The AO passed orders under section 201(1) & 201(1A) of the Act making the assessee as an assessee in default and also levied interest on the tax demand. The CIT(A) upheld the orders passed by the AO.The Tribunal rejected the contention of the assessee that a part of the interest charged to the P&L Account has neither been paid nor credited to the customers account, rather credited to the interest payable account and therefore the same is not liable to TDS under section 194A of the Act. However, the Tribunal accepted the contention of the assessee that since the tax was deducted at source at later stage i.e. at the time of maturity, it cannot be said that there was any default in deducting tax at source. The Tribunal further held that the assessee would be liable for interest under section 201(1A) of the Act in respect of the said amount.(AY. 2016-17 to 2019-20)
Wayanad District Co-op. Bank Ltd. v. ITO (TDS) (2023) 200 ITD 500 (Cochin)(Trib)
S. 194A : Deduction at source-Interest other than interest on securities-Assessee in default-The tax deducted was deposited-The assessee could not be treated as assessee in default under section 201(1)-The assessee would be liable to pay interest u/s. 201(1A) of the Act. [S. 201(1) 201(IA)]