rajkot ITAT

Live Law  

Noting that assessee has also furnished tabular chart along with supporting documents to demonstrate that TDS at appropriate rates has been deducted on such trade discount / commission given to it's agents, the Rajkot ITAT held that assessee cannot be held as in default for not deducting TDS. The Division Bench of Waseem Ahmed & Siddhartha Nautiyal observed that “the …

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT
1 year, 1 month ago

Voluntary Disallowance Of Expense U/s 40(A)(ia) Is No Basis To Treat Taxpayer As 'Assessee In Default' U/s 201(1): Delhi ITAT

Live Law  

On finding that voluntary disallowance of expense u/s 40 of the Income Tax Act is not a ground to treat the assessee as 'assessee in default' u/s 201, the Delhi ITAT deleted the addition of chargeable interest u/s 201 as well as the treatment of 'assessee in default' u/s 201. The Bench comprising Anubhav Sharma and M. Balaganesh observed that, …

Section 234B Interest Has To Be Charged On The Assessed Income And Not On The Returned Income: Jharkhand High Court
1 year, 5 months ago

Section 234B Interest Has To Be Charged On The Assessed Income And Not On The Returned Income: Jharkhand High Court

Live Law  

The Jharkhand High Court has held that interest under Section 234B of the Income Tax Act has to be charged on the assessed income and not on the returned income.The bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan has observed that, as per Section 234B, interest has to be charged on an amount equal to the assessed tax or, …

Tax Not Payable On Interest Accrued On FD Which Is Subject To CBI’s Prohibitory Order: ITAT
1 year, 5 months ago

Tax Not Payable On Interest Accrued On FD Which Is Subject To CBI’s Prohibitory Order: ITAT

Live Law  

The Bangalore bench of the Income Tax Appellate Tribunal has held that tax is not payable on interest accrued on FD, which is subject to the CBI’s prohibitory order.The bench of Madhumita Roy and Chandra Poojari has observed that the lower authorities have committed an error in bringing the interest accrued on FD, which is subject to a. The Bangalore …

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT
1 year, 10 months ago

Department Can Bring Expenditure Incurred In Earlier Years To Be Taxed In Subsequent Years On Grounds Of Bogus Expenditure: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has observed that the department can bring expenditures incurred in earlier years to be taxed in subsequent years on grounds of bogus expenditure.The bench of B. R. R. Kumar has observed that the department can bring the expenditure incurred in the earlier years to be taxed in the subsequent years if …

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court
2 years ago

TDS Not Deposited By Employer, Can’t Be Adjusted Against Future Refund Due To Assessee: Delhi High Court

Live Law  

The Delhi High Court has ruled that the revenue department cannot adjust the withheld tax which has not been deposited by the deductor in the Central Government Account, against the refund due and payable to the deductee/assessee. The bench of Justices Rajiv Shakdher and Tara Vitasta Ganju held that adjustment of demand against future refund amounts to an indirect recovery …

Directors Not Negligent; Wrong Invocation Of Section 179 IT Act: Gujarat High Court
2 years, 2 months ago

Directors Not Negligent; Wrong Invocation Of Section 179 IT Act: Gujarat High Court

Live Law  

The Gujarat High Court has ruled that the Directors of the assessee company cannot be held negligent merely because they failed to deposit before the Assessing Officer 20% of the demand raised, so as to seek stay of demand during the pendency of an appeal before the CIT. Thus, the Court held that jurisdiction under Section 179 of the Income …

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court
2 years, 4 months ago

Interest Not Leviable For Belatedly Deducting TDS If There Is No Liability: Kerala High Court

Live Law  

The Kerala High Court has held that where there is no liability to deduct TDS, the mere fact that TDS was so deducted and paid to the Income Tax Department belatedly, cannot give rise to a claim for interest under Section 201 of the Income Tax Act.The single bench of Justice Gopinath P. has observed that the delay in remitting …

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT
2 years, 4 months ago

Liability To Deduct TDS Under Section 201 of Income Tax Act Is A Vicarious Liability, Which Ends With Discharge Of Principal Liability Of Recipient Of Income: ITAT

Live Law  

The Mumbai bench of the Income Tax Appellate Tribunal has ruled that the liability to deduct tax at source under Section 201 read with Section 195 of the Income Tax Act, 1961, is a vicarious liability of the payer of an income and thus, the liability to deduct TDS ceases to exist when the primary liability of the recipient of …

Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT
2 years, 7 months ago

Interest Payment On Late Payment Of TDS Not Eligible For Deduction Under Business Expenditure: ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal has held that interest payment on late payment of TDS is not an eligible business expenditure for deduction and it is not compensatory in nature. The two-member bench of A. D. Jain and Dr. B. R. R. Kumar has observed that the payment of interest on late deposit of TDS levied …

Amendment To Section 36(1)(va) Of Income Tax Act Is Prospective In Nature: Delhi High Court
2 years, 7 months ago

Amendment To Section 36(1)(va) Of Income Tax Act Is Prospective In Nature: Delhi High Court

Live Law  

The Delhi High Court has allowed the assessee- TV Today Network Ltd.'s claims for deduction of expenses in nature of 'consumption incentive' offered to the advertisers for booking more The Bench, consisting of Justices Manmohan and Manmeet Pritam Singh Arora, reiterated that the 'due date', in case of delay by the assessee in depositing the employees' contribution to Provident Fund …

Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court
2 years, 8 months ago

Explanation To Section 14A Of Income Tax Act Will Not Apply Retrospectively: Delhi High Court

Live Law  

The Delhi High Court has ruled that the Explanation to Section 14A of the Income Tax Act, 1961, added vide the Finance Act, 2022, cannot be presumed to be retrospective in nature since it is clarificatory in nature and alters the law as it stood earlier. The revenue department submitted before the High Court that the ITAT had relied on …

Underreporting Of Income Due To Re-Computation Of Disallowance By The AO, Does Not Amount To Misreporting Of Income: Delhi High Court
2 years, 9 months ago

Underreporting Of Income Due To Re-Computation Of Disallowance By The AO, Does Not Amount To Misreporting Of Income: Delhi High Court

Live Law  

The Delhi High Court has ruled that where the underreporting of income allegedly done by the assessee is due to the re-computation of the disallowance under Section 14A of the Income Tax Act, 1961 by the Assessing Officer, it would not amount to misreporting of income. The revenue department levied a penalty on the assessee Prem Brothers Infrastructure LLP under …

Assessee Deprived Of Refund Due To Wrongful Withholding Of Amount By Income Tax Dept.: Bombay High Court Imposes 6% Interest
2 years, 10 months ago

Assessee Deprived Of Refund Due To Wrongful Withholding Of Amount By Income Tax Dept.: Bombay High Court Imposes 6% Interest

Live Law  

The Bombay High Court bench of Justice S.G. Mehare and Justice R.D. The petitioners contended that because 120 days had already passed, they were entitled to interest under Section 132 of the Income Tax Act of 1961. The department was liable to pay interest at the rate of 6% p.a., which shall run from the date immediately following the expiry …

Monthly Digest Of Tax Cases- April 2022
2 years, 10 months ago

Monthly Digest Of Tax Cases- April 2022

Live Law  

Indirect Taxes Supreme Court 1.Plea In Supreme Court Challenges The Constitutional Validity Of Levy Of GST On Lease/ Rent Payments Case Title: Myrayash Hotels Pvt. 2.Show Cause Notice Completely Deficient In Material Particulars: Delhi High Court Quashes GST Registration Cancellation Order Case Title: Fada Trading Private Limited Versus Commissioner Goods and Service Tax Citation: 2022 LiveLaw 328 The Delhi High …

No Wilful Evasion Of Tax - Madras High Court Quashes Prosecution Under Section 276C (2) Of Income Tax Act
2 years, 11 months ago

No Wilful Evasion Of Tax - Madras High Court Quashes Prosecution Under Section 276C (2) Of Income Tax Act

Live Law  

The Madras High Court has ruled that prosecution under Section 276C of the Income Tax Act for wilfully attempting to evade payment of tax cannot be initiated against an assessee who merely defaults to pay tax on time under the Act. The Counsel submitted that mere delay in payment of tax without an intention to evade tax would not constitute …

Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT
3 years ago

Non-Deduction of TDS At The Year End As The Amount Payable Was Not Identifiable: Penalty not justifiable- ITAT

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal, consisting of Kul Bharat and R.K. Panda, upheld the CIT order, holding that the mere fact that taxes were not deducted on the year end provision but were deducted and deposited upon crystallisation of liability to pay the expenses does not automatically justify the imposition of a penalty under section 271C …

Belated Deposit Of PF And ESI Contribution Of Employees Cannot Be Added To Employer's Taxable Income: ITAT Delhi
3 years ago

Belated Deposit Of PF And ESI Contribution Of Employees Cannot Be Added To Employer's Taxable Income: ITAT Delhi

Live Law  

The Single Bench of Delhi ITAT, consisting of judicial member Kul Bharat, has ruled that belated payment of employees' contribution to the Provident Fund and State Insurance Scheme cannot be added to the employer's taxable income as deemed income, if the said deposits are made before the due date of filing the income tax return under the Income Tax Act, …

Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates
3 years ago

Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates

Live Law  

The Supreme Court has reiterated that Banks are exempted from the mandate of Section 194A of the Income Tax Act, 1961, to deduct tax at the source, on payment of interest to corporations established by a statute. In the facts of the present case, the Apex Court held that in terms of the notification dated 22.10.2022 issued by the Central …

Deadline for ITR filing extended but doesn't provide relief from interest penalties
3 years, 7 months ago

Deadline for ITR filing extended but doesn't provide relief from interest penalties

India Today  

The pandemic led the Government of India to provide relief by extending the ITR filing for the financial year 2020-21 till September 30, 2021. Here are the details of the penal interest to be paid on the extension of the ITR filing date: The interest rate will be charged by 1% every month on the outstanding tax amount as per …

Plea to scrap TDS on compensation to accident victims
5 years, 11 months ago

Plea to scrap TDS on compensation to accident victims

Live Mint  

A petition was filed in the Delhi High Court on Monday seeking quashing of a provision which mandates deduction of tax on the interest accrued upon the award or compensation granted by Motor Accident Claim Tribunal to the accident victims. The plea was filed by advocate Amit Sahni, who has sought quashing of Section 194A of the Income Tax Act, …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

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