| Case ID |
2cb453ad-fc87-4cf9-8d27-687921de38a0 |
| Body |
View case body. Login to View |
| Case Number |
IT REFERENCE No. 67 OF 1997 |
| Decision Date |
Nov 10, 1999 |
| Hearing Date |
|
| Decision |
The Kerala High Court ruled that the levy of interest under section 201(1A) of the Income Tax Act, 1961 was justified. The court clarified that the interest serves as a compensatory measure for the tax that should have been deducted and deposited. The court emphasized that the use of the word 'shall' in the statute indicates a mandatory requirement. The Tribunal's decision to delete the interest was overturned, affirming that the ultimate liability for tax does not negate the requirement for compliance with the provisions of the Act. |
| Summary |
This case revolves around the interpretation of the Income Tax Act, 1961, specifically sections related to the deduction of tax at source. The Kerala High Court addressed the case where the assessee, a partnership firm, failed to deduct tax on interest paid to another firm. Despite the recipient firm having paid taxes on the interest, the court held that the failure to deduct tax by the assessee warranted the levy of interest under section 201(1A). The judgment clarifies the mandatory nature of tax compliance and the implications of non-compliance, reinforcing the principle that the levy of interest is compensatory rather than punitive. This case is significant for tax practitioners and entities dealing with compliance under the Income Tax Act, providing clarity on the obligations of taxpayers and the consequences of failing to meet those obligations. Keywords such as 'Income Tax compliance', 'tax deductions', and 'mandatory provisions in tax law' are trending and relevant in this context. |
| Court |
Kerala High Court
|
| Entities Involved |
Not available
|
| Judges |
ARIJIT PASAYAT, C.J.,
K.S. RADHAKRISHNAN, J
|
| Lawyers |
Not available
|
| Petitioners |
Commissioner of INCOME TAX
|
| Respondents |
Dhanalakshmy Weaving Works
|
| Citations |
2002 SLD 2439,
(2002) 85 TAX 281,
(2000) 245 ITR 13
|
| Other Citations |
CIT v. Kannan Devan Hill Produce Co. Ltd. [1986] 161 ITR 477/[1987] 30 Taxman 460 (Ker.),
Sainik Motors v. State of Rajasthan AIR 1961 SC 1480,
Lachmi Narain v. Union of India AIR 1976 SC 714,
Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC),
CST v. Qureshi Crucible Centre [1993] 89 STC 467 (SC),
Prahlad Rai v. STO [1992] 84 STC 375 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
256(1),
201(1A),
201,
194A,
192,
221
|