Section 234B interest cannot be imposed on Payee in case of Failure of Payer to Deduct TDS

HSBC Bank (Mauritius) Ltd. Vs DCIT (International Taxation) (ITAT Mumbai) The issue under consideration is whether penalty interest u/s 234B can be imposed on the payee in case of failure of payer to deduct the tax at source? ITAT states that under this issue the assessee has challenged the levy of interest u/s 234B of the Act. The payer is under obligation to deduct the tax at source and on account of failure of payer to deduct the tax at source, the penalty interest u/s 234B cannot be imposed on the payee. In support of this contention, they relied upon the law settled by Hon’ble Bombay Hi...