Dismissing the appeal of the assessee the Court held that ; Genuine belief that tax was not deductible at source is not relevant .Extra payment to meet costs constitute perquisites.Extra payment to meet costs in Foreign location is not entitled to exemption. Failure to deduct tax and deposit to Govt interest can be Levied.Unlike S.221 , S. 201(1A) is not hedged in by any requirement such as good faith or wilful default. Therefore, for levying interest, mens rea or wilful conduct is wholly irrelevant.( AY. 2001-02 to 2003-04)
Sun Outsourcing Solutions P. Ltd. v. CIT (2018) 407 ITR 480/ 171 DTR 358/ 305 CTR 537 (T&AP) (HC)
S. 201 : Deduction at source – Failure to deduct or pay- Interest is automatic — Genuine belief that tax was not deductible at source is not relevant – Extra payment to meet costs constitute perquisites- Extra payment to meet costs in Foreign location is not entitled to exemption- Failure to deduct tax and deposit to Govt interest can be Levied- Unlike S.221 , S. 201(1A) is not hedged in by any requirement such as good faith or wilful default. Therefore, for levying interest, mens rea or wilful conduct is wholly irrelevant.[ S. 15, 10(14) , 17 , 192 , 221 ]