QUILON SEA FOODS Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) PETITIONER is a partnership firm and is an income-tax assessee. They have filed this original petition challenging Ext. P6 certificate issued under S. 222 or 223 of the IT Act, 1961, notice of demand. As per this notice a sum of Rs. 85,761 is certified to be recovered from the petitioner.

(2.) THE main contention of the learned counsel for the petitioner is that interest under S. 194A shall not be leviable and that there is no liability on the part of the petitioner to deduct and pay. I am not inclined to allow the learned counsel to go into the question of liability to pay interest at this stage, Exts. P2, P3 and P4 are proceedings of the ITO finding that the petitioner has committed default since they have failed to deduct tax due and that they must pay the interest as per the demand notice which has become final consequent on the dismissal of the order or revision by the CIT by Ext. P5, dt. 21st Nov., 1990. Therefore, it is not permissible for the petitioner to reopen the issue on the question of liability either of the petitioner or of the payee. The only further contention that remains is whether the order of the Tribunal dt. 16th Aug., 1993, holding that 1/3rd of interest payment is liable for disallowance on estimate basis, which, according to the petitioner, has not been given credit, will have any bearing on the proceedings Ext. P3, dt. 21st Nov., 1990. The demand is in reference to failure to deduct the interest and pay tax under S. 194A. Sec. 194A obliges a person to deduct income-tax at the time of crediting of such income to the account. Petitioner instead of crediting the interest payable claimed it as expenditure which was ultimately allowed to the extent of 1/3rd of the interest payment. This claim of expenditure on the part of the petitioner in his assessment has no relevance to the liability to deduct income-tax.