May 2023
Interest under section 201(1A) – TDS – Interest for delay in remitting tax deducted at source – No liability for interest if tax is not deductible at source.
By K. B. Bhujle, Advocate
Reading Time 3 mins
9 Special Tahsildar, Land Acquisition (General) vs. GOI[2023] 451 ITR 484 (Ker)
Date of order: 15th September, 2022
Section 201(1A) of ITA 1961Interest under section 201(1A) – TDS – Interest for delay in remitting tax deducted at source – No liability for interest if tax is not deductible at source.
Special Tahsildar, Land Acquisition (General) paid compensation to persons from whom the land was acquired for establishing the Government Medical College and deducted tax at source from the compensation paid. The tax deducted in the month of January 2014 was paid to the credit of the Government only in the month of June 2014 and the reason for the delay was explained to be the fact that Tahsildar was deputed for election duty during the period January 2014 to May 2014 in connection with the General Elections. However, the AO levied interest under section 201(1A) of the Income-tax Act, 1961.
The Tahsildar filed a writ petition and challenged the demand for interest.
It was then contended on behalf of the Tahsildar that the liability to deduct tax and pay it to the Department is only in respect of sums for which the tax is required to be deducted at source. Since the lands which were the subject matter of acquisition were agricultural lands, which fell outside the definition of capital asset under section 2(14) of the Act, there was no question of deducting tax at source in respect of c
