Appeal Details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 1227 (ITAT-JABALPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 year(s) 6 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-06-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2008-2009
Appeal Filed On
14-12-2017
Judgement Text
1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (Through web-based video conferencing platform) BEFORE SHRI SANJAY ARORA, HON‘BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER I.T.A. No. 69 to 71/JAB/2017 (Asst. Years: 2008-09, 2009-10 & 2011-12) Appellant by : Shri Abhijeet Srivastava, Advocate Respondent by : Shri S.K. Halder, Sr. DR Date of hearing : 30/03/2022 Date of pronouncement : 27/06/2022 O R D E R Per Bench This is a set of three Appeals by the Assessee for three years agitating the order dated 28/9/2017 by the Commissioner of Income-tax (Appeals)-13, Ahmedabad ( ̳CIT(A)‘ for short) dismissing it‘s appeals challenging it‘s assessments under sections 201(1) and 201(1A) of the Income Tax Act, 1961 ( ̳the Act‘ hereinafter) dated 21/12/2016 for assessment years (AYs.) 2008-09, 2009-10 & 2010-11. 2. Opening the arguments for and on behalf of the assessee, it was submitted by Sh. Srivastava, the ld. counsel for the assessee, that the short, common question of law arising in these appeals by the Assessee, is as to whether the fact of it being deemed to be in-default u/s. 201(1) is a condition precedent for being deemed to be Project Director National Highway Authority of India (NHAI), Project Implementation Unit, Sagar. [TAN: JBPO 00193 E] vs. ITO (International Taxation and Transfer Pricing), Bhopal (Appellant) (Respondent) ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 2 in-default u/s. 201(1A) of the Act? Per contra, or, to put differently, whether being not deemed to be in-default u/s. 201(1) would by itself result in being not deemed to be in-default u/s. 201(1A) of the Act? The said two questions, which are in pari materia and define the controversy arising in these appeals, he would add, is no longer res integra, and stands recently clarified by the Hon‘ble jurisdictional High Court. He would then take us through the relevant part of it‘s order in WP No. 19315/2017, dated 11/02/2020 (copy on record), in which the assessee is impleaded as a respondent. The Hon‘ble Court has therein clearly stated that there could be no liability to interest u/s. 201(1A) in the absence of the assessee- ,respondent being deemed to be default u/s. 201(1), which is so in view of the fact that payee-company, the petitioner before the Hon‘ble Court, having been assessed at a loss for the relevant years. He was then asked by the Bench to refer to the two decisions referred to and relied upon by the Tribunal in the first round; the present being the second round before it. In CIT vs. Eli Lilly & Co. (India) Pvt. Ltd. [2009] 312 ITR 225 (SC), the relevant part of which, read out during hearing, reads as under: (pg. 251) ―(iii) On the Scope of section 201(1) and section 201(1A): 34. A perusal of section 201(1) and section 201(1A) shows that both these provisions are without prejudice to each other. It means that the provisions of both the sub-sections are to be considered independently without affecting the rights mentioned in either of the sub-sections. Further, interest under section 201(1A) is a compensatory measure for withholding the tax which ought to have gone to the exchequer. The levy of interest is mandatory and the absence of liability for tax will not dilute the default. The liability of deducting tax at source is in the nature of a vicarious liability, which pre-supposes existence of primary liability. The said liability is a vicarious liability and the principal liability is of the person who is taxable. A bare reading of section 201(1) shows that interest under section 201(1A) read with section 201(1) can only be levied when a person is declared as an assessee-in-default. For computation of interest under section 201(1A), there are three elements. One is the quantum on which interest has to be levied. Second is the rate at which interest has to be charged. The third is the period for which interest has to be charged. The rate of interest is provided in the 1961 Act. The quantum on which interest has to be paid is indicated by section 201(1A) itself. Sub-section (1A) specifies "on the amount of such tax" which is mentioned in sub- section (1) wherein, it is the amount of tax in respect of which the assessee has been declared in default. The object underlying section 201(1) is to recover the ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 3 tax. In the case of short deduction, the object is to recover the shortfall. As far as the period of default is concerned, the period starts from the date of deductibility till the date of actual payment of tax. Therefore, the levy of interest has to be restricted for the above stated period only. It may be clarified that the date of payment by the concerned employee can be treated as the date of actual payment.‖ (emphasis, ours) Similarly, in Hindustan Coca-Cola Beverages Pvt Ltd. vs. CIT [2007] 293 ITR 226 (SC), the Apex Court clarified that the interest liability u/s. 201(1A) and indeed penalty u/s. 271C would survive the assessee being not deemed to be in default u/s. 201(1) on account of the payment of tax by the payee inasmuch as tax could not be collected twice over. Yes, without the assessee being deemed to be in default and a liability u/s. 201(1) arising, there could be no liability toward interest u/s. 201(1A), though there could well be circumstances where a liability u/s. 201(1A) may arise and subsist independent of the liability u/s. 201(1). Rather, as it appears from the facts of the case, the assessee is not deemed to be in default only for the reason of it having since discharged it‘s liability to tax deductible at source u/s. 201(1) for each of the years under reference by payment of tax so demanded, so that the question afore-stated, stated as arising by Sh. Srivastava and, further, of it having been answered by the Hon‘ble jurisdictional High Court, whose decision is binding on us, may not be the case. The same though providing a glimpse of the matter, the facts of the case leading to the instant appeals were then gone through. 3. It may at this stage be relevant to recount the background facts of the case. The assessee, an authority constituted under a Central Act, for development and maintenance of national highways in India, issued contracts for the construction of a four way lane in the State of Madhya Pradesh to M/s. IJM Corporation Ltd. (IJM), a non-resident company. Payments under the said contract were made to it by the assessee without deduction of tax at source, or even deducting it at the lower rate/s, i.e., as specified in the tax deduction certificate/s obtained by IJM (the payee-company), for periods prior to the date/s from which the certificate/s was effective. The assessee was accordingly deemed to be in-default, both for the tax ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 4 short deducted, as well as for the interest for the period over which the shortfall obtained, i.e., u/s. 201(1) and s. 201(1A) of the Act respectively, which provisions read as under: 201. (1) Where any person, including the principal officer of a company,— (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1A) of section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: Provided that no penalty shall be charged under section 221 from such person, unless the Assessing Officer is satisfied that such person, without good and sufficient reasons, has failed to deduct and pay such tax. (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200. Substituted by Finance Act, 2010, w.e.f. 01/7/2010, as under: (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest,— (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200. (emphasis, ours) The assessee paid the demands raised u/ss. 201(1) & 201(1A), though contested the same on the ground that no tax was liable to be deducted as the payee-company had in fact suffered losses for each of the relevant years, i.e., after including the ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 5 income received from the assessee, so that it (payee) was not liable to any tax u/s. 4, toward which the tax deduction at source is, seeking refund of both, the deposit of tax deducted at source (TDS) and interest paid for its delayed deposit. The matter travelled to the Tribunal, which directed the assessee to furnish credible proof of the said loss/es, being the assessment order/s u/s. 143(3); CA certificate/s, for the relevant years. For interest, it was clarified that the same would be leviable for the period beginning the date on which the tax was deductible to the date of its deposit (either by the assessee or even directly by the payee). The matter, with suitable instructions, was restored to the file of the Assessing Officer (AO). In the set aside proceedings, though it is not clear as to which documents were furnished by the assessee, the AO found that, in view of the said loss/es, there was no liability of the assessee toward TDS, so that it could not be deemed to be in-default for the tax deductible at source, i.e., u/s. 201(1) and, consequently, u/s. 201(1A), i.e., toward interest. The tax deductible at source, which, it is a common ground before us, having been subsequently recovered from the payee and deposited with the exchequer, has since been claimed by the payee-company (IJM) through it‘s tax returns for the relevant years. No refund of the interest component paid u/s. 201(1A) was, however, granted to the assessee. While the assessment order/s is silent on this aspect, the appellate order, which is a combined order for all the three years, states that inasmuch as the assessee is not held to be an assessee-in-default, it could not possibly have any grievance, dismissing the assessee‘s appeals on that basis, and which explains the instant appeals. It may be noted that while the ld. CIT(A) observes (at para 5 of his order) of the assessee being not deemed to be in default due to the payee-company‘s income being not taxable in India, the assessee‘s consistent stand, also reflected in the order u/s. 201(1), is of the non- liability to tax deduction on account of the payee having incurred a loss. Meanwhile, as explained by Shri Srivastava, as the assessee had also deducted the interest deposited u/s. 201(1A) from the amounts due to IJM, the latter approached the Hon'ble jurisdictional High Court under it‘s writ jurisdiction (in WP ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 6 No.19315/2017) for directions to issue refund thereof to the assessee, who in turn would repay the same to IJM. The assessee was also impleaded as respondent No.3 (R3), with the Revenue, in the office of the Dy. CIT, New Delhi and Dy. CIT (TDS), Jabalpur, being respondents Nos. 1 & 2 respectively. The Hon'ble Court ruled in it‘s favour, accepting the plea that as there is admittedly, in view of the loss/es incurred by IJM, no liability to deduct tax at source, the assessee (R3) is not deemed to be in-default in respect of