Section 201 - interest on late payment of tds

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karan (Querist)
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20 November 2012 Can interest (under section 201 proceedings and not 234A/B/C) be charged on incomes that has been bought under the tax net by a way of retrospective ammendment?

CA SAYANTAN BASU

CA SAYANTAN BASU (Expert)
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21 November 2012 Dear sir ,

I dont think that section 201 will be applicable in this case .Suppose the dividend is exempt in the hands of receiver u/s 33 but now suppose w.e.f 2000-01 retrospective effect the dividend becomes taxable in the hands of receiver . So tax has to be taxable but interest cannot be charged .....
The section 201 states that :

1) If any such person and in the cases referred to in section 194, the principal officer and the company of which he is the principal officer does not deduct or after deducting fails to pay the tax as required by or under this Act, 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 .So for applying the section the AO HAS TO PROVE THAT THE DEDUCTOR HAS LAIBILITY TO DEDUCT THE TAX BUT HE DID NOT DO IT .......THEN ONLY SECTION 201 CAN BE CHARGED .....IN THE PREVIOUS YEAR IF HE DOES NOT LIABILITY TO DEDUCT TAX THEN IF THE LAIBILITY IN THIS YEAR THEN SECTION 201 WILL BE APPLICABLE ONLY WHEN IF HE DOES NOT DEDUCT THE TAX IN THIS YEAR / OR DEDUCTED TDS BUT DID NOT DEPOSIT THE TAX TO THE DEPT IN THIS YEAR ........

HOPE THIS WILL SOLVE YOUR QUERY ........