Case Law Details
Medicare TPA Services India Pvt. Ltd. Vs ACIT-TDS (ITAT Kolkata)
Interest u/s 201(1A) of the Act could be charged only upto the date of payment of taxes by the deductees and not upto the date of filing of return of income.
We find lot of force in this argument of the ld AR in as much as the interest u/s 201(1A) of the Act is only compensatory in nature and the Government should be compensated for the delayed remittance of TDS from the date of default by the deductor to the actual date of remittance of taxes by the deductees.
The ld AR further argued that since the ld AO had held that the assessee is not to be treated as an ‘assessee in default’ u/s 201(1) of the Act. Having held so, he ought not to have charged interest u/s 201(1A) of the Act. In this regard, we find that the provisions of section 201(1A) of the Act are independent of section 201(1) of the Act inasmuch as it starts with ‘Without Prejudice to the provision of sub-section(1), There is no choice available to the revenue and interest u/s 201(1A) of the Act is to be mandatorily charged for the delayed period of remittance and is automatic in nature. It is not in dispute before us that the tax is required to be deducted by assessee TPA on payments made to hospitals. Hence we are not inclined to agree with the argument of the ld AR in this regard. Hence we hold that the ld AO had rightly levied interest u/s 201(1A) of the Act in the instant case. With regard to the calculation of interest u/s 201(1A) of the Act, we have already directed the ld AO to re-compute the said interest upto the date of actual remittance of taxes by the deductees and not upto the date of filing of return of income by the deductees.
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