TDS, i.e., u/s. 201(1), and could not, accordingly, be deemed to be in-default for interest u/s. 201(1A), which is only compensatory, i.e., to compensate the Revenue for the delayed deposit of TDS with the Central Government. The relevant part of it‘s order dated 11/2/2020 reads as under: ―12. The cumulative reading of the aforesaid provisions leads to the conclusion that where there is no tax liability on the recipient of income, in respect of its entire income including the income paid by the deductor, then in that eventuality, no liability can be fastened on the deductor under section 201(1) of the Act in respect of payments made to the deductee. Once it is held that no liability arises against the deductor under Section 201(1) of the Act, when the deductee had been assessed at loss figure, there is no justification for levy of interest under section 201(1A) of the Act, as the same is consequential in nature. In other words, in a situation where deductee is not required to pay any tax on its income, there is no reason to hold the deductor in default under section 201(1) and 201(1A) of the Act, as deductee is not required to pay any tax on its income, which is, in fact, a loss. 13. xxxxxx 14. xxxxx 15. Still further, the respondent No.1 while passing the impugned order dated 14.09.2017 (Annexure P-12) has assigned the reasons that the default was detected in the case of NHAI, i.e., the respondent No.3, which was the assessee over which the respondent No.1 exercised jurisdiction. The NHAI was liable to deduct and deposit TDS and interest for delay but the NHAI instead of paying it out of its own coffers illegally recovered the amount from IJMC-petitioner. The charge of interest was created on NHAI and not on the petitioner and therefore, the claim of the petitioner was not justifiable. In view of the aforesaid elaborate discussion, in our opinion, the reasons assigned by the Revenue to decline refund of the ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 7 interest under section 201(1A) of the Act recovered from respondent No.3-NHAI on behalf of the petitioner is untenable, as after detailed scrutiny, the respondent No.2 found that the petitioner was assessed at loss and therefore, allowed the TDS credit in its favour. The TDS was refunded to the petitioner in accordance with law. Then, in that situation, no interest recovered from respondent No.3 under section 201(1A) of the Act could be legally retained by the Revenue. In these circumstances, the interest u/s. 201(1A) of the Act deducted and deposited by the respondent No. 3 with the office of the ACIT, Jabalpur, ought to have been refunded. 16. Therefore, in the facts and circumstances of the present case, any payment of TDS by the deductor in respect of payment made to deductee petitioner will entitle the deductee to get back such TDS with interest at the time of framing of assessment under section 143(3) of the Act. In such eventuality, it was not proper to hold the deductor as assessee in default under section 201(1) nor interest could be levied under section 201(1A) of the Act. 17. For the foregoing reasons and the admission of claim of refund of interest amount payable to respondent No.3 by the respondent No.2 and direction being issued in this regard to the respondent No.1 vide order dated 04.08.2017 (Annexure P-11), the impugned order dated 14.09.2017 (Annexure P-12) is quashed. The respondent Nos.1 and 2 are directed to refund the interest amount collected under Section 201(1A) of the Act from respondent No.3 on behalf of the petitioner together with interest under Section 244A of the Act, who in turn, shall pay the same to the petitioner in accordance with law.” We were, accordingly, urged by Shri Srivastava to issue similar directions, as the assessee had, despite clear directions by the Hon'ble High Court, yet not been granted refund of interest u/s. 201(1A) for the relevant years by the Revenue. In fact, one of the pleas raised in justifying the non-grant of the said refund by the Revenue before the Hon'ble Court was that the matter is sub judice before this Tribunal. In our considered view, once the Hon'ble High Court has opined in the matter and, rather, issued clear directions to the Revenue, binding on it, we cannot issue any such direction or even be called upon to do so. It does not lie in the mouth of the Tribunal to direct the parties to abide by the directions by the Hon‘ble High Court, which are in law binding on them, and the course to be adopted in such a case would be to move the Hon‘ble Court in the matter. Our ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 8 purview, in exercise of the appellate jurisdiction, is restricted to answering the question/s and issue/s arising, or discerned as, in the appeals to the Tribunal. Rather, and on the contrary, it is this Tribunal which, in case of non-observance by any of the parties before it of it‘s directions issued thereto in exercise of it‘s appellate jurisdiction, jeopardising it‘s appellate function, may, on being suitably moved, be required to invoke the powers of the Hon‘ble Court, under contempt proceedings or otherwise, toward compliance inasmuch the said directions are binding on the parties. Further, it was also not clarified to us if the order by the Hon'ble High Court has been subject to any challenge (including by way of a review petition, by the Revenue or any other respondent for that matter) before the appropriate forum. What, however, is open for us; rather, we are duty bound to, is to decide the instant appeals, and the hearing thereof took place toward that end. 4. The foregoing would also explain the controversy arising before us as well as its genesis. The matter in our view stands concluded by the decisions by the Apex Court in Hindustan Coco-Cola Beverages Pvt Ltd. (supra) and Eily Lily & Co. (I) (P.) Ltd. (supra), cited and relied upon by the Tribunal in the first round. The facts of the former case are that tax deductible at source had been paid by the deductee itself, i.e., before the appellant-deductor could satisfy the demand u/s. 201(1), so that it was, despite shortfall in tax deduction at source, not deemed to be in-default for the shortfall in tax deductible. The liability to interest u/s. 201(1A) would, however, obtain, i.e., for the period over which the shortfall obtained and, thus, its levy upheld. The relevant part of the decision reads as under, quoting, with approval, the Board Circular in the matter: (pg. 230) ―10. Be that as it may, the Circular No. 275/201/95-IT(B), dt. 29 th Jan., 1997 issued by the CBDT, in our considered opinion, should put an end to the controversy. The circular declares "no demand visualized under s. 201(1) of the IT Act should be enforced after the tax deductor has satisfied the officer- in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under s. 201(1A) ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 9 of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under s. 271C of the IT Act." The facts, it may be noted, are akin to the instant case inasmuch as the tax demand u/s.201(1) stands recovered by the assessee from the payee-company. In the facts of Eli Lilly & Co. (supra), the assessee-respondent, a joint venture company (between an Indian and a foreign company), to whom it‘s employees were seconded by the foreign company, failed to deduct tax at source on the home salary paid abroad by the foreign company to the said employees. The assessee-company was treated as an assessee in default qua the home salary, rejecting the explanation that it was paid outside India to employees who continued to be on the rolls of the foreign company. The stand of the Revenue was upheld by the Apex Court, holding as: (pg. 253) ̳37 ..... In case taxes due on home salary/special allowance(s) stand paid then the Assessing Officer shall not proceed under section 201(1). In cases where the tax has not been paid, the Assessing Officer shall proceed under section 201(1) to recover the shortfall in the payment of tax. 38. Similarly, in each of the 104 appeals, the Assessing Officer shall examine and find out whether interest has been paid/recovered for the period between the date on which tax was deductible till the date on which the tax was actually paid. If, in any case, interest accrues for the afore-stated period and if it is not paid then the adjudicating authority shall take steps to recover interest for the afore-stated period under section 201(1A).‘ The said decisions can, thus, be regarded as an authority for the proposition that liability to interest u/s. 201(1A) does not necessarily imply or follow, a liability toward tax u/s. 201(1). Continuing further, it does not in fact require much deliberation to understand the reason for the same. Even as explained by the Bench during hearing (as the decision in Hindustan Coca-Cola Beverages Pvt Ltd. (supra) was, despite being required to, not met by Sh. Srivastava), that the liability to tax deductible or shortfall therein may finally be paid by the deductor or the deductee directly by the end of the year (or even later though prior to the assessment u/s. 201(1)), so that it obtains no longer. The liability to interest u/s. ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 10 201(1A) would nevertheless obtain for the period of the delay in the discharge of the liability to the said tax, so that the two, though related, may not go together. Termini points forming the period for charge of interest stand defined u/s. 201(1A) itself, as indeed in the Board Circular (supra). 5. We are conscious, when we say so, that no tax has been, on account of continued loss/es sustained by IJM, found as payable by it, toward whose tax liability u/s. 4 of the Act the tax deductible at source is. The obligation to deduct tax at source however is with reference to that deductible, and which in the instant case, the payee-company being a non-resident, is w.r.t. s. 195. Sec. 195(2), as indeed s. 197, provide the mechanism for the same in law, whereby the AO can be approached by a deductee in case the tax liability apprehended on the sum being received is lower than that deductible under law, and who would in that case issue a certificate accordingly. Needless to add, the deductor‘s liability for tax deduction, i.e., the tax deductible at source, with reference to which the liability to interest u/s. 201(1A) arises, is to be reckoned with reference to the sum so liable to be deducted, i.e., as per the certificate/s issued, which may also define the period for which the lower (defined) deduction of tax shall obtain. As we gather from the orders forming part of the record, the assessee had not deducted (and, accordingly, not deposited) the tax for the relevant years with reference to the certificates obtained by the payee-company (IJM), which are regarded by the Revenue as effective prospectively, i.e., subsequent to the date on which the same stand issued, so that the payments/credits materialized prior to the date of issue would not be governed by the lower rate/s specified in the said certificate/s. This aspect is thus not disputed before us, i.e., of it having been for that reason levied in excess, and the refund being claimed is for the entire interest, i.e., in toto. That is, the entire interest liability stands paid, which the assessee contests in entirety, i.e., without reference to the said certificate/s, making out a case for that demanded being in excess to that extent. ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 11 6. The two provisions are to be therefore considered independently, i.e., in the given facts and circumstances of the case, on the terms specified therein, and an absence of any outstanding liability for tax deduction at source may not dilute or extinguish that toward interest, which sure is though compensatory in character. All the three components of interest find specification in the provision (s. 201(1A)) itself. The words ̳tax as required by or under the Act‘ define the quantum of tax, to which the obligation u/s. 201(1) extends, and delay in non-deduction or non- deposit for which interest is levied u/s. 201(1A). It is this non-action, i.e., non- deduction or, as the case may be, non-deposit, that constitutes a default for which the assessee is deemed to be an assessee in default qua the principal sum (of tax deductible). A payment directly by the deductee-payee may, however, discharge this liability, paying tax during the relevant previous year, so that no default u/s. 201(1) obtains. It could also be a case where the tax is deposited, again, either by the payer-deductor or even by the payee, after the close of the relevant year, but before the date of his assessment u/s. 201(1), so that there is no demand u/s. 201(1). The period of delay, in the satisfaction of the said demand, i.e., from the time when the tax was required to be deducted and deposited to the time when it actually is, would attract compensatory interest u/s. 201(1A). The instant case, however, is none of these. The tax deductible stands deposited, albeit upon being assessed u/s. 201(1), and a refund of the interest paid u/s. 201(1A) is being claimed on the basis that the entire tax deducted stands since claimed as refund by the payee (IJM), and on that basis, claimed that no liability to tax deduction had in law arisen in the first place. The fallacy in the argument is easy to see. The obligation to deduct tax at source is to be in terms of the provisions of (Chapter XVII-B of) the Act, which, as afore-stated, also provide a mechanism for nil/lower deduction of tax at source. It is with reference to this sum that the assessee is statutorily obliged to deduct tax at source, and in case of default, is to be deemed to be in default. While a direct payment by the deductee (s.191), i.e., toward a vicarious liability, would, for that reason, discharge the demand u/s. 201(1), there is no ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 12 warrant in law to extend it to the tax assessment of the payee, which may not be forthcoming and, besides, the order u/s. 201(1) shall have to await the said assessment. The argument also overlooks that interest is to run from the date when the tax was deductible. Sure, there is no question of a liability to interest arising unless there has been a delay in the discharge of the tax liability, so that there has to be a time lag, as obtains in the instant case, between the time (date) when the tax was deductible and, thus, deposited, and the time (date) when it was actually so. The condition of the assessee being in default qua tax deductible at source would thus exist for a time, which may not necessarily result in an assessment u/s. 201(1), as where by the date of said assessment the liability in its respect stands discharged. 7. The obligation to deduct and deposit tax at source is thus with reference to tax deductible, i.e., that liable to be deducted under the provisions of Chapter-XVII of the Act, which provides for a mechanism for a lower (including nil) deduction of tax at source u/s. 197. The fact of the payee company having incurred a loss, so that it was not liable to any tax for the relevant year/s, becomes, therefore, largely irrelevant as far as assessee-payer is concerned. The issue as to whether the amount deductible would include the amount not actually deducted, though liable to be, came up for consideration by the Apex Court recently in DIT vs. Mitsubishi Corporation [2021] 438 ITR 174 (SC) in the context of liability to interest u/s. 234B. The assessee claimed that inasmuch as the words used in s. 209(1)(d), providing for computing the amount of advance tax payable on the shortfall on which interest u/s. 234B becomes chargeable is ̳income-tax deductible at source‘, interest u/s. 234B could not be levied on tax liable to be deducted though not actually deducted and deposited with the Central Government. The same found approval by the Apex Court. Sure, the definition of ―assessed tax‖, with reference to which interest u/s. 234B is charged, specifically provides for a reduction of the amount of tax deducted (or collected) at source. However, sec. 209, which ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 13 provides for computation of advance-tax, could not be ignored and s. 234B could not be read de hors and without reference to the other provisions of Chapter-XVII. The Revenue could, it went on to hold, proceed against the payer, as the assessee in the instant case, who had defaulted in deducing tax at source. In other words, inasmuch as the words used in s. 209(1)(d) clearly requires reduction of amount deductible (or collectible) at source, the same would be included in computing the advance tax liability even though not actually deducted and paid. More so, as the Revenue could proceed against the deductor for non compliance of the TDS provisions, recovering not only tax but also the interest for non-deduction in time. The Apex Court, in so deciding, approved the decisions in DIT vs. Jacabs Civil Incorporated [2011] 330 ITR 578 (Del) and CIT vs. Madras Fertilizers Ltd. [1984] 149 ITR 703 (Mad). The decision, as we see it, has two aspects to it. One, that the word ̳deductible‘ is to be read to mean the tax that ought to be deducted, i.e., as per the provisions of Chapter-XVII, giving it thus its natural, intended meaning. This would be so regardless of the fact that the payer had not deducted the tax liable to be deducted at source and, consequently, the assessee-payee has received the entire sum credited to it without deduction of tax and, thus, in fact enjoyed the benefit of additional funds to that extent. A fact it cannot plead to be ignorant of. The amount that was statutorily required to be deducted under the TDS provisions in computing the liability to advance tax could not be, for the default of the payer in not so deducting, not reduced in working the advance-tax liability of the payee- deductee in view of the word employed in sec. 209(1)(d) being ̳deductible‘ and not ̳deducted‘. This is precisely what sec. 201(1A) seeks to provide, i.e., compensate the Revenue by way of interest for what was required to be deducted under the Act vis-à-vis what was in fact/actually deducted, for the period over which the shortfall obtained. The second aspect, equally relevant, that the said decision clarifies, is that it is only the person who could be deemed to be an assessee-in-default could be so for the compensating interest. This is as despite s.190 (clarifying that inspite of tax being liable to be deducted, it shall be without ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 14 prejudice to s. 4(1)); s.191 (requiring an assessee to pay the tax deductible at source, direct), and s. 202 (clarifying tax deduction at source to be but only one of the modes of recovery of tax), no liability to interest for the delayed payment of tax due to non-deduction of tax at source by the payer, could be fastened on the payee. This is as the same by law falls to be recovered from the payer of the income only. This would also agree with Article 265 of the Constitution of India which postulates that no tax shall be levied or collected except by the authority of law. Interest, a statutory levy, for delayed discharge of tax liability us/. 201(1), assumes a character of tax comprised in Art. 265. As a corollary, while the tax liable to be deducted at source could be recovered from an assessee-payee, as indeed he is liable to (s.190 r/w s. 191), the interest liability (for delayed payment of tax) cannot. That is, while the liability to tax is a vicarious liability, even as clarified earlier by the Apex Court in Eli Lily & Co. (I) Pvt. Ltd. (supra), that to interest is not. The position shall continue even post-amendment by way of proviso to s.209(1)(d) by Finance Act, 2012, w.e.f. 01/04/2012, i.e., AY 2012-13 onwards. This is as both the payee-deductee and the payer-deductor are separately liable to interest for default on delayed payment of advance tax and tax deductible at source u/ss. 234B and 234C and s. 201(1A) respectively. The liability to tax, incurred in either case, u/s. 4 r/w s. 190, being, however, in respect of the same tax, payment by either would serve as the terminus point for computing/working the liability to interest, even as clarified by the Apex Court in Hindustan Coca-Cola Beverages (supra). 8. An Overview We have also; the cited decisions by the Apex Court being specifically w.r.t. 201(1) & 201(1A), reviewed the various provisions of Chapter XVII, to find them in harmony and consistent with what stands held by the Apex Court in the decisions afore-cited, being rendered in the context of ss. 201(1) & 201(1A). We present an overview thereof, as under: ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 15 a). the obligation to deduct tax source on any sum paid to a payee, whether resident or non-resident, as required by or under this Act, toward tax on the income comprised therein, is an obligation separate and distinct from that of the payee (s. 4(2) r/w s. 190). The same cannot in fact be demanded from the payee (s. 205) b). the non-discharge of his obligation by the payer therefore results in he being deemed to be an assessee in default for the amount of tax deductible at source, i.e., as required to be deducted by or under the Act (section 201), to the extent not deducted or paid as per the provisions of Chapter XVII. c). the same is liable to be recovered under the recovery procedure (s. 220) and, further, is subject to a charge on the assets of the payer (s. 201(2)). This would be therefore so even if the payment has been made to the payee in full, i.e., without deduction of tax at source, so that the payer has not retained any part of the payment due and made to the payee. d). the deduction of tax at source being only toward the tax liability of the payee, which can thus be paid by him direct (s. 191), or otherwise recovered, as upon assessment (s. 220), tax deduction at source being only one of the modes of recovery (s. 202), the obligation of the deductor, or he being deemed to be in default under section 201(1), shall, upon such payment by the payee himself, cease or, as the case may be, cease to be so. e). the payer shall, apart from the obligation to deduct and pay tax at source, is also liable to pay interest at the rate(s) specified where there has been a failure