JUDGMENT
1. The following question is proposed for admission of the appeal:
Whether, on the facts and circumstances of the case, the Tribunal was justified in law in upholding the order of the Commissioner of Income-tax (Appeals) deleting the interest of Rs. 1,60,105 levied under Section 201(1A) of the Act?
2. The facts are not in dispute that as and when the amount is paid, the tax has been deducted and that has been paid to the Department. The Tribunal has considered this aspect in paras. 6 and 7 of its order. For ready reference, they read as under:
6. We have heard the rival submissions and perused the materials available on record. We find that in this case the learned Commissioner of Income-tax (Appeals) had held that tax at source was to be deducted on the composite contract including on supply of material. The Revenue’s appeals are directed only against the direction of the learned Commissioner of Income-tax (Appeals) for deletion of interest charged under Section 201(1A) of the Act for both the years after due verification of the facts that the recipient had already deducted tax at source in full. The provision of Section 201 provides not only for collection of tax which had not been deducted but for levy and charge of interest also. If the tax had already been paid by the recipient on such income it may not be justified to recover the said amount of tax, but so far as the liability of interest is concerned, that cannot be considered to be non-existent on account of deposit of tax by the recipient at a subsequent or later stage. It was also held by the hon’ble Rajasthan High Court at page 101 in the case of CIT v. Rathi Gum Industries [1995] 213 ITR 98 that the interest is to compensate the Revenue for the loss, which it had suffered on account of late receipt of the tax. The provisions of interest are mandatory and automatic and interest has to be paid from the date on which the tax was deductible till the date on which the tax is actually paid. We may also refer to the decision in CIT v. Dhanalakshmy Weaving Works . In this case, it was held that the purpose of the levy is to claim compensation on the amount which ought to have been deducted and deposited and has not been done by the assessee. The learned authorised representative had relied upon the decision of CIT v. Rishikesh Apartments Co-operative Housing Society Ltd. . In this case, it was held that there was no question of levying any interest on the assessee as the amount which was payable to the Revenue had been duly paid.
7. After perusal of the facts of the case and relevant law as on the subject, we are of the opinion that learned Commissioner of Income-tax (Appeals) had rightly held that interest under Section 201(1A) of the Act was to be deleted after due verification by the Assessing Officer from the enclosures with supporting documents. In all the cases, the recipient of the income had claimed refund, which had arisen due to tax deducted at source. Therefore, we find no infirmity in the order of the learned Commissioner of Income-tax (Appeals) and the same is hereby sustained.
3. When the assessee has paid more tax than the tax payable and refund is due, even tax deducted at source is counted, in such case, there is no justification for charging of interest under Section 201(1A).
4. The appeal stands dismissed at the admission stage.