14 December 2013
Traces is calculating Interest u/s 201(1A) on a wrong footing. Section 210(1A) states as under : “(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax 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, - (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. The Traces is calculating interest on month to month basis. E.g. even if TDS was deducted on 31.05.13 and paid on 08.06.13 (due date is 07.06.13), interest is being charged for 2 months instead of 1 month as per statute. Is the calculation of Interest doing by traces correct as per the provision of sec 201(1A)?
14 December 2013
The calculation being done by the Traces is correct and lawful. . The question can be raised about the provision itself. . "month" word in the law is understood as month of the English calender. . Read more at -
15 December 2013
I would like to bought to your notice that Allahabad Highcourt in case of "Commissioner Of Income-Tax vs Laxmi Rattan Cotton Mills Co. Ltd. on 4 April, 1973" (Equivalent citations: 1974 97 ITR 285 All) given decision that month means period of 30 days and not month as per general clause act. however, this decision is given in case of dispute arise in interpretation of Sec 271(1)(a)(i) but in my view same is well applicable for interpretation of month u/s 201 (1A).
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