on his part to deduct and deposit the tax as required to by or under the Act, for the period for which the tax default continues (s. 201(1)). The same therefore cannot extend beyond the time the payer pays the said tax or is otherwise not deemed to be default. Though, therefore, an assessee may no longer be in default u/s. 201(1), he shall continue to be so u/s. 201(1A) until the liability in its respect is satisfied. The liability to pay interest u/s. 201(1A), which would be with reference to the shortfall in the tax liable to be deducted under the Act, is thus without prejudice to his liability to tax u/s. 201(1). Further, the same, as qua liability u/s. 201(1), is subject to a charge on the assets of the payer. The question posed by the assessee-appellant at the beginning of the order, is, in light of the foregoing, answered in the negative. We are conscious, when we say so, that our answer may, perhaps be, or construed as, at variance with that by the Hon'ble jurisdictional High Court in IJM Ltd. (supra), whose ruling is binding on us. We shall revert in this aspect, in some detail, later. Suffice here to say that our ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 16 stating so is, with respect, based on the clear provisions of law, as explained by the Apex Court per its several decisions, some of which stand referred to. 9. We may next visit the circumstances of the case, and examine them in greater detail which, we must admit, remained to be so in the first instance, whereat the same were looked at summarily, inasmuch as it was argued before us that the matter involved a short question of law, recently answered by the Hon‘ble jurisdictional High Court in the assessee‘s own case, i.e., involves a settled position of law, so that it was taken as covered matter and read out in full. It was only later; the matter being argued at length, that each of the documents deemed relevant were also read out during hearing at our instance. Our order, thus, though not necessarily required to, true to form, follows the same trajectory. The order/s under section 201(1) and 201(1A), as passed originally, is not on record. The same, nevertheless, deemed the assessee to be in default, both for tax and interest, which sums stand paid by the assessee even as it preferred an appeal/s there- against, to no success. Also, the same, for all the years, are prior to 01/07/2012, since when the law is amended to not deem a person as an assessee-in-default upon the payee furnishing specified documents. The appellate order is, again, not on record, though the appeal for AY 2011-12, being delayed before the first appellate authority by 466 days, was dismissed by him as time bared, i.e., dismissed in limine, without deciding it on merits. The Tribunal, in further appeal, decided thus: A. For AYs. 2008-09 and 2009-10 (in ITA Nos. 22 & 23/ Jab/2012 dated 20/9/2013). ̳3. Applying the proposition of law as discussed in the above case to the facts of the instant case, we hold as under. 1. Since the income of Ssang Yong Engineering & Construction Co. has been assessed at loss u/s 143(3) in the assessment years 2008-2009 and 2009-2010, payment made to M/s Ssang Yong Engineering & Construction Co. was not liable for deduction of tax. Accordingly the assessee is not in default u/s. 201(1) and 201(1A) with respect to the ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 17 payment to Ssang Yong Engineering & Construction Co. during the assessment years 2008-2009 and 2009-2010. 2. In respect of payment made to M/s IJM, contention of the assessee was that its income has also been determined at loss as per intimation issued by the Department u/s 143(1) of the Act. Since assessment has not been framed u/s 143(3), assessee cannot be given benefit of aforesaid proposition laid down by this Bench, accordingly we restore the matter to the file of the Assessing Officer with the direction to find out if the income of M/s IJM is liable to tax or not. In case Assessing Officer founds that IJM has paid due taxes on its income, which also incorporates the income paid by the assessee, then the assessee cannot be held to be in default u/s 201(1). However, if the Assessing Officer founds that IJM has not paid taxes on its income including the income received from the assessee, assessee is liable u/s 201(1) of the Act. With respect to the assessee's liability u/s. 201(1A), the assessee is liable to payment interest between the date the amount is liable to be deducted till the date of actual payment of tax by M/s IJM. The Assessing Officer is to verify the records of IJM. The assessee is directed to file a certificate by the Chartered Accounts to the effect that IJM have duly incorporated the income paid by the assessee and that IJM has duly paid taxes on their income. We direct accordingly. 4. In the result, both the appeals are disposed of in terms indicated herein above.‘ B. For AY 2011-12 (in ITA No. 285/Jab2013, dated 29/05/2015) ̳5. We have heard both the parties and have also perused the material available on record. After hearing the rival submissions and going through the orders of the tax authorities, we noted that the case of the assessee is duly covered by the judgment of Hon‘ble Supreme Court in the case of CIT vs. Eli Lilly & Co. (India) (P) Ltd. [2009] 312 ITR 225 (SC), wherein, it has been held that the period of default starts from date of deductibility of tax till date of its actual payment by the concerned employee and also in the case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT [2007] 293 ITR 226 (SC), wherein, it has been held that when the tax has been paid by the deductee-assessee, the tax could not be recovered once again from the assessee. All facts are not borne out from the assessment orders and the ld. CIT(A) has also not verified the same. Therefore, in the interest of justice and fair play, we restore this matter back to the file of AO with the direction that the AO shall verify whether the payment shown in the assessment order is liable for TDS or not. Secondly, if there is any short deduction of tax or not and if there is any short deduction of tax than the receipt and the payee has paid the tax or not and they have shown in the return of income has to be verified from the concerned assesses. Therefore, this all requires verification at the end of AO. The AO and ld. CIT(A) should have verified these facts before making the assessment and ld. CIT(A) ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 18 should have also done this exercise. We found both the authorities have failed to do so. Therefore, in the interest of justice and fair play, we restore back this issue to the file of AO and the AO is directed to verify whether any short deduction of tax or not and whether the assessee is liable for interest or not and whether the deductee has paid tax or not. The assessee is directed to cooperate with the AO and he must produce all the relevant evidence before the AO and the AO is further directed to verify the same and decide the matter afresh keeping in mind the decisions of Hon'ble Supreme Court in the case of CIT vs. Eli Lilly & Co. (India) (P) Ltd and Hindustan Coca Cola Beverage P. Ltd. v. CIT (supra). 6. In the result, the appeal is allowed for statistical purposes.‘ (emphasis, ours) The AO, in the second round, passed a common order on 21/12/2016 for all the three years. It was, in view of the loss/es incurred by IJM Ltd. for the relevant years, held that the assessee is not deemed to be in default either u/s. 201(1) or u/s. 201(1A); the assessment of the payee, IJM Ltd. for all the three years having been since made and taken on record, as indeed was for the other payee: (Amount in Rs. lacs) Asstt.Yr. IJM Ltd. SYEC Ltd. 2008-09 Nil Loss (not specified) 2009-10 (194.44) Loss (not specified) 2011-12 (615.04) - Figures in brackets represent negative figures The assessee appealed thereagainst, raising the following grounds, common for all the three years under reference: ̳1. That the ld. ITO have erred in law and facts in ignoring the provisions Income Tax Act whereby it has been provided that the where there is no tax liability no interest should be charge. 2. That the ld. ITO have erred in law and facts in ignoring the provisions Income Tax Act and not giving the refund of interest amount paid by the assessee.‘ Aggrieved, the assessee is in second appeal, raising the following grounds, again, common for all the years: ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 19 ̳1. That the Honble CIT (A) was wrong in law in not allowing the refund of the interest amount which is a legal right of the Assessee 2. That the honble CIT(A) was wrong in denying refund of Interest amount paid by the NHAI when there is no demand of the principal amount. 3. That the ld. AO erred in law and on facts in assessment order passed u/s. 143 (3) there is no demand of tax and has totally lost sight of the provisions if IT Act which provided that Refund of interest which is excessive paid by the assessee. 4. That the income tax authority (Assessing Officer) is obliged to refund the amount pursuant to any proceedings by way of appeal or and where such assessment has reducing liability of the assessee (In our case the liability is only of interest amount deposited by the assessee).‘ 10. Our first observation in the matter that inasmuch as the orders by the Tribunal in the first round were not appealed against by either side, the same have attained finality (refer: CIT v. Mtt. Ar. S. Ar. Arunachalam Chettiar [1953] 23 ITR 180 (SC); Hindustan Coca Cola Beverage (P.) Ltd. (supra); CIT vs. D & H Secheron Electrodes Ltd. [2008] 301 ITR 20 (MP)). Per the same, the matter, for all the three years, was remanded to the file of the AO only qua tax and interest paid in respect of sums paid to IJM Ltd. For the first and second years, the interest liability u/s. 201(1A) was required to be worked out from the date tax is liable to be deducted to the date of actual payment by IJM Ltd. For AY 2011-12, it was more of an open set-aside by the Tribunal; it finding that the different elements required for interest calculation, viz. short deduction; whether the assessee was liable to interest thereon; and whether the deductee had paid tax or interest, were not known. The matter was accordingly remanded for verification of facts and determination of the issue arising in view of the decisions by the Apex Court in Hindustan Coca-Cola (supra) and Eli Lily & Co. (supra). That is, in accordance with law, which would be equally applicable for the other two years as well, with the AO, in fact, taking up the matter together and disposing it by the combined order. Our second observation in the matter, thus, is that it is an open set-aside, to be decided upon verification of facts deemed relevant, in particular the ingredients for interest calculation u/s. 201(1A), in accordance with law. There is nothing in ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 20 the clear language of these decisions, which the Tribunal, as obliged to, follows, to suggest reliance on the assessment of the payee in determining the demand u/s. 201(1), language of which is also clear. Our third observation is that while the set- aside for AY 2011-12 was for both i.e., tax and interest, the issue that survives before us is only qua interest; it being a common ground before us that the tax stands since paid by the assessee u/s. 201(1) r/w s. 195/197, and in fact claimed refund by the payee, on whose behalf it was, and who has in fact also been allowed credit in its respect, and granted refund in view of no tax liability for all the three years. It was, accordingly, argued before us that there could possibly be no question of the assessee being default for tax u/s. 201(1) and, consequently, for interest us/. 201(1A). The argument, is, with respect, misplaced. The assessee‘s liability to tax deduction at source is with reference to the tax deductible, i.e., as required to by or under the Act, as a plain reading of, both separately and conjunctively, of sections 201(1) & 201(1A) also referred to earlier with reference to the words ―on the amount of such tax‖ used in s. 201(1A). 11. In this regard, we begin by saying that there has been no verification of the basic facts, as required by the Tribunal in the first round, viz: a) what is required to be deducted; b) when it was required to be, and c) when it was finally deposited, be it by the payer or the payee. That the payee‘s income for the relevant years would be at a loss would only be known only at the end of the year, i.e., lies in the womb of future, while the credits and payments thereto, the earlier of which two incidents attracts the obligation to deduction of tax at source (and, consequently), deposit it to the credit of the Central Government, would take place during the course of the year. The Apex Court in CIT v. Ashokbhai Chimanbhai [1965] 56 ITR 42 (SC) clarified that the profit or loss (which is only negative profit) does not accrue from day to day, but ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 21 only on their determination by the method of accounting at the end of the accounting year or any shorter period determined by law. It is, and could be, nobody’s case that the payee shall incur a loss for the year and, thus, no tax would ultimately be found to be payable by it and, therefore, not liable to be deducted at source. Besides being presumptuous, it has no basis in law. As, afore-noted, there is a mechanism in the Act (section 195(2) and section 197) for tax deduction with reference to a lower income or, as case may be, a lower rate of tax. This is precisely for a case where a lower tax liability is anticipated, and the liability of the payer for the tax deduction at source is to be reference to this tax. To correlate it with the tax that the payee may finally be assessed at, is not only de hors the provisions of the Act, but also, as afore-explained, without basis on facts. It is like putting the cart before the horse. It is an extraneous condition imported which has no warrant in law, provisions of which, as we shall presently see, are also fair and equitable. In the instant case, the payee has obtained tax deduction certificates u/s. 197, and the Revenue has, as we understand, worked out the default only w.r.t. the tax rate specified therein. If paid in excess, i.e., of the payee‘ liability to tax for the relevant year/s, it would be entitled to refund with interest. This would be so even if the tax deduction (and deposit) has taken place during the previous year (i.e., the financial year preceding the assessment year), or even later, as appears to be the case for AY 2011-12 in the present set of cases. While the Tribunal‘s orders for AYs. 2008-09 and 2009-10 do not mention any figure, that for AY 2011-12 states the interest u/s. 201(1A) up to 31.03.2012, at Rs. 94.72 lacs (at para 2). The same, however, is stated by the Hon'ble High Court, as at Rs. 173.65 lacs. Clearly, therefore, as the interest is to run till the payer‘s liability to tax deductible is discharged, either by him or by the payee, whichever is earlier (s. 191), the same was paid only much later. That is, interest would become due to be granted to the payee-deductee u/s. 244A from the beginning of the year following the previous year, even if, as it happens in the instant case, the deposit of the tax deductible is made subsequently. This is as the law treats the two obligations cast on the payer ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 22 and payee, even as clarified in Mitsubishi Corporation (supra), as separate and distinct. It is the intermingling of the two, perhaps under the purported sense of equity, that has led to the obfuscating the issue, even as the legal provisions, as their overview and a read together, as indeed required to be (Prakash Nath Khanna v. CIT [2004] 266 ITR 1 (SC)), would reveal, well thought out and well-conceived, taking into account different aspects and fact situations. The non-payment of tax deductible (by the payer) being a condition precedent for holding an assessee to be an assessee in default u/s. 201(1) and, consequently, liable u/s. 201(1A), a direct payment (s. 191) by the payee would absolve the deductor for payment u/s. 201 to that extent. This direct payment is only for the tax which the payer was obliged to pay, satisfying the demand thus u/s. 201(1). There is, however, no provision of law which would enable consideration of the tax assessment of the payee, which would be generally much later in time, while framing an assessment u/s. 201(1), even assuming it to be pending at the time, or its modification subsequently on the ground that no tax was ultimately found payable by the payee. The same could also raise a number of other, related issues; the tax assessments being subject to rectification, revision, reopening, and appeal. It would, nevertheless, as in the instant case, be exigible for and claim refund of tax deductible at source, along with interest as per law, which it has indeed claimed and been granted, rendering the discussion afore-said, to that extent, academic. The only issue surviving is the interest obligation of the assessee u/s. 201(1A). How we wonder it having paid the tax demand u/s. 201(1), in terms of the tax which it was required to deduct by and under the Act, could it possibly adopt a stance of non-liability to s. 201(1A)? If there has been a default, the consequences in law shall follow (Palam Gas Service (infra)). 12. If a payee considers that no (or lower) tax would be chargeable on his income for a particular year/s, the course available to him in law is to satisfy his AO in the matter, and obtain such a certificate which, needless to add, would ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 23 include a nil tax certificate, as where there are brought forward losses. The assesse-payer‘s obligation for TDS would extend to this certificate/s, and reference to the losses incurred or finally assessed, which may be much after the close of the year, is misplaced. Importing any such condition, which is in fact inconsistent with the provisions of the Act, would in fact tantamount to writing the law, not interpreting it, and which having been in fact by the Apex court per its various decisions, it would imply not abiding or following the law of the land. Though the principles of interpretation are well-settled, the Apex Court per its recent decision in CIT vs. Mohammed Meeran Shahul Hameed [2021] 438 ITR 288 (SC) clarified that it is a cardinal principle of law that that the provisions of the statute/Act are to be read as it is, and nothing is to be added or taken away from the provisions of the statute (also refer: CIT v. Calcutta Knitwears [2014] 362 ITR 673 (SC)). 13. The next argument before us by Sh. Srivastava was that there could be no two views in the matter as the assessing authority has himself issued a finding, i.e., in the second round, of the assesse being not in default, both under section 201(1) and 201(1A) of the Act. The argument, seemingly impressive, is seriously flawed, both in law and on facts. Nothing in fact changed between the first and the second round, except of course the directions by the Tribunal. As already clarified, the Tribunal has, for the years under reference, required the AO to bring on record all the three relevant pieces of information, as afore-noted (see para 11), with reference to which interest liability u/s. 201(1A) is to be ascertained. The Act contemplates satisfaction of a demand u/s. 201(1) or 201(1A) only by actual payment. The AO‘s finding is thus de hors the facts as well as the directions by the Tribunal. True, the Tribunal in its‘ order dated 20/9/2013, does refer to the decisions where the payee had incurred a loss, so that no tax was payable for the relevant year, and on which basis it stands held in such cases that no liability to tax u/s. 201(1) or s. 201(1A) arises. However, the same do not form part of the Tribunals‘ final decision, which is explicit, and having not been contested, has ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 24 attained finality. The AO was thus duty bound to give effect to the directions by the Tribunal, a superior forum (Union of India vs. Kamlakshi Finance Corporation, AIR 1992 SC 711). Any finding by him inconsistent therewith is liable to be set aside. The only course available for the parties, in case the said order was, for any reason, found not acceptable, was to prefer an appeal there- against. Further, true the Tribunal, in its‘ order dated 20/9/2013, does mention of ̳the date/s of payment of tax by IJM‘, i.e., qua the third ingredient, being the date up to which the interest obligation is to run. The same, as afore-explained, is only under the premise of the assessee having not deposited tax and, therefore, properly construed, would mean payment of tax by the assessee (payer) or IJM ( payee), whichever is earlier, i.e., till the discharge of the liability of the tax deductible u/s.195/197. It could be nobody‘s case that even if the assessee (payer) had paid the tax, that interest obligation would continue till IJM (payee) has also paid it. In law, the argument places the AO above the law, besides casting him in adversarial position, i.e., vis-a-vis the assessee. The AO is a public authority obliged to discharge the functions of, primarily assessment of income and tax under the Act, a public law. His decision thus cannot bind an appellate authority, each of which – including the Apex Court itself, is itself bound by law, much less where and to the extent it is found by it to be not in accordance with law. As explained by the Apex Court time and again, it is the correct legal position that is relevant, and not the view that the parties may take of their rights in the matter: CIT v. C. Parakh & Co. (India ) Ltd. [1956] 29 ITR 661 (SC); Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC)). Why, the Apex Court itself has in a scores of cases, favoured a view that did not represent either the case of the Revenue or of the assessee; the decision in Madras Industrial Inv. Corp. Ltd. v. CIT [1997] 225 ITR 802 (SC) and Vijay Shipbreaking Corp. v. CIT [2009] 314 ITR 209 (SC) come readily to mind. The reason is simple. Proceedings under the Act are not adversarial in nature, viz. S.S. Gadgil vs. Lal & Co. [1964] 53 ITR 231 (SC) and, two, there is no estoppel against the law (CIT v. Durga Prasad More [1971] 82 ITR 540). The sole premise ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 25 of the appellate function, right from the first appellant authority to the Apex Court, under the Act, is thus to bring an assessment, qua the points being contested, in accordance with law. We do not therefore consider ourselves as constrained by law to not issue a finding, upon considering the facts and circumstances of the case and the law in the matter, which may not be in agreement with that by the AO. On the flip side, we cannot help noting that what Sh. Srivastava in effect states is that an order by the AO can be interfered with only to the extent it is disfavourable to the assesse, which is, for the reason afore-stated, not a valid statement in law. The Apex Court in Hukumchand Mills Ltd. vs. CIT [1967] 63 ITR 232 (SC) power – clarified that even rules 11 and 27 of the Income Tax (Appellate Tribunal) Rules, 1963, are not exhaustive of the powers of the Tribunal, while in the instant case we find the AO‘s findings to be not in accordance with the directions of the Tribunal, which form the starting point of the set proceedings. The argument is accordingly rejected. 14. We may next advert to the decision by the Hon'ble jurisdictional High Court in IJM Ltd. (i.e., W.P.No. 19315/2017), whereby the Hon'ble Court has held that there could be no liability to interest u/s. 201(1A) in the absence of any liability to tax under section 201(1), as where the payee is assessed at nil or at a loss, as is indeed the case at hand for each of the relevant years. Before we discuss this matter, it must be reiterated that we are, in the instant proceedings, duty bound to answer the questions arising in the instant appeals with a view to satisfactorily dispose the same, including the question of law, as indeed of facts, as well as mixed question/s of fact and law raised or arising therefrom. In our clear view, this issue has already been decided by the Tribunal in the earlier round, wherein it has categorically stated that the liability u/s. 201(1A) shall arise where and up to the date of actual payment of tax by the deductee-payee, which we have already clarified to (could only) mean an actual payment by either the payer or the payee, whichever is earlier. This is as it is this payment, i.e., of tax liable to be deducted ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 26 u/s. 195 r/w s. 197, that alone can satisfy the demand u/s.201(1), which in fact has been, so that the assessee is no longer in default u/s. 201(1). As afore-noted, the Act does not contemplate the satisfaction of a demand u/s. 201(1) or s. 201(1A) other than by way of actual payment. That the assessee has ̳recovered‘ this sum also from the payee (IJM Ltd.), regarded as illegal by the Hon‘ble Court, is something between the two, in the nature of a private dispute. The same rather ought not to give rise to any claim by IJM Ltd. against the Revenue, which can only be proceeded against by way of appeals by the assessee, i.e., NHAI, before it, deemed to be in default by it, i.e., qua the interest u/s. 201(1A), and as in fact directed by the Hon‘ble jurisdictional High Court in the first instance, i.e., in WP No. 13284/2016, dated 23/01//2017, despite which the assessee-appellant did not move this Tribunal, which was unaware of these proceedings, for an early hearing, resulting in the Hon‘ble Courts‘ directions remaining uncomplied for several years, which fact stands duly noted by it in its order, compelling it perhaps to admit another writ petition by IJM Ltd. in the matter. A tax demand u/s. 201(1), where found to be ultimately in excess of the tax liability of the payee for the relevant year/s, as in the instant case, it shall be entitled to claim a refund along with interest as per the statute (s. 244A), which it in fact has, and stands admittedly granted. Rather, the law does not require a separate claim of refund, and the same arises in consequence of the assessment of tax for the relevant year, wherein credit for taxes, howsoever paid, included deducted at source (even if not deductible), is to be necessarily allowed, determining the final tax payable or refundable (Kalyankumar Ray v. CIT [1991] 191 ITR 634 (SC)). Where, then, one may ask, is the question of the assessee being not in default u/s. 201(1) in view of the payee (IJM Ltd.) having incurred losses or assessed at a loss? However, IJM Ltd., the payee, having received refund for the same, along with interest thereon, the said aspect is not in dispute, which thus boils down to the demand of interest, and the question of tax demand u/s. 201(1) is being raised by the assessee in the instant proceedings only in-so-far as it is ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 27 relevant for the purpose of ascertaining the question of the assessee‘s liability to interest u/s. 201(1A), claiming it to be consequential. That is, the entire issue is being considered from the perspective of IJM Ltd., i.e., to the extent it is, or continues to be, aggrieved, and which is, as afore-noted, so only due to the illegal action of the assessee in recovering its‘ statutory liability therefrom. And from the stand point of the instant proceedings, cannot be regarded as the correct perspective, which has to be regarded only in terms of the issue/s arising in the given facts and circumstances, and answering them in terms of the law as expressed and, further, as explained by the higher courts of law. That the tax paid by the assessee-payer u/s. 201(1) stands finally refunded, in whole or in part to the payee, does not in any manner absolve the assessee of its liability u/s. 201(1A); rather, on the contrary, the refund arises only on account of the assessee having discharged its liability u/s. 201(1). And which is only after adjusting the payee‘s assessed tax liability for the relevant year/s, which may be nil on account of it having been assessed at a loss. But that is something that the assessee-payer is not directly concerned about, and in fact has no means to authentically know or acknowledge, much less assess. Why, in a given case, the payee may not have filed the tax return, or does not share it with the payer. The assessed tax liability of the payee would be only much later in future, while the assessee‘s liability to tax deduction arises at the time of credit or payment, whichever is earlier, during the relevant previous year. It can be nobody’s case that the tax deduction is to await the assessment of the payee. In fact, that the payee has incurred a loss would again be known only after the closure of accounts for the year. As afore-noted, the law does not provide for any direct access to the said information to the payer. The two, though inter-related, cannot therefore be confused with each other. The only mechanism that the law provides, and very fairly, is for the payee, who only would be in the know of its‘ affairs, and who in fact is liable to suffer the deduction of tax, is to approach his AO and secure a certificate for tax deduction certificate at a lower rate, which may include a nil (or near nil) rate, from him after satisfying him ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 28 of his claims as to a minimal or even nil tax liability for the current year. The liability of the payer to deduct tax at source is by law limited to this rate. Rather, for remittances to non-residents, the law further provides for the payer moving its‘ AO u/s. 195(2) where a part of the payments being made are not liable to tax, and the obligation to deduct tax at source contemplated thereby is only on the part subject to tax. It is, as afore-noted, not the case that the payee’s income is not taxable, but of it’s taxable income being assessed at a loss. The whole purport thus is to avoid an excess deduction of tax as the same would in such a case stand to be refunded, with interest, to the payee, as indeed has been in the instant case for all the years under reference. It would not, in any case, for that reason, i.e., the ultimate refund, lead to the inference of no liability to tax deduction arising, or ceasure of tax liability, which is akin to putting the cart before the horse, making the end point as the starting point, as it were. As explained in CIT v. Central India Inds. Ltd. [1971] 82 ITR 555, 561(SC): ̳There is no provision in the Act which makes the assessment of income dependent on refund. The provisions relating to assessment are independent of refund though the provisions relating to refund may depend on assessment.‘ That is, apart from being inconsistent with and, rather, de hors the provisions of law. The same itself defeats the assessee‘s reliance on IJM Ltd. (supra) in seeking a direction from us to the Revenue to issue a refund of the interest paid u/s. 201(1A). Any interest paid in excess (of that payable) would stand refundable, along with interest, if any, payable by law, as its retention would be without the sanction of law and, thus, by definition, illegal. The deduction by the assessee of interest u/s. 201(1A) from the payee is, even as observed by the Hon'ble High Court, illegal, and which would be so irrespective of whether the assessee is liable to interest u/s. 201(1A) or not, and thus irrelevant as far as the present appeals are concerned. Even so, such a direction could only be issued by the Hon‘ble High Court under its writ jurisdiction. The only course under law, where the assessee considers that its‘ liability to tax deduction at source is not with reference to that ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 29 deductible u/s. 195 r/w s. 197, as in fact provided u/s. 201(1), and consequently to interest u/s. 201(1A) for the delay in its payment, but with reference to the actual tax liability of the payee for the relevant year as would stand to be determined u/s. 143(3), as being claimed, was to invoke the appellate jurisdiction against the order by the Tribunal in the first round, which it has not, allowing it to attain finality. Our purview in the instant precedings is severely limited. As explained by the Apex Court in Melaram & Sons vs. CIT [1956] 29 ITR 607 (SC), a non-appeal gives a valuable right to the other side. The directions by the Hon'ble High Court, being in respect of the assessee, a respondent before it (and for the relevant years), were vehemently argued as binding on us. It is in fact this, coupled with the finding by the Tribunal of the matter being in fact covered by the decisions in Hindustan Coco-Cola (supra) and Eli Lilly and Co. (India) Ltd. (supra), that it became incumbent on us to, in view of the reliance by the assessee-appellant on the decision by the Hon'ble jurisdictional High Court in IJM Ltd., to examine the matter in greater detail. This is as we are duty bound to, in giving effect to the orders by the Tribunal in the first round, which have since attained finality, examine the decisions by the Apex Court relied upon, which would rather – where and to the extent applicable, in any case hold, and are binding on all the courts and tribunals in India under Art. 141 of the Constitution of India. Inasmuch as our purview in the instant proceedings is the compliance of the directions of the Tribunal, since accepted by both the parties, that we consider ourselves entitled to read and understand the cited decisions by the Apex Court, found applicable. The same were not pleaded, much less shown, before us, to be not applicable, and which, where so, would rather raise the issue of the extent to which we could consider this issue in view of the said orders being not disputed. All the questions of law or fact or both, arising have been only in this context. This would also meet the assessee‘s reliance on the writ order by the Hon'ble High Court dated 11/7/2020, as indeed on the decision in Kamlakshi ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 30 Finance Corporation (supra), wherein the Apex Court has emphasized the virtue of judicial discipline and judicial precedence. We may here also clarify that we are conscious that the Tribunal, per its order dated 20/9/2013 (for AYs. 2008-09 & 2009-10), held, qua payments to another company, i.e., SYEC Ltd. that it having been assessed at a loss, no tax liability u/s. 201(1) arose on the assessee and, consequently, to interest u/s. 201(1A). It could thus be argued that the Tribunal ought to be considered as having decided likewise for the second company, i.e., IJM Ltd., as well. However, as would be apparent from a reading of para 3(2) of its‘ said Order, a similar contention was also raised for IJM Ltd. as well, albeit with reference to an intimation u/s. 143(1). It, nevertheless, went on to categorically hold that the assessee is liable to interest u/s. 201(1A), even as noted by the Hon'ble Apex Court in Hindustan Coca-Cola (supra) and Eli Lilly & Co. (supra). Whether this difference, i.e., of loss processed u/s. 143(1) or assessed u/s. 143(3), which seemingly prevailed with the Tribunal, was material, could only be answered and clarified by it, besides, of course, a court in review proceedings. It may though be clarified that an Intimation u/s. 143(1) is not an ̳assessment‘, being without any verification of the return or upon hearing the assessee. We have, on our part, clarified that the relevance of the Tribunal‘s orders in the first round is only qua the matters surviving and set aside, i.e., the interest liability u/s. 201(1A) in respect of tax demand u/s. 201(1) qua payments to IJM Ltd. (supra), for which it has issued unambiguous directions, binding on the parties in view of their acceptance thereof. That is, the said question is not open before us. To the extent open, we have, further, found them to be consistent with the decisions by the Apex Court relied upon by it. This answers the reliance on the directions issued to the parties by the Hon‘ble High Court in WP No. 19315/2017. ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 31 In sum 15.1 The controversy arising in the instant case is whether the assessee is liable to refund of interest levied and deposited u/s. 201(1A) of the Act? This is being claimed on the basis that the payee-company (IJM Ltd.) had since returned losses/nil income for the relevant years, claiming refund (of, among others, tax deposited by the assessee u/s. 201(1)), which has in fact been allowed thereto upon being so assessed. That is, as the payee-company has subsequently been assessed at nil income/loss, no liability to deduct tax at source had arisen to the assessee in the first place! Now, the obligation to deduct tax at source and deposit it with the Central Government arises during the relevant previous year/s itself upon being either allowed or payment, whichever is earlier, while a refund arises only upon assessment for the relevant year, beginning with the filing of the return of income, which could at the earliest be immediately after the end of the year. The argument advanced, in our humble opinion, is misplaced. A subsequent tax assessment cannot be determinative of the tax demand u/s. 201(1) and, consequently, u/s. 201(1A). Two, it misses the point. Time is to necessarily run from the date the obligation is attached and the taxable event in the form of credit or payment to the deductee arises. For an interest provision, time is of essence, which is thus overlooked. The issue thus arising in the instant case is not, as was projected before us, i.e., if the liability u/s. 201(1A) is a concomitant of s. 201(1), but the scope of the obligation toward deduction of tax at source of a payer u/s. 201(1). The same is clearly for the amount which is required to be deducted by or under the Act. Or, more precisely, as afore-noted, if the tax assessment of the payee, which may not obtain in a given case, and would materialize only much after the close of the year, could be determinative of an order u/s. 201(1)/201(1A) seeking to enforce a mandatory statutory obligation on default? The incongruity of the proposition being advanced strikes one on the very face of it. Needless to add, the proposition is de hors the relevant provisions of the Act, i.e., Chapter-II and Chapter-XVII, ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 32 which are not only plain and unambiguous, but have received clear interpretation by the Hon'ble Apex Court time and, besides, are fair and equitable, taking care of the situation as arises in the instant case. And which, simply put, is apprehended loss/income by the payee-company for the relevant year/s and, consequently, excess deduction/collection of tax at source. The deduction of tax at source being the statutory obligation of the payer, which though is toward the tax liability of the payee, it is to, in such a case, apply to the AO in the prescribed form, either directly (u/s. 197, as has been in the instant case) or u/s. 195(2) (in cases of direct remittance to a non-resident), for deduction at nil or at a lower rate of tax, furnishing the requisite details (refer rules 28AA, 28AB & 29B of the Income Tax Rules, 1962). Tax deduction is accordingly to be made as per the tax deduction certificate. The shortfall in the deduction of tax at source, for which the assessee- payer may be deemed to be default u/s. 201(1), and a tax demand raised on him thereby, is only with reference to the tax deduction as per such certificate issued by the AO, which is to be for the entire year. Where, then, one may ask, is the scope for the argument being advanced, with the independent operation of s. 201(1) and s. 201(1A) having been clarified by the Apex Court Eli Lilly & Co. (supra) and Hindustan Coca Cola Beverage (supra), the relevant parts of which stand reproduced in the earlier part of this order? That the tax so deducted, being deductible, may be in excess or short of the actual tax liability of the payee, a matter subsequent, which would be upon it filing the tax return and its assessment, and outside the purview of the tax deduction provisions and, therefore, of no concern to the payer-deductor. The same would result in accordingly a refund or a demand on the payee. It is this subsequent refund which is being made the basis for claiming non-liability to tax deduction at source by the assessee-payer in the instant case, and wherein lies its principal fallacy. The subsequent refund, which is to the payee, is of no consequence. In fact, even a refund to the assessee, as cautioned by the Apex Court in Central India Industries Ltd. (supra), cannot lead to the inference of no tax liability, which ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 33 can only follow the process of assessment. The provisions of Chapter-XVII stand also examined to find them in complete harmony with the liability to tax deduction being vicarious (s.191), though cannot be demanded as a part of advance-tax (s. 205). The tax deduction at source is a statutory obligation, mandatory in character. As further explained in Palam Gas Service v. CIT [2017] 394 ITR 300 (SC), once the section mandates a person to deduct tax at source not only on the sum payable, but also when the sum is actually paid to the contractor, any person who does not adhere to the statutory obligation has to suffer the consequences which is stipulated in the Act itself. In Asst. CIT vs. A.R. Enterprises [2013] 350 ITR 489 (SC), the Hon'ble Apex Court explained that both, the tax deduction at source and advance-tax, are to be computed with reference to estimated income for the current year. The same cannot therefore by itself be taken as a disclosure of income or indicative thereof, which is only upon filing the return of income, as stipulated in the Act, which every person is obligated to, returning ̳total income‘, including, thus, all income accrued and received, as well as that deemed to be so. Reference for the purpose was made by it to the provisions of Chapter-XVII of the Act. While the liability to deduct tax at source, inasmuch as it could also be paid direct by the payee, is a vicarious liability, that to interest for the shortfall therein is not. That the same stands also deducted, albeit illegally, by the assessee- company, which in fact had led to the petitions before the Hon‘ble High Court, is another matter with which we are not concerned. This vicarious liability is with reference to the tax deductible, i.e., as per the provisions of the Act. Chapter-XVII- B contains the provisions for deduction at nil/lower deduction at source. Without this mechanism in place, involving the Revenue authorities, it would be reduce the statutory liability of tax deduction to a private affair between the deductor (payer) and deductee (payee), i.e., as to what ought to be deducted. This emphasizes, at once, the fairness and completeness of the procedure as well as the need to observe it. Further, inasmuch as the law is fair, i.e., as between the payer and payee, casting specific obligations on them, not observing them shall result in a ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 34 serious prejudice to the Revenue. As noted by the Hon'ble Apex Court in Calcutta Knitwears (supra), reproducing the observations by Lord Granworth in Grundy v. Pinniger [1852] 1 LJ Ch 405, as: (pg. 685) "To adhere as closely as possible to the literal meaning of the words used, is a cardinal rule from which if we depart we launch into a sea of difficulties which it is not easy to fathom." In fact, the Board vide its Instruction No.8 of 2006, dated 31/10/2006 (reported at [2006] CTR (St.) 1, with a view to ensure that the law is observed, both in its letter and spirit, and inasmuch as the issue of low deduction certificates seriously jeopardises and adversely affects collection of tax, directed the Assessing Officers (field officers) to ensure that the provisions of r.28AA and r. 28AB are strictly adhered to. Section 234B provides for payment of interest on the shortfall in payment of advance-tax with reference to ̳assessed tax‘ from the first day of the assessment year to the date of payment of tax. ̳Assessed tax‘ is defined to mean the tax as assessed less, inter alia, tax deducted/collected at source. The Revenue worked the liability to interest u/s. 234B in Mitsubishi Corporation (supra) accordingly. The Apex Court, in appeal by the assessee, reading the provisions of Chapter-XVII holistically, held that inasmuch as the word used sec. 209(1)(d) is ̳tax which would be deductible‘, the obligation to advance-tax and, thus, to interest on shortfall therein, is to be with reference to the tax deductible, i.e., as liable to be deducted, even where not deducted and deposited. It is easy to see that it is only where the interest obligation u/s. 201(1A) is worked w.r.t. tax deductible, as the section clearly provides, that would only ensure the Revenue being compensated, as otherwise interest would not arise from either the deductor or the deductee. Similarly, interest u/s. 244A, which is to accompany the grant of a refund by the Revenue, in-so-far as it relates to tax deducted at source, runs again from the first day of the assessment year. Where, as in the instant case, the tax is deducted and deposited subsequent thereto (i.e., the first day of the assessment year), it is only the charge of interest u/s. 201(1A) for ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 35 the period of shortfall defined therein, that would compensate the Revenue. That is, there is a parity qua interest as between the taxpayers/deductors and the Revenue, which shall stand to be disturbed if the interest u/s. 201(1A), departing from as provided therein and as also clarified by the Apex Court in Eli Lilly & Co. (supra), is not worked out with reference to the tax deductible. It may be argued that payee‘s income being at a loss, the entire tax deduction has been made in excess, so that the foregoing may not apply. This is plainly incorrect as the payee stands to be granted refund of tax u/s. 237 along with interest u/s. 244A. That is, not charging interest u/s. 201(1A) would lead to double jeopardy for the Revenue. In other words, the compensatory character of s. 201(1A) fails where the requirement for tax deduction u/s. 201(1) is not read to mean the tax liable to be deducted under the Act, even as explained in Eli Lilly & Co. (supra) and Mitsubishi Corporation (supra). That apart, we have shown that the provisions are fair, providing for nil/lower deduction of tax at source, which is to be construed as the tax deductible, by definition, and there is no room for consideration of equity (Central India Industries Ltd. (supra)), even as no inequity has been shown. The hardship or inconvenience cannot, as explained in Calcutta Knitwears (supra), alter the meaning of the language employed by the Legislature if such meaning is clear and apparent. No hardship or inconvenience though is contended; the assessee‘s case, and throughout, is principally with reference to the interpretation of the relevant provisions, i.e., of it‘s obligation to deduct tax at source, claimed to be at nil in view of the loss (or nil income) sustained by the payee-company. The Hon'ble jurisdictional High Court in W.P. 19315/2017, dated 11/02/2020, has directed the Revenue to refund the interest collected u/s. 201(1A) from the assessee on behalf of the petitioner (IJM Ltd.), along with interest u/s. 244A, who shall in turn pay the same to the petitioner (para 17 of it‘s order). In doing so, the Hon'ble jurisdictional High Court has not annulled the instant appeals/proceedings. It has also not quashed the orders by the Tribunal in the assessee‘s appeals in the first instance, i.e., dated 20/09/2013 and 29/05/2015, nor ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 36 the consequent orders dated 21/12/2016 and 28/02/2017 in the second round by the assessing authority and the first appellate authority respectively. These orders are thus valid, as well as the appeals against them before the Tribunal, which are pending adjudication since 15/12/2017. This position was also clarified by Shri Shrivastava, appearing on behalf of the assessee (Respondent 3), before the Hon'ble Court, which noted as under:- ―9. Reply has also been filed on behalf of the respondent No.3. Learned counsel submitted that the respondent No.3 is not directly concerned with the demand made by the petitioner. It has deposited the TDS and interest as per the demand of the Income Tax Department. Further, its appeal for refund of interest is also pending.‖ It is unfortunate that despite the matter being pending with the Hon'ble Court over 10 years; it deciding the same in the first instance on 27/04/2012 (in W.P. No. 15866/2011 & W.P. No. 19444/2012), the matter was not taken up in earnest. No application for early hearing was moved with the Tribunal by either party and, on the contrary, the assessee sought adjournment as and when the matter came up for hearing, and the Tribunal kept in the dark about the petitions having been filed and in fact writs issued by the Hon'ble Court, which would have led it to dispose the matter much earlier. Even hearing of these appeals was on account of the Bench declining the assessee‘s requests for adjournment. As informed, refunds have not been allowed by the Revenue. Be that as it may, this Tribunal is duty bound to decide the appeals before it as per law, answering the issue/s arising as discerned. For the purpose, due regard and deference is to be, and shall be, made to the pronouncements by the Hon'ble jurisdictional High Court. A mere look at the assessee‘s Grounds show that the assessee‘s grievance is the non-grant of refund of the entire interest levied and collected u/s. 201(1A). We have already clarified that the same, being consequential, would only follow adjudication of an order u/s. 201(1)/201(1A) per se, even as explained by the Apex Court in Central India Industries Ltd. (supra). This being the second round, the matter, it is found to have been set aside with ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 37 directions by the Tribunal, relying on the decisions in Hindustan Coca Cola Beverage (supra) and Eli Lilly & Co. (supra), which orders have thus attained finality, law on which is well-settled, and for which reference be made to decisions in CIT v. Mtt. Ar. S. Ar. Arunachalam Chettiar [1953] 23 ITR 180 (SC); Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226 (SC); CIT vs. D & H Secheron Electrodes Ltd. [2008] 301 ITR 20 (MP). The issue, on account of the dispute raised by the assessee, discerned as arising in the instant appeals is the scope of the obligation to deduct tax at source u/s. 201(1), for the non-discharge of which compensatory interest is levied u/s. 201(1A). The same is found to admit no two views in view of the express language of the provision and, rather, having received clear interpretation to mean that as required to be deducted under the provisions of the Act, the same interpretation it placed on the word ̳deductible‘ in s. 209(1)(d) per its subsequent decision in Mitsubishi Corporation (supra). As explained in Eily Lilly & Co. (supra), the words ̳on the amount of such tax‘ in s. 201(1A) clearly refer to the tax deductible u/s. 201(1), i.e., as required to be deducted under the provisions of the Act, and for which it is therefore deemed to be in default. The same cannot, as is being sought to be advocated, reckoned with reference to tax liability of the payee as finally assessed. Even the amended provision of s. 201(1), i.e., w.e.f. 01/07/2012, afore-referred (para 9), does not speak of the said assessment. Rather, the subsequent relaxation in law, effective 01/07/2012, itself endorses the view taken in the matter, i.e., in terms of the principle of interpretation of statutes w.r.t. subsequent amendment, explained in Mitsubishi Corporation (supra) with reference to judicial precedents. Further, this relaxation is without prejudice to s. 201(1A), liability under which survives. The law, traversing the different provisions of the Act as indeed of Chapter-XVII, is found as well-settled, with no ambivalence. Not so doing shall, besides being contrary to law, also fail the compensatory character of the interest provisions as well as the balance between the tax payers/deductors and the Revenue. The decisions in A.R. Enterprises (supra) and Palam Gas Service (supra) have also ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 38 been found as clarifying different aspects of the matter. We are, accordingly, nay, duty bound to follow the same in-so-far as and to the extent it is consistent with the law as laid down by the Apex Court. 15.2 The matter, in the final analysis, reduces to one of quantum. No arguments qua the same were made before us. As it appears from the ̳Statement of Facts‘ accompanying the Grounds of Appeal (which though are required to be filed before the first appellate authority), as indeed the narration of facts by the Hon'ble High Court in W.P.No. 19315/2017, the tax deduction at source has been made in sums far in excess of that workable with reference to the tax deduction certificates obtained by the payee (IJM Ltd.) from it‘s AO u/s. 197. This is, perhaps, as the assessee had been deemed to be in default u/s. 201(1) for such larger sums. We have already abundantly clarified that the tax deductible is only with reference to the tax liable to be deducted under the provisions of the Act and, therefore, any deduction in excess of the rate/s specified in the tax deduction certificate/s, which is separate for each year, cannot be regarded as tax liable to be deducted u/c. XVII- B. The date of issue of the certificate, as long as it falls within the relevant year or prior thereto, is immaterial. Any tax collected u/s. 201(1) in excess of this sum is not liable for compensatory interest u/s. 201(1A). Interest in excess of that computed thus is liable for refund along with interest u/s. 244A, even as held by the Hon'ble jurisdictional High Court in W.P.No. 19315/2017. The AO shall, for each of the years under reference, modify the order u/s. 201(1) & 201(1A) accordingly, and toward which the assessee shall provide him the necessary details with dispatch, which the AO shall verify/cause to verify from his records. The AO shall also share the computation of the refund of interest u/s. 201(1A), and interest u/s. 244A thereon, with a view to avoid subsequent application/s u/s. 154 in the matter. Any unresolved difference, if any, shall be spelt out by the AO per a speaking order. The AO shall, considering the time lapsed, shall complete the process latest by 31/10/2022. We decide accordingly. ITA Nos. 69-71/JAB/2017 (AYs. 2008-09, 2009-10 & 2011-12) Project Director NHAI v. ITO (IT & TP) 39 16. In the result, the assessee‘s appeals are allowed on the aforesaid terms. Order pronounced in open Court on June 27, 2022 Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 27/06/2022 vr/- Copy to: 1. The Appellant: Project Director National Highway Authority of India (NHAI), Project Implementation Unit, Sagar (MP). 2. The Respondent: ITO (International Taxation and Transfer Pricing), Bhopal. 3. The Principal CI T (IT & TP ), Ah me dabad 4. The CI T( Appeals)-13, Ah medabad. 5. The Sr . D.R., I TAT, Jabalpur. 6. Guard File. By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.
Other Referred Cases
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Laws Referred To
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1:1 Consultation on Tax Litigation